Document:

CYCLACEL
PHARMACEUTICALS, INC.

WARRANT TO PURCHASE COMMON
STOCK

To Purchase [                ]
Shares of Common Stock

Date of Issuance:
February  16,  2007

VOID AFTER FEBRUARY 16,
2014

THIS CERTIFIES THAT, for value received,
[                    ], or permitted
registered assigns (the
‘‘HOLDER’’), is entitled to
subscribe for and purchase at the Exercise Price (defined below) from
Cyclacel Pharmaceuticals, Inc., a Delaware corporation (the
‘‘COMPANY’’) up to
[            ] shares of the common stock of the
Company, par value $0.001 per share (the ‘‘COMMON
STOCK’’). This warrant is one of a series of
warrants issued by the Company as of the date hereof (individually a
‘‘WARRANT’’; collectively,
‘‘COMPANY WARRANTS’’)
pursuant to that certain subscription agreement between the Company and
the Holder, dated as of February  12,  2007 (the
‘‘SUBSCRIPTION
AGREEMENT’’).

1.    DEFINITIONS.    Capitalized terms used herein
but not otherwise defined herein shall have their respective meanings
as set forth in the Subscription Agreement. As used herein, the
following terms shall have the following respective
meanings:

(A)    ‘‘Exercise
Period’’ shall mean the period commencing with
the date hereof and ending seven years from the date hereof, unless
sooner terminated as provided
below.

(B)    ‘‘Exercise
Price’’ shall mean $8.44 per share, subject to
adjustment pursuant to Section 4
below.

(C)    ‘‘Exercise
Shares’’ shall mean the shares of Common Stock
issuable upon exercise of this
Warrant.

(D)    ‘‘Trading
Day’’ shall mean (a) any day on which the Common
Stock is listed or quoted and traded on its primary Trading Market, (b)
if the Common Stock is not then listed or quoted and traded on any
eligible market (meaning any of the NYSE, AMEX or NASDAQ), then a day
on which trading occurs on the OTC Bulletin Board (or any successor
thereto), or (c) if trading does not occur on the OTC Bulletin Board
(or any successor thereto), any Business
Day.

2.    EXERCISE OF WARRANT.    The rights
represented by this Warrant may be exercised in whole or in part at any
time during the Exercise Period, by delivery of the following to the
Company at its address set forth on the signature page hereto (or at
such other address as it may designate by notice in writing to the
Holder):

(A)    An executed Notice of
Exercise in the form attached
hereto;

(B)    Payment of the Exercise Price
either (i) in cash or by check, (ii) by cancellation of indebtedness,
or (iii) pursuant to Section 2.1 below;
and

(C)    This Warrant.

Execution and
delivery of the Notice of Exercise shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Exercise
Shares, if any.

Certificates for shares purchased hereunder shall
be transmitted by the transfer agent of the Company to the Holder by
crediting the account of the Holder’s prime broker with the
Depository Trust Company through its Deposit Withdrawal Agent
Commission system if the Company is a participant in such system, and
otherwise by physical delivery to the address specified by the Holder
in the Notice of Exercise within three business days from the delivery
to the Company of the Notice 

of Exercise, surrender of this Warrant and
payment of the aggregate Exercise Price as set forth above. This
Warrant shall be deemed to have been exercised on the date the Exercise
Price is received by the Company. The Exercise Shares shall be deemed
to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date this Warrant has been exercised
by payment to the Company of the Exercise Price.

The person in
whose name any certificate or certificates for Exercise Shares are to
be issued upon exercise of this Warrant shall be deemed to have become
the holder of record of such shares on the date on which this Warrant
was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or
certificates, except that, if the date of such surrender and payment is
a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares at the
close of business on the next succeeding date on which the stock
transfer books are open.

To the extent permitted by law, the
Company’s obligations to issue and deliver Exercise Shares in
accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any person or entity or any action to
enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any
other person or entity of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other person
or entity, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to the Holder in
connection with the issuance of Exercise Shares. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to
the Company’s failure to timely deliver certificates
representing shares of Common Stock upon exercise of this Warrant as
required pursuant to the terms
hereof.

2.1    NET EXERCISE.    If
during the Exercise Period, the Holder is not permitted to sell
Exercise Shares pursuant to the Registration Statement, as defined in
the Subscription Agreement, and the fair market value of one share of
the Common Stock is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant by
payment of cash or by check, or by cancellation of indebtedness, the
Holder may elect to receive shares equal to the value (as determined
below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise in which event
the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:

X = Y
(A−B)

    A

			
		Where X
= 	the number of shares of Common Stock to be issued
to the Holder

			
		             Y
= 	the number of shares of Common Stock purchasable
under this Warrant or, if only a portion of this Warrant is being
exercised, the portion of this Warrant being canceled (at the date of
such calculation)

			
		             A
= 	the fair market value of one share of the
Company’s Common Stock (at the date of such
calculation)

			
		             B
= 	Exercise Price (as adjusted to the date of such
calculation)

For purposes of the above
calculation, the ‘‘fair market value’’ of
one share of Common Stock shall mean (i) the average of the closing
sales prices for the shares of Common Stock on the Nasdaq National
Market or other trading market where such security is listed or traded
as reported by Bloomberg Financial Markets (or a comparable reporting
service of national reputation selected by the Company and reasonably
acceptable to the Holder if Bloomberg Financial Markets is not then
reporting sales prices of such security) (collectively,
‘‘Bloomberg’’) 

2

for the ten (10) consecutive trading days
immediately preceding such date, or (ii) if the Nasdaq National Market
is not the principal trading market for the shares of Common Stock, the
average of the reported sales prices reported by Bloomberg on the
principal trading market for the Common Stock during the same period,
or, if there is no sales price for such period, the last sales price
reported by Bloomberg for such period, or (iii) if neither of the
foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for such
security as reported by Bloomberg, or if no sales price is so reported
for such security, the last bid price of such security as reported by
Bloomberg or (iv) if fair market value cannot be calculated as of such
date on any of the foregoing bases, the fair market value shall be as
determined by the Board of Directors of the Company in the exercise of
its good faith judgment.

2.2    ISSUANCE
OF NEW WARRANTS.    Upon any partial exercise of this Warrant,
the Company, at its expense, will forthwith and, in any event within
five business days, issue and deliver to the Holder a new warrant or
warrants of like tenor, registered in the name of the Holder,
exercisable, in the aggregate, for the balance of the number of shares
of Common Stock remaining available for purchase under this
Warrant.

2.3    PAYMENT OF TAXES AND
EXPENSES.    The Company shall pay any recording, filing, stamp
or similar tax which may be payable in respect of any transfer involved
in the issuance of, and the preparation and delivery of certificates
(if applicable) representing, (i) any Exercise Shares purchased upon
exercise of this Warrant and/or (ii) new or replacement warrants in the
Holder’s name or the name of any transferee of all or any
portion of this Warrant.

2.4    EXERCISE
LIMITATIONS; HOLDER’S RESTRICTIONS.    A Holder shall not
have the right to exercise any portion of this Warrant, pursuant to
Section 2 or otherwise, to the extent that after giving effect
to such issuance after exercise, such Holder (together with such
Holder’s affiliates), as set forth on the applicable Notice of
Exercise, would beneficially own in excess of 4.99%, or
9.9% if such holder already beneficially owns 4.99% or
exceeds 4.99% in the future, of the number of shares of the
Common Stock outstanding immediately after giving effect to such
issuance. For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by such Holder and its affiliates
shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of
such sentence is being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by
such Holder or any of its affiliates and (B) exercise or conversion of
the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other shares of Common
Stock or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such
Holder or any of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2.4, beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act, it being acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and such Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2.4
applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by such Holder) and of which a
portion of this Warrant is exercisable shall be in the sole discretion
of a Holder, and the submission of a Notice of Exercise shall be deemed
to be each Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder) and
of which portion of this Warrant is exercisable, in each case subject
to such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. For
purposes of this Section 2.4, in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may
be, (y) a more recent public announcement by the Company or (z) any
other notice by the Company or the Company’s Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon
the written or oral request of a Holder, the Company shall within two
Trading Days confirm orally 

3

and in writing to such Holder the number of
shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by such Holder or its affiliates since the date
as of which such number of outstanding shares of Common Stock was
reported. The provisions of this Section 2.4 may be waived by
such Holder, at the election of such Holder, upon not less than 61
days’ prior notice to the Company, and the provisions of this
Section 2.4 shall continue to apply until such 61st day (or
such later date, as determined by such Holder, as may be specified in
such notice of waiver).

3.    COVENANTS OF THE
COMPANY.

3.1    COVENANTS AS TO
EXERCISE SHARES.    The Company covenants and agrees that all
Exercise Shares that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly issued and
outstanding, fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issuance thereof. The Company
further covenants and agrees that the Company will at all times during
the Exercise Period, have authorized and reserved, free from preemptive
rights, a sufficient number of shares of Common Stock to provide for
the exercise of the rights represented by this Warrant. If at any time
during the Exercise Period the number of authorized but unissued shares
of Common Stock shall not be sufficient to permit exercise of this
Warrant, the Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes.

3.2    NO
IMPAIRMENT.    Except and to the extent as waived or consented
to by the holder of Company Warrants representing at least two-thirds
of the number of shares of Common Stock then subject to outstanding
Company Warrants, the Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder
by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of
all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against
impairment.

3.3    NOTICES OF RECORD DATE
AND CERTAIN OTHER EVENTS.    In the event of any taking by the
Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive
any dividend (other than a cash dividend which is the same as cash
dividends paid in previous quarters or to be paid to the holders of the
Company’s 6% convertible exchangeable preferred stock) or
other distribution, the Company shall mail to the Holder, at least ten
(10) days prior to the date on which any such record is to be taken for
the purpose of such dividend or distribution, a notice specifying such
date. In the event of any voluntary dissolution, liquidation or winding
up of the Company, the Company shall mail to the Holder, at least ten
(10) days prior to the date of the occurrence of any such event, a
notice specifying such date. In the event the Company authorizes or
approves, enters into any agreement contemplating, or solicits
stockholder approval for any Fundamental Transaction, as defined in
Section 6 herein, the Company shall mail to the Holder, at
least ten (10) days prior to the date of the occurrence of such event,
a notice specifying such date.

4.       ADJUSTMENT OF
EXERCISE PRICE AND SHARES.

(A)    In the
event of changes in the outstanding Common Stock of the Company by
reason of stock dividends, split-ups, recapitalizations,
reclassifications, combinations or exchanges of shares, separations,
reorganizations, liquidations, consolidation, acquisition of the
Company (whether through merger or acquisition of substantially all the
assets or stock of the Company), or the like, the number, class and
type of shares available under this Warrant in the aggregate and the
Exercise Price shall be correspondingly adjusted to give the Holder of
this Warrant, on exercise for the same aggregate Exercise Price, the
total number, class, and type of shares or other property as the Holder
would have owned had this Warrant been exercised prior to the

4

event and had the Holder continued to hold
such shares until the event requiring adjustment. The form of this
Warrant need not be changed because of any adjustment in the number of
Exercise Shares subject to this
Warrant.

(B)    If at any time or from time
to time the holders of Common Stock of the Company (or any shares of
stock or other securities at the time receivable upon the exercise of
this Warrant) shall have received or become entitled to receive,
without payment therefor,

(I)    Common Stock
or any shares of stock or other securities which are at any time
directly or indirectly convertible into or exchangeable for Common
Stock, or any rights or options to subscribe for, purchase or otherwise
acquire any of the foregoing by way of dividend or other distribution
(other than a dividend or distribution covered in Section 4(a)
above);

(II)    any cash paid or payable
otherwise than as a cash dividend;
or

(III)    Common Stock or additional stock
or other securities or property (including cash) by way of spinoff,
split-up, reclassification, combination of shares or similar corporate
rearrangement (other than shares of Common Stock pursuant to
Section 4(a) above), then and in each such case, the Holder
hereof will, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (ii) and (iii)
above) which such Holder would hold on the date of such exercise had
such Holder been the holder of record of such Common Stock as of the
date on which holders of Common Stock received or became entitled to
receive such shares or all other additional stock and other securities
and property.

(C)    Upon the occurrence of
each adjustment pursuant to this Section 4, the Company at its
expense will, at the written request of the Holder, promptly compute
such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of
Exercise Shares or other securities issuable upon exercise of this
Warrant (as applicable), describing the transactions giving rise to
such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly
deliver a copy of each such certificate to the Holder and to the
Company’s transfer agent.

5.    FRACTIONAL
SHARES.    No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant
hereto. All Exercise Shares (including fractions) issuable upon
exercise of this Warrant may be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional
share. If, after aggregation, the exercise would result in the issuance
of a fractional share, the Company shall, in lieu of issuance of any
fractional share, pay the Holder otherwise entitled to such fraction a
sum in cash equal to the product resulting from multiplying the then
current fair market value of an Exercise Share by such
fraction.

6.    FUNDAMENTAL TRANSACTIONS.    If,
at any time while this Warrant is outstanding, (i) the
Company effects any merger of the Company with or into another entity,
(ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender
offer or exchange offer (whether by the Company or another individual
or entity) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash
or property or (iv) the Company effects any reclassification of the
Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision
or combination of shares of Common Stock covered by Section 4
above) (in any such case, a ‘‘FUNDAMENTAL
TRANSACTION’’), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive,
for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction,
upon exercise of 

5

this Warrant (disregarding any limitation on
exercise contained herein solely for the purpose of such
determination), the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the
‘‘ALTERNATE CONSIDERATION’’)
receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a
Holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such event (disregarding any
limitation on exercise contained herein solely for the purpose of such
determination). For purposes of any such exercise, the determination of
the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the
Holder a new warrant consistent with the foregoing provisions and
evidencing the Holder’s right to exercise such warrant into
Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of
this Section 6 and ensuring that this Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental
Transaction.

7.    NO STOCKHOLDER RIGHTS.    Other
than as provided in Section 3.3 or otherwise herein, this
Warrant in and of itself shall not entitle the Holder to any voting
rights or other rights as a stockholder of the
Company.

8.    TRANSFER OF WARRANT.    Subject to
applicable laws and the restriction on transfer set forth in the
Subscription Agreement, this Warrant and all rights hereunder are
transferable, by the Holder in person or by duly authorized attorney,
upon delivery of this Warrant and the form of assignment attached
hereto to any transferee designated by Holder. The transferee shall
sign an investment letter in form and substance reasonably satisfactory
to the Company and its counsel.

9.    LOST, STOLEN,
MUTILATED OR DESTROYED WARRANT.    If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a
new Warrant of like denomination and tenor as this Warrant so lost,
stolen, mutilated or destroyed. Any such new Warrant shall constitute
an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be at any
time enforceable by anyone.

10.    NOTICES,
ETC.    All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, (c) five days after having been
sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the
Company at the address listed on the signature page hereto and to
Holder at the applicable address set forth on the applicable signature
page to the Subscription Agreement or at such other address as the
Company or Holder may designate by ten (10) days advance written notice
to the other parties
hereto.

11.    ACCEPTANCE.    Receipt of this
Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained
herein.

12.    GOVERNING LAW.    This Warrant and
all rights, obligations and liabilities hereunder shall be governed by
the laws of the State of Delaware.

6

13.    AMENDMENT OR
WAIVER.    Any term of this Warrant may be amended or waived
(either generally or in a particular instance and either retroactively
or prospectively) with the written consent of the Company and the
holders of Company Warrants representing at least two-thirds of the
number of shares of Common Stock then subject to outstanding Company
Warrants. Notwithstanding the foregoing, (a) this Warrant may be
amended and the observance of any term hereunder may be waived without
the written consent of the Holder only in a manner which applies to all
Company Warrants in the same fashion and (b) the number of Warrant
Shares subject to this Warrant and the Exercise Price of this Warrant
may not be amended, and the right to exercise this Warrant may not be
waived, without the written consent of the Holder. The Company shall
give prompt written notice to the Holder of any amendment hereof or
waiver hereunder that was effected without the Holder’s written
consent. No waivers of any term, condition or provision of this
Warrant, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term,
condition or provision.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

7

IN WITNESS WHEREOF, the Company has caused
this Warrant to be executed by its duly authorized officer as of
February  16,  2007.

							
	 			CYCLACEL
PHARMACEUTICALS,
INC.
	 			 			 
	 			By:			                                                                                
	 			 			Name:
Spiro Rombotis
Title: President & Chief
Executive Officer
	

		200 Connell
Drive
Berkeley Heights, NJ 07922

8

NOTICE OF
EXERCISE

TO:    CYCLACEL PHARMACEUTICALS,
INC.

(1)    [    ]    The undersigned hereby
elects to purchase [                ] shares
of the common stock, par value $0.001 (the
‘‘Common Stock’’), of
CYCLACEL PHARMACEUTICALS, INC. (the
‘‘Company’’) pursuant to the
terms of the attached Warrant, and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if
any.

         [    ]    The
undersigned hereby elects to purchase
[                ] shares of Common Stock of
the Company pursuant to the terms of the net exercise provisions set
forth in Section 2.1 of the attached Warrant, and shall tender
payment of all applicable transfer taxes, if
any.

(2)    Please issue the certificate for shares of Common
Stock in the name of, and pay any cash for any fractional share
to:

	
				
	

Print or
type
name

	
				
	

Social
Security or other Identifying
Number

	
				
	

Street
Address

	
				
	

City
State Zip Code

(3)    If such number of shares shall not be
all the shares purchasable upon the exercise of the Warrants evidenced
by this Warrant, a new warrant certificate for the balance of such
Warrants remaining unexercised shall be registered in the name of and
delivered to:

Please insert social security or other identifying
number:
                                                                        

	
		
	

(Please
print name and
address)

	
		
	

Dated:

				
	(Date)			                                                                                        
	 			(Signature)
	 			 
	 			                                                                                        
	 			(Print
name)
	

9

ASSIGNMENT FORM

(To assign the
foregoing Warrant, execute this form and supply required information.
Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the
foregoing Warrant and all rights evidenced thereby are hereby assigned
to

				
	Name:			                                                                                        
	 			(Please
Print)
	 			 
	Address:			                                                                                        
	 			(Please
Print)
	Dated:         ,
200[    ]			 
	

													
	Holder’s
Signature:					      	

					                    	

	Holder’s
Address:					 	

					 	

	

NOTE:
The signature to this Assignment Form must correspond with the name as
it appears on the face of the Warrant, without alteration or
enlargement or any change whatever. Officers of corporations and those
acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing
Warrant.

104,249,668
Units

 CYCLACEL PHARMACEUTICALS,
INC.  

PLACEMENT AGENT
AGREEMENT

February  12,
2007

Lazard Capital Markets LLC
Needham & Company,
LLC
ThinkEquity Partners LLC
    c/o Lazard Capital Markets
LLC
30 Rockefeller Plaza
New York, New York
10020

Dear
Sirs:

1.    INTRODUCTION.    Cyclacel
Pharmaceuticals, Inc., a Delaware corporation (the
‘‘Company’’), proposes to
issue and sell to the purchasers, pursuant to the terms of this
Placement Agent Agreement (this
‘‘Agreement’’) and the
Subscription Agreements in the form of Exhibit A attached
hereto (the ‘‘Subscription
Agreements’’) entered into with the purchasers
identified therein (each a
‘‘Purchaser’’ and
collectively, the
‘‘Purchasers’’), up to an
aggregate of 4,249,668 units (the
‘‘Units’’) with each Unit
consisting of (i) one share of common stock, $0.001 par value per share
(the ‘‘Common Stock’’) of
the Company and (ii) one warrant to purchase 0.25 shares of Common
Stock (the ‘‘Warrants’’).
The terms and conditions of the Warrants are set forth in the form of
Exhibit B attached hereto. The Company hereby confirms its
agreement with Lazard Capital Markets LLC
(‘‘LCM’’), Needham &
Company, LLC (‘‘Needham’’)
and ThinkEquity Partners LLC
(‘‘ThinkEquity,’’ and
together with LCM and Needham, the ‘‘Placement
Agents’’) to act as Placement Agents in
accordance with the terms and conditions hereof. LCM is acting as the
representative of the Placement Agents, and in such capacity is
hereinafter referred to as the
‘‘Representative.’’

2.    AGREEMENT
TO ACT AS PLACEMENT AGENTS; PLACEMENT OF
SECURITIES.    On the basis of the representations,
warranties and agreements of the Company herein contained, and subject
to all the terms and conditions of this
Agreement:

2.1    The Company hereby
authorizes the Placement Agents to act as its exclusive agents to
solicit offers for the purchase of all or part of the Units from the
Company in connection with the proposed offering of the Units (the
‘‘Offering’’). Until the
Closing Date (as defined in Section 4 hereof) or
earlier upon termination of this Agreement pursuant to Section
9, the Company shall not, without the prior written consent of the
Representative, solicit or accept offers to purchase Units otherwise
than through the Placement Agents. LCM may utilize the expertise of
Lazard Frères & Co. LLC in connection with LCM’s
placement agent activities.

2.2    The
Placement Agents agree, as agents of the Company, to use their best
efforts to solicit offers to purchase the Units from the Company on the
terms and subject to the conditions set forth in the Prospectus (as
defined below). The Placement Agents shall use commercially reasonable
efforts to assist the Company in obtaining performance by each
Purchaser whose offer to purchase Units has been solicited by the
Placement Agents and accepted by the Company, but the Placement Agents
shall not, except as otherwise provided in this Agreement, be obligated
to disclose the identity of any potential purchaser or have any
liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement
Agents be obligated to underwrite or purchase any Units for their own
accounts and, in soliciting purchases of Units, the Placement Agents
shall act solely as the Company’s agents and not as principals.
Notwithstanding the foregoing and except as otherwise provided in
Section 2.3, it is understood and agreed that the
Placement Agents (or their affiliates) may, solely at their discretion
and without any obligation to do so, purchase Units as
principals.

2.3    Subject to the provisions
of this Section 2, offers for the purchase of Units may
be solicited by the Placement Agents as agents for the Company at such
times and in such amounts 

as the Placement Agents deem advisable. Each
Placement Agent shall communicate to the Company, orally or in writing,
each reasonable offer to purchase Units received by it as agent of the
Company. The Company shall have the sole right to accept offers to
purchase the Units and may reject any such offer, in whole or in part.
Each Placement Agent shall have the right, in its discretion reasonably
exercised, without notice to the Company, to reject any offer to
purchase Units received by it, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained
herein.

2.4    The Units are being sold to
the Purchasers at a price of $8.47125 per Unit. The purchases of the
Units by the Purchasers shall be evidenced by the execution of
Subscription Agreements by each of the Purchasers and the
Company.

2.5    As compensation for services
rendered, on the Closing Date (as defined in Section 4
hereof), the Company shall pay to the Placement Agents by wire transfer
of immediately available funds to an account or accounts designated by
the Representative, an aggregate amount equal to six and one-half
percent (6.5%) of the gross proceeds received by the Company
from the sale of the Units on such Closing
Date.

2.6    No Units which the Company has
agreed to sell pursuant to this Agreement shall be deemed to have been
purchased and paid for, or sold by the Company, until such Units shall
have been delivered to the Purchaser thereof against payment by such
Purchaser. If the Company shall default in its obligations to deliver
Units to a Purchaser whose offer it has accepted, the Company shall
indemnify and hold the Placement Agents harmless against any loss,
claim, damage or expense arising from or as a result of such default by
the Company in accordance with the procedures set forth in Section 8(c)
herein.

3.    REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.    The Company represents and warrants to, and
agrees with, the Placement Agents and the Purchasers
that:

(a)    The Company has prepared and
filed in conformity with the requirements of the Securities Act of
1933, as amended (the ‘‘Securities
Act’’), and published rules and regulations
thereunder (the ‘‘Rules and
Regulations’’) adopted by the Securities and
Exchange Commission (the
‘‘Commission’’), a
‘‘shelf’’ Registration Statement (as
hereinafter defined) on Form S-3 (File No. 333-140034), which became
effective as of February  12,  2007 (the
‘‘Effective Date’’),
including a base prospectus relating to the securities registered
pursuant to such Registration Statement (the
‘‘Base Prospectus’’), and
such amendments and supplements thereto as may have been required to
the date of this Agreement. The term
‘‘Registration Statement’’
as used in this Agreement means the registration statement (including
all exhibits, financial schedules and all documents and information
deemed to be a part of the Registration Statement pursuant to
Rule  430A under the Securities Act), as amended and/or
supplemented to the date of this Agreement, including the Base
Prospectus. The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the knowledge
of the Company, are threatened by the Commission. The Company, if
required by the Rules and Regulations of the Commission, will file the
Prospectus (as defined below), with the Commission pursuant to Rule
424(b) of the Rules and Regulations. The term
‘‘Prospectus,’’ as used in
this Agreement means the Prospectus, in the form in which it is to be
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, or, if the Prospectus is not to be filed with the
Commission pursuant to Rule 424(b), the Prospectus in the form included
as part of the Registration Statement as of the Effective Date, except
that if any revised prospectus or prospectus supplement shall be
provided to the Representative by the Company for use in connection
with the offering and sale of the Units which differs from the
Prospectus (whether or not such revised prospectus or prospectus
supplement is required to be filed by the Company pursuant to Rule
424(b) of the Rules and Regulations), the term
‘‘Prospectus’’ shall refer
to such revised prospectus or prospectus supplement, as the case may
be, from and after the time it is first provided to the Representative
for such use. Any preliminary prospectus or prospectus 

2

subject to completion included in the
Registration Statement or filed with the Commission pursuant to Rule
424 under the Securities Act is hereafter called a
‘‘Preliminary Prospectus.’’
Any reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the ‘‘Exchange
Act’’), on or before the last to occur of the
Effective Date, the date of the Preliminary Prospectus, or the date of
the Prospectus, and any reference herein to the terms
‘‘amend,’’
‘‘amendment,’’ or
‘‘supplement’’ with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include (i) the filing of any document
under the Exchange Act after the Effective Date, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may
be, which is incorporated by reference and (ii) any such document so
filed. If the Company has filed an abbreviated registration statement
to register additional securities pursuant to Rule 462(b) under the
Rules (the ‘‘462(b) Registration
Statement’’), then any reference herein to the
Registration Statement shall also be deemed to include such 462(b)
Registration Statement.

(b)    As of the
Applicable Time (as defined below) and as of the Closing Date, neither
(i) any General Use Free Writing Prospectus (as defined below) issued
at or prior to the Applicable Time, and the Pricing Prospectus (as
defined below) and the information included on Schedule A
hereto, all considered together (collectively, the
‘‘General Disclosure
Package’’), nor (ii) any individual Limited Use
Free Writing Prospectus (as defined below), when considered together
with the General Disclosure Package, included or will include, any
untrue statement of a material fact or omitted or as of the Closing
Date will omit, to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company
makes no representations or warranties as to information contained in
or omitted from any Issuer Free Writing Prospectus, in reliance upon,
and in conformity with, written information furnished to the Company
through the Representative by or on behalf of any Placement Agent
specifically for inclusion therein, which information the parties
hereto agree is limited to the Placement Agents’ Information (as
defined in Section 18). As used in this paragraph (b)
and elsewhere in this
Agreement:

‘‘Applicable
Time’’ means 5:00 P.M., New York time, on the date of
this Agreement.

‘‘Pricing
Prospectus’’ means the Preliminary Prospectus, if
any, and the Base Prospectus, each as amended and supplemented
immediately prior to the Applicable Time, including any document
incorporated by reference therein and any prospectus supplement deemed
to be a part thereof.

‘‘Issuer Free
Writing Prospectus’’ means any ‘‘issuer
free writing prospectus,’’ as defined in Rule  433
under the Securities Act relating to the Units 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.

‘‘General Use Free Writing
Prospectus’’ means any Issuer Free Writing Prospectus
that is identified on Schedule A to this
Agreement.

‘‘Limited Use Free Writing
Prospectuses’’ means any Issuer Free Writing
Prospectus that is not a General Use Free Writing
Prospectus.

(c)    No order preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus relating to the Offering has been
issued by the Commission, and no proceeding for that purpose or
pursuant to Section 8A of the Securities Act has been instituted or
threatened by the Commission, and each Preliminary Prospectus, at the
time of filing thereof, conformed in all material respects to the
requirements of the Securities Act and the Rules and Regulations, and
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, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company
makes no representations or warranties as to information contained in
or omitted from any Preliminary Prospectus, in reliance upon, and in
conformity with, written 

3

information furnished to the Company through
the Representative by or on behalf of any Placement Agent specifically
for inclusion therein, which information the parties hereto agree is
limited to the Placement Agents’ Information (as defined in
Section 18).

(d)    At the time the
Registration Statement became or becomes effective, at the date of this
Agreement and at the Closing Date, the Registration Statement conformed
and will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and did not and will not
contain any 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; the Prospectus, at the time the
Prospectus was issued and at the Closing Date, conformed and will
conform in all material respects to the requirements of the Securities
Act and the Rules and Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the foregoing representations and
warranties in this paragraph (d) shall not apply to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon, and in conformity with, written
information furnished to the Company through the Representative by or
on behalf of any Placement Agent specifically for inclusion therein,
which information the parties hereto agree is limited to the Placement
Agents’ Information (as defined in Section 18).

(e)    Each Issuer Free Writing Prospectus, if
any, as of its issue date and at all subsequent times through the
completion of the public offer and sale of the Units or until any
earlier date that the Company notified or notifies the Representative
as described in Section 5(e), did not, does not and will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement, Pricing
Prospectus or the Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part
thereof that has not been superseded or modified, or includes an untrue
statement of a material fact or omitted or would omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances
prevailing at the subsequent time, not misleading. The foregoing
sentence does not apply to statements in or omissions from any Issuer
Free Writing Prospectus in reliance upon, and in conformity with,
written information furnished to the Company through the Representative
by or on behalf of any Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the
Placement Agents’ Information (as defined in Section
18).

(f)    The documents incorporated
by reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and none of such documents contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder and will not contain any 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.

(g)    The Company has not,
directly or indirectly, distributed and will not distribute any
offering material in connection with the Offering other than any
Preliminary Prospectus, the Prospectus and other materials, if any,
permitted under the Securities Act and consistent with Section
5(b) below. The Company will file with the Commission all Issuer
Free Writing Prospectuses, if any, in the time and manner required
under Rules 163(b)(2) and 433(d) under the Securities Act.

(h)    The Company and each Subsidiary (as
defined below) has been duly organized and is validly existing as a
corporation in good standing (or the foreign equivalent thereof) under
the 

4

laws of its jurisdiction of organization. The
Company and each Subsidiary is duly qualified, or is the process of
being qualified, to do business and is in good standing, or will be in
good standing upon such qualification, as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification and has all power and
authority necessary to own or hold its properties and to conduct the
business in which it is engaged, except where the failure to so qualify
or have such power or authority (i) would not have, singularly or in
the aggregate, a material adverse effect on the condition (financial or
otherwise), results of operations, assets or business or prospects of
the Company or any Subsidiary, taken as a whole, or (ii) impair in any
material respect the ability of the Company to perform its obligations
under this Agreement or to consummate any transactions contemplated by
the Agreement, the General Disclosure Package or the Prospectus (any
such effect as described in clauses (i) or (ii), a
‘‘Material Adverse
Effect’’). The Company owns or controls, directly
or indirectly, only the following corporations, partnerships, limited
liability partnerships, limited liability companies, associations or
other entities: Cyclacel Limited, a private limited company organized
under the laws of England and Wales
(‘‘Subsidiary’’).

(i)    The
Company has the full right, power and authority to enter into this
Agreement, each of the Subscription Agreements and that certain Escrow
Agreement (the ‘‘Escrow
Agreement’’) dated as of the date hereof by and
among the Company, the Placement Agents and the escrow agent named
therein, and to perform and to discharge its obligations hereunder and
thereunder; and each of this Agreement and each of the Subscription
Agreements have been duly authorized, executed and delivered by the
Company, and constitutes a valid and binding obligation of the Company
enforceable in accordance with its
terms.

(j)    The shares of Common Stock to
be issued and sold by the Company to the Purchasers hereunder and under
the Subscription Agreements and the shares of Common Stock issuable
upon the exercise of the Warrants (the ‘‘Warrant
Shares’’) have been duly and validly authorized
and the Common Stock, when issued and delivered against payment
therefor as provided herein and in the Subscription Agreements and the
Warrant Shares, when issued and delivered against payment therefore as
provided in the Warrants, will be duly and validly issued, fully paid
and non-assessable and free of any preemptive or similar rights and
will conform to the description thereof contained in the General
Disclosure Package and the
Prospectus.

(k)    The Company has an
authorized capitalization as set forth in the Pricing Prospectus, and
all of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable,
have been issued in compliance with federal and state securities laws,
and conform to the description thereof contained in the General
Disclosure Package and the Prospectus. As of December  31,
2006, there were 16,157,953 shares of Common Stock issued and
outstanding, 2,046,813 shares of Preferred Stock, par value $0.001 of
the Company, issued and outstanding and 4,755,540 shares of Common
Stock were issuable upon the exercise of all options, warrants and
convertible securities outstanding as of such date. Since such date,
the Company has not issued any securities, other than Common Stock of
the Company issued pursuant to the exercise of stock options previously
outstanding under the Company’s stock option plans or the
issuance of restricted Common Stock pursuant to employee stock purchase
plans. None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding shares of capital stock,
options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or
any of its subsidiaries other than those described above or accurately
described in the General Disclosure Package. The description of the
Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as
described in the General Disclosure Package and the Prospectus,
accurately and fairly present the information required to be shown with
respect to such plans, arrangements, options and
rights.

(l)    All the outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable and, except to the extent set
forth in the 

5

General Disclosure Package or the Prospectus,
are owned by the Company directly or indirectly through one or more
wholly-owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third
party.

(m)    The execution, delivery and
performance of this Agreement, the Subscription Agreements and the
Escrow Agreement by the Company, the issue and sale of the Units by the
Company and the consummation of the transactions contemplated hereby
and thereby will not (with or without notice or lapse of time or both)
conflict with or result in a breach or violation of any of the terms or
provisions of, constitute a default under, give rise to any right of
termination or other right or the cancellation or acceleration of any
right or obligation or loss of a benefit under, or give rise to the
creation or imposition of any lien, encumbrance, security interest,
claim or charge upon any property or assets of the Company or any
Subsidiary pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is
bound or to which any of the property or assets of the Company or any
Subsidiary is subject, nor will such actions result in any violation of
the provisions of the charter or by-laws (or analogous governing
instruments, as applicable) of the Company or any Subsidiary or, to the
Company’s knowledge, any law, statute, rule, regulation,
judgment, order or decree of any court or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their properties or
assets.

(n)    Except for the registration of
the securities offered in the Offering under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state or foreign securities laws, the National Association of
Securities Dealers, Inc. and the Nasdaq Global Market
(‘‘Nasdaq GM’’) in
connection with the offering and sale of the Units by the Company, no
consent, approval, authorization or order of, or filing, qualification
or registration with, any court or governmental agency or body, foreign
or domestic, which has not been made, obtained or taken and is not in
full force and effect, is required for the execution, delivery and
performance of this Agreement, the Subscription Agreements and the
Escrow Agreement by the Company, the offer or sale of the Units or the
consummation of the transactions contemplated hereby or thereby.

(o)    Ernst & Young LLP, who have certified
certain financial statements and related schedules included or
incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus, and have audited the
Company’s internal control over financial reporting and
management’s assessment thereof, is an independent registered
public accounting firm as required by the Securities Act and the Rules
and Regulations and the Public Company Accounting Oversight Board
(United States) (the
‘‘PCAOB’’). Except as
pre-approved in accordance with the requirements set forth in Section
10A of the Exchange Act, Ernst & Young LLP has not been engaged by
the Company to perform any ‘‘prohibited
activities’’ (as defined in Section 10A of the Exchange
Act).

(p)    The financial statements,
together with the related notes and schedules, included or incorporated
by reference in the General Disclosure Package, the Prospectus and in
the Registration Statement fairly present the financial position and
the results of operations and changes in financial position of the
Company and its consolidated subsidiaries and other consolidated
entities at the respective dates or for the respective periods therein
specified. Such statements and related notes and schedules have been
prepared in accordance with the generally accepted accounting
principles in the United States
(‘‘GAAP’’) applied on a
consistent basis throughout the periods involved except as may be set
forth in the related notes included or incorporated by reference in the
General Disclosure Package. The financial statements, together with the
related notes and schedules, included or incorporated by reference in
the General Disclosure Package and the Prospectus comply in all
material respects with the Securities Act, the Exchange Act, and the
Rules and Regulations and the rules and regulations under the Exchange
Act. No other financial statements or supporting schedules or exhibits
are required by the Securities Act or the Rules and Regulations to be
described, or included or incorporated by reference in the Registration
Statement, the General Disclosure Package or the Prospectus. There

6

is no pro forma or as adjusted financial
information which is required to be included in the Registration
Statement, the General Disclosure Package, or and the Prospectus or a
document incorporated by reference therein in accordance with the
Securities Act and the Rules and Regulations which has not been
included or incorporated as so required. The pro forma and pro forma as
adjusted financial information and the related notes included or
incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus have been properly compiled and
prepared in accordance with the applicable requirements of the
Securities Act and the Rules and Regulations and present fairly the
information shown therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.

(q)    Neither the Company nor any
Subsidiary has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the
General Disclosure Package, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the General Disclosure Package; and, since such date,
there has not been any change in the capital stock or long-term debt of
the Company or any Subsidiary or any material adverse changes, or any
development involving a prospective material adverse change, in or
affecting the business, assets, general affairs, management, financial
position, prospects, stockholders’ equity or results of
operations of the Company or any Subsidiary, otherwise than as set
forth or contemplated in the General Disclosure Package.

(r)    Except as set forth in the General
Disclosure Package, there is no legal or governmental action, suit,
claim or proceeding pending to which the Company or any Subsidiary is a
party or of which any property or assets of the Company or any
Subsidiary is the subject which is required to be described in the
Registration Statement, the General Disclosure Package or the
Prospectus or a document incorporated by reference therein and is not
described therein, or which, singularly or in the aggregate, if
determined adversely to the Company or any Subsidiary could have a
Material Adverse Effect or prevent the consummation of the transactions
contemplated hereby; and to the best of the Company’s knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by
others.

(s)    Neither the Company nor any
Subsidiary is in (i) violation of its charter or by-laws (or analogous
governing instrument, as applicable), (ii) default in any respect, and
no event has occurred which, 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, lease or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject or (iii) to the
Company’s knowledge, violation of any law, ordinance,
governmental rule, regulation or court order, decree or judgment to
which it or its property or assets is subject except, in the case of
clauses (ii) and (iii) of this paragraph (s), for any violations or
defaults which, singularly or in the aggregate, would not have a
Material Adverse Effect.

(t)    The Company
and each Subsidiary possesses all licenses, certificates,
authorizations and permits issued by, and have made all declarations
and filings with, the appropriate local, state, federal or foreign
regulatory agencies or bodies which are necessary or desirable for the
ownership of its properties or the conduct of its businesses as
described in the General Disclosure Package and the Prospectus
(collectively, the ‘‘Governmental
Permits’’) except where any failures to possess
or make the same, singularly or in the aggregate, would not have a
Material Adverse Effect. The Company and each Subsidiary is in
compliance with all such Governmental Permits; all such Governmental
Permits are valid and in full force and effect, except where the
validity or failure to be in full force and effect would not,
singularly or in the aggregate, have a Material Adverse Effect. To the
Company’s knowledge, all such Governmental Permits are free and
clear of any restriction or condition that are in addition to, or
materially different from those normally applicable to similar
licenses, certificates, authorizations and permits. Neither the Company
nor any Subsidiary has received notification of any revocation or
modification (or proceedings related 

7

thereto) of any such Governmental Permit and
the Company has no reason to believe that any such Governmental Permit
will not be renewed.

(u)    Neither the
Company nor any Subsidiary is or, after giving effect to the offering
of the Units and the application of the proceeds thereof as described
in the General Disclosure Package and the Prospectus, will become an
‘‘investment company’’ within the meaning
of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission
thereunder.

(v)    Neither the Company nor
any Subsidiary, nor to the Company’s knowledge, any of the
Company’s and any Subsidiary’s officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.

(w)    To the best of the
Company’s knowledge, the Company and each Subsidiary owns or
possesses the right to use all patents, trademarks, trademark
registrations, service marks, service mark registrations, trade names,
copyrights, licenses, inventions, software, databases, know-how,
Internet domain names, trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures, and other intellectual property (collectively,
‘‘Intellectual Property’’)
necessary to carry on their respective businesses as currently
conducted, and as proposed to be conducted and described in the General
Disclosure Package and the Prospectus, and the Company is not aware of
any claim to the contrary or any challenge by any other person to the
rights of the Company or any Subsidiary with respect to the foregoing
except for those that could not have a Material Adverse Effect. The
Intellectual Property licenses described in the General Disclosure
Package and the Prospectus are valid, binding upon, and enforceable by
or against the parties thereto in accordance to its terms. The Company
and each Subsidiary has complied in all material respects with, and is
not in breach nor has received any asserted or threatened claim of
breach of, any Intellectual Property license, and the Company has no
knowledge of any breach or anticipated breach by any other person to
any Intellectual Property license. To the best of the Company’s
knowledge, the Company’s and each Subsidiary’s business
as now conducted and as proposed to be conducted does not and will not
infringe or conflict with any valid patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses or other Intellectual
Property or franchise right of any person, except for any such acts
that would not have a Material Adverse Effect. No claim has been made
against the Company or any Subsidiary alleging the infringement by the
Company or any Subsidiary of any patent, trademark, service mark, trade
name, copyright, trade secret, license in or other intellectual
property right or franchise right of any person. The Company and each
Subsidiary has taken all reasonable steps to protect, maintain and
safeguard its rights in all Intellectual Property, including the
execution of appropriate nondisclosure and confidentiality agreements.
The consummation of the transactions contemplated by this Agreement
will not result in the loss or impairment of or payment of any
additional amounts with respect to, nor require the consent of any
other person in respect of, each of the Company’s and each
Subsidiary’s right to own, use, or hold for use any of the
Intellectual Property as owned, used or held for use in the conduct of
its business as currently conducted. The Company and each Subsidiary
has at all times complied with all applicable laws relating to privacy,
data protection, and the collection and use of personal information
collected, used, or held for use by the Company or any Subsidiary in
the conduct of the Company’s or any Subsidiary’s business.
No claims have been asserted or threatened against the Company or any
Subsidiary alleging a violation of any person’s privacy or
personal information or data rights and the consummation of the
transactions contemplated hereby will not breach or otherwise cause any
violation of any law related to privacy, data protection, or the
collection and use of personal information collected, used, or held for
use by the Company or any Subsidiary in the conduct of the
Company’s or any Subsidiary’s business. The Company and
each Subsidiary takes reasonable measures to ensure that such
information is protected against unauthorized access, use,
modification, or other misuse.

8

(x)    The Company and
each Subsidiary has good and marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real or personal
property which are material to the business of the Company and any
Subsidiary, free and clear of all liens, encumbrances, security
interests, claims and defects that do not, singularly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any Subsidiary; and all of the leases and subleases
material to the business of the Company or any Subsidiary, and under
which the Company or any Subsidiary holds properties described in the
General Disclosure Package and the Prospectus, are in full force and
effect, and neither the Company nor any Subsidiary has received any
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any Subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or any Subsidiary to the continued possession
of the leased or subleased premises under any such lease or
sublease.

(y)    No labor disturbance by the
employees of the Company or any Subsidiary exists or, to the best of
the Company’s knowledge, is imminent, and the Company has no
actual knowledge of any existing or imminent labor disturbance by the
employees of any of its or any Subsidiary’s principal suppliers,
manufacturers, customers or contractors, that could reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect. The Company is not aware that any key employee or significant
group of employees of the Company or any Subsidiary plans to terminate
employment with the Company or any
Subsidiary.

(z)    No
‘‘prohibited transaction’’ (as defined in
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder (‘‘ERISA’’), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time (the ‘‘Code’’)) or
‘‘accumulated funding deficiency’’ (as
defined in Section 302 of ERISA) or any of the events set forth in
Section 4043(b) of ERISA (other than events with respect to which the
thirty (30)-day notice requirement under Section 4043 of ERISA has been
waived) has occurred or could reasonably be expected to occur with
respect to any employee benefit plan of the Company or any Subsidiary
which could, singularly or in the aggregate, have a Material Adverse
Effect. Each employee benefit plan of the Company or any Subsidiary is
in compliance in all material respects with applicable law, including
ERISA and the Code. The Company and each Subsidiary has not incurred
and could not reasonably be expected to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from, any
pension plan (as defined in ERISA). Each pension plan for which the
Company or any Subsidiary would have any liability that is intended to
be qualified under Section 401(a) of the Code is in material compliance
with the Code.

(aa)    The Company and each
Subsidiary is in compliance with all foreign, federal, state and local
rules, laws and regulations relating to the use, treatment, storage and
disposal of hazardous or toxic substances or waste and protection of
health and safety or the environment which are applicable to its
businesses (‘‘Environmental
Laws’’), except where the failure to comply would
not, singularly or in the aggregate, have a Material Adverse Effect.
There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances regulated by
Environmental Laws (‘‘Hazardous
Substances’’) by or caused by the Company or any
Subsidiary (or, to the Company’s knowledge and without
independent investigation, any other entity for whose acts or omissions
the Company or any Subsidiary is or may otherwise be liable) upon any
of the property now or previously owned or leased by the Company or any
Subsidiary, or upon any other property, in violation of any law,
statute, ordinance, rule, regulation, order, judgment, decree or permit
or which would, under any law, statute, ordinance, rule (including rule
of common law), regulation, order, judgment, decree or permit, give
rise to any liability, except for any violation or liability which
would not have, singularly or in the aggregate with all such violations
and liabilities, a Material Adverse Effect; to the Company’s
actual knowledge and without independent investigation, there has been
no disposal, discharge, emission or other release of any kind onto such
property or into the environment surrounding such property of any
Hazardous 

9

Substance, except for any such disposal,
discharge, emission, or other release in violation of Environmental
Laws which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect.

(bb)    The Company and each Subsidiary (i) has
timely filed all necessary federal, state, local and foreign tax
returns, and all such returns were true, complete and correct, (ii) has
paid all federal, state, local and foreign taxes, assessments,
governmental or other charges due and payable for which it is liable,
including, without limitation, all sales and use taxes and all taxes
which the Company or any Subsidiary is obligated to withhold from
amounts owing to employees, creditors and third parties, and (iii) does
not have any tax deficiency or claims outstanding or assessed or, to
the best of its knowledge, proposed against any of them, except those,
in each of the cases described in clauses (i), (ii) and (iii) of this
paragraph (bb), that would not, singularly or in the
aggregate, have a Material Adverse Effect. The Company and each
Subsidiary has not engaged in any transaction which is a corporate tax
shelter or which could be characterized as such by the Internal Revenue
Service or any other taxing authority. The accruals and reserves on the
books and records of the Company in respect of tax liabilities for any
taxable period not yet finally determined are adequate to meet any
assessments and related liabilities for any such period, and since
December  31,  2005, the Company and each Subsidiary has
not incurred any liability for taxes other than in the ordinary
course.

(cc)    The Company and each
Subsidiary carries, or is covered by, insurance provided by recognized,
financially sound and reputable institutions with policies in such
amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for
companies engaged in similar businesses in similar industries. The
Company has no reason to believe that it or any Subsidiary will not be
able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business
as now conducted and at a cost that would not result in a Material
Adverse Effect. Neither the Company nor any Subsidiary has been denied
any insurance coverage that it has sought or for which it has
applied.

(dd)    The Company and each
Subsidiary maintains a system of internal accounting and other controls
sufficient to provide reasonable assurances 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 GAAP and to
maintain accountability for assets; (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 existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Except as described in
the General Disclosure Package, since the end of the Company’s
most recent audited fiscal year, there as been (A) no material weakness
in the Company’s internal control over financial reporting
(whether or not remediated) and (B) 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.

(ee)    The minute books of the Company and each
Subsidiary have been made available to the Placement Agents and counsel
for the Placement Agents, and such books (i) contain a complete summary
of all meetings and actions of the board of directors (including each
board committee) and shareholders of the Company and each Subsidiary
(or analogous governing bodies and interest holders, as applicable),
since January  1,  2004 through the date of the latest
meeting and action, and (ii) accurately, in all material respects,
reflect all transactions referred to in such minutes.

(ff)    There is no franchise, lease, contract,
agreement or document required by the Securities Act or by the Rules
and Regulations to be described in the General Disclosure Package and
in the Prospectus or a document incorporated by reference therein or to
be filed as an exhibit to the Registration Statement or a document
incorporated by reference therein which is not described or filed
therein as required; and all descriptions of any such franchises,
leases, contracts, agreements 

10

or documents contained in the Registration
Statement or in a document incorporated by reference therein are
accurate and complete descriptions of such documents in all material
respects. Other than as described in the General Disclosure Package, no
such franchise, lease, contract or agreement has been suspended or
terminated for convenience or default by the Company or any Subsidiary
or any of the other parties thereto, and neither the Company nor any
Subsidiary has received notice nor does the Company have any other
knowledge of any such pending or threatened suspension or termination,
except for such pending or threatened suspensions or terminations that
would not reasonably be expected to, singularly or in the aggregate,
have a Material Adverse Effect.

(gg)    No
relationship, direct or indirect, exists between or among the Company
and any Subsidiary on the one hand, and the directors, officers,
stockholders (or analogous interest holders), customers or suppliers of
the Company or any Subsidiary or any of their affiliates on the other
hand, which is required to be described in the General Disclosure
Package and the Prospectus or a document incorporated by reference
therein and which is not so
described.

(hh)    No person or entity has
the right to require registration of shares of Common Stock or other
securities of the Company or any Subsidiary because of the filing or
effectiveness of the Registration Statement or otherwise, except for
persons and entities who have expressly waived such right in writing or
who have been given timely and proper written notice and have failed to
exercise such right within the time or times required under the terms
and conditions of such right. Except as described in the General
Disclosure Package, there are no persons with registration rights or
similar rights to have any securities registered by the Company or any
Subsidiary under the Securities
Act.

(ii)    Neither the Company nor any
Subsidiary owns any ‘‘margin securities’’
as that term is defined in Regulation U of the Board of Governors of
the Federal Reserve System (the ‘‘Federal Reserve
Board’’), and none of the proceeds of the sale of
the Units will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause
any of the Units to be considered a ‘‘purpose
credit’’ within the meanings of Regulation T, U or X of
the Federal Reserve Board.

(jj)    Except
for this Agreement, neither the Company nor any Subsidiary is a party
to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or any Placement Agent
for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Units or any transaction
contemplated by this Agreement, the Registration Statement, the General
Disclosure Package or the
Prospectus.

(kk)    No forward-looking
statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in either the General
Disclosure Package or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.

(ll)    The Company is subject to and
in compliance in all material respects with the reporting requirements
of Section 13 or Section 15(d) of the Exchange Act. The Common Stock is
registered pursuant to Section 12(g) of the Exchange Act and is listed
on the Nasdaq GM, and the Company has taken no action designed to, or
reasonably likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq GM, nor has the Company received any notification
that the Commission or the National Association of Securities Dealers,
Inc. (‘‘NASD’’) is
contemplating terminating such registration or listing. No consent,
approval, authorization or order of, or filing, notification or
registration with, the Nasdaq GM is required for the listing and
trading of the shares of Common Stock on the Nasdaq
GM.

(mm)    The Company is in material
compliance with all applicable provisions of the Sarbanes-Oxley Act of
2002 and all rules and regulations promulgated thereunder or
implementing the provisions thereof (the
‘‘Sarbanes-Oxley Act’’) that
are then in effect and is 

11

taking steps to ensure that it will be in
compliance with other applicable provisions of the Sarbanes-Oxley Act
not currently in effect upon and at all times after the effectiveness
of such provisions.

(nn)    The Company is
in compliance with all applicable corporate governance requirements set
forth in the Nasdaq Global Marketplace Rules that are then in effect
and is taking steps to ensure that it will be in compliance with other
applicable corporate governance requirements set forth in the Nasdaq
Global Marketplace Rules not currently in effect upon and all times
after the effectiveness of such
requirements.

(oo)    Neither the Company nor
any Subsidiary, nor, to the best of the Company’s knowledge, any
employee or agent of the Company or any Subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state, local or foreign office in violation of any law
(including the Foreign Corrupt Practices Act of 1977, as amended) or of
the character required to be disclosed in the Registration Statement,
the General Disclosure Package or the Prospectus or a document
incorporated by reference
therein.

(pp)    There are no transactions,
arrangements or other relationships between and/or among the Company or
any Subsidiary, any of their affiliates (as such term is defined in
Rule 405 of the Securities Act) and any unconsolidated entity,
including, but not limited to, any structure finance, special purpose
or limited purpose entity that could reasonably be expected to
materially affect the Company’s or any Subsidiary’s
liquidity or the availability of or requirements for their capital
resources required to be described in the General Disclosure Package
and the Prospectus or a document incorporated by reference therein
which have not been described as
required.

(qq)    There are no outstanding
loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees or indebtedness by the
Company to or for the benefit of any of the officers or directors of
the Company or any of their respective family members, except as
disclosed in the Registration Statement, the General Disclosure Package
and the Prospectus.

(rr)    The statistical
and market related data included in the Registration Statement, the
General Disclosure Package and the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate, and
such data agree with the sources from which they are
derived.

(ss)    The operations of the
Company and each Subsidiary are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the
‘‘Money Laundering Laws’’),
and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary with respect to the Money Laundering Laws is
pending, or to the best knowledge of the Company,
threatened.

(tt)    Neither the Company nor
any Subsidiary nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary
is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department
(‘‘OFAC’’); and the Company
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 or entity, for the
purpose of financing the activities of any person currently subject to
any U.S. sanctions administered by
OFAC.

(uu)    Neither the Company, nor any
Subsidiary, nor any of their affiliates (within the meaning of NASD
Conduct Rule 2720(b)(1)(a)) directly or indirectly controls, is
controlled by, or is under common control with, or is an associated
person (within the meaning of Article I, Section 1(ee) of the By-laws
of the NASD) of, any member firm of the
NASD.

(vv)    No approval of the shareholders
of the Company under the rules and regulations of Nasdaq (including
Rule 4350 of the Nasdaq Global Marketplace Rules) is required for the
Company to issue and deliver to the Purchasers the
Units.

12

Any certificate signed by or on behalf of
the Company and delivered to any Placement Agent or to counsel for the
Placement Agents shall be deemed to be a representation and warranty by
the Company to the Placement Agents and the Purchasers as to the
matters covered thereby.

4.    THE
CLOSING.    The time and date of closing and delivery of
the documents required to be delivered to the Placement Agents pursuant
to Sections 5 and 7 hereof shall be at 11:00 A.M.,
New  York time, on February  16,  2007 (the
‘‘Closing Date’’) at the
office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., The
Chrysler Center, 666 Third Avenue, New York, New York
10017.

5.    FURTHER AGREEMENTS OF THE
COMPANY.    The Company agrees with the Placement Agents
and the Purchasers:

(a)    To prepare the
Rule 462(b) Registration Statement, if necessary, in a form approved by
the Representative and file such Rule 462(b) Registration Statement
with the Commission on the date hereof; to prepare the Prospectus in a
form approved by the Representative containing information previously
omitted at the time of effectiveness of the Registration Statement in
reliance on rules 430A, 430B and 430C and to file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the
second business (2nd) day following the execution and
delivery of this Agreement or, if applicable, such earlier time as may
be required by Rule 430A of the Rules and Regulations; to notify the
Representative immediately of the Company’s intention to file or
prepare any supplement or amendment to any Registration Statement or to
the Prospectus and to make no amendment or supplement to the
Registration Statement, the General Disclosure Package or to the
Prospectus to which the Representative shall reasonably object by
notice to the Company after a reasonable period to review; to advise
the Representative, promptly after it receives notice thereof, of the
time when any amendment to any Registration Statement has been filed or
becomes effective or any supplement to the General Disclosure Package
or the Prospectus or any amended Prospectus has been filed and to
furnish the Representative copies thereof; to file promptly all
material required to be filed by the Company with the Commission
pursuant to Rule 433(d) or 163(b)(2), as the case may be; to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus
(or in lieu thereof, the notice referred to in Rule 173(a) under the
Securities Act) is required in connection with the offering or sale of
the Units; to advise the Representative, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus, any Issuer Free Writing Prospectus or the Prospectus, of
the suspension of the qualification of the Units for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement, the General
Disclosure Package or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus, any
Issuer Free Writing Prospectus or the Prospectus or suspending any such
qualification, and promptly to use its best efforts to obtain the
withdrawal of such order.

(b)    The Company
represents and agrees that, unless it obtains the prior consent of the
Representative, and each Placement Agent represents and agrees that,
unless it obtains the prior consent of the Representative and the
Company, it has not made and will not, make any offer relating to the
Units that would constitute a ‘‘free writing
prospectus’’ as defined in Rule 405 under the Securities
Act unless the prior written consent of the Representative has been
received (each, a ‘‘Permitted Free Writing
Prospectus’’); provided that the prior
written consent of the Representative hereto shall be deemed to have
been given in respect of the Issuer Free Writing
Prospectus[es] included in Schedule A hereto. The
Company represents that it has treated and agrees that it will treat
each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus, comply with the requirements of Rules 164 and 433 under the
Securities Act applicable to any Issuer Free Writing Prospectus,
including the requirements relating to timely filing with the
Commission, legending and record keeping and will not take any action
that would result in any Placement Agent or the Company being required
to file with the Commission 

13

pursuant to Rule 433(d) under the Securities
Act a free writing prospectus prepared by or on behalf of such
Placement Agent that such Placement Agent otherwise would not have been
required to file thereunder.

(c)    If at
any time when a Prospectus relating to the Units is required to be
delivered under the Securities Act, any event occurs or condition
exists as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or the Registration Statement, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any time
to amend or supplement any Registration Statement or the Prospectus to
comply with the Securities Act or the Exchange Act, the Company will
promptly notify the Representative, and upon the
Representative’s request, the Company will promptly prepare and
file with the Commission, at the Company’s expense, an amendment
to the Registration Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such
compliance and will deliver to the Placement Agents, without charge,
such number of copies thereof as the Placement Agents may reasonably
request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Placement
Agents.

(d)    If the General Disclosure
Package is being used to solicit offers to buy the Units at a time when
the Prospectus is not yet available to prospective purchasers and any
event shall occur as a result of which, in the judgment of the Company
or in the reasonable opinion of the Representative, it becomes
necessary to amend or supplement the General Disclosure Package in
order to make the statements therein, in the light of the circumstances
then prevailing, not misleading, or to make the statements therein not
conflict with the information contained or incorporated by reference in
the Registration Statement then on file and not superseded or modified,
or if it is necessary at any time to amend or supplement the General
Disclosure Package to comply with any law, the Company promptly will
either (i) prepare, file with the Commission (if required) and furnish
to the Placement Agents and any dealers an appropriate amendment or
supplement to the General Disclosure Package or (ii) prepare and file
with the Commission an appropriate filing under the Exchange Act which
shall be incorporated by reference in the General Disclosure Package so
that the General Disclosure Package as so amended or supplemented will
not, in the light of the circumstances then prevailing, be misleading
or conflict with the Registration Statement then on file, or so that
the General Disclosure Package will comply with
law.

(e)    If at any time following issuance
of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free Writing Prospectus
conflicted or will conflict with the information contained in the
Registration Statement, Pricing Prospectus or Prospectus, including any
document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof and not superseded or modified
or included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances prevailing at the subsequent time, not
misleading, the Company has promptly notified or will promptly notify
the Representative so that any use of the Issuer Free Writing
Prospectus may cease until it is amended or supplemented and has
promptly amended or will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free
Writing Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Representative by or on
behalf of any Placement Agent specifically for inclusion therein, which
information the parties hereto agree is limited to the Placement
Agents’ Information (as defined in Section
18).

14

(f)    To the extent
not available on the Commission’s EDGAR system or any successor
system, to furnish promptly to the Placement Agents and to counsel for
the Placement Agents a signed copy of the Registration Statement as
originally filed with the Commission, and of each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith.

(g)    To the extent not available
on the Commission’s EDGAR system or any successor system, to
deliver promptly to the Representative in New York City such number of
the following documents as the Representative shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission (in each case excluding exhibits), (ii) each
Preliminary Prospectus, (iii) any Issuer Free Writing Prospectus, (iv)
the Prospectus (the delivery of the documents referred to in clauses
(i), (ii), (iii) and (iv) of this paragraph (g) to be made not
later than 10:00 A.M., New York time, on the business day following the
execution and delivery of this Agreement), (v) conformed copies of any
amendment to the Registration Statement (excluding exhibits), (vi) any
amendment or supplement to the General Disclosure Package or the
Prospectus (the delivery of the documents referred to in clauses (v)
and (vi) of this paragraph (g) to be made not later than 10:00
A.M., New York City time, on the business day following the date of
such amendment or supplement) and (vii) any document incorporated by
reference in the General Disclosure Package or the Prospectus
(excluding exhibits thereto) (the delivery of the documents referred to
in clause (vi) of this paragraph (g) to be made not later than
10:00 A.M., New York City time, on the business day following the date
of such document).

(h)    To make generally
available to its shareholders as soon as practicable, but in any event
not later than eighteen (18) months after the effective date of each
Registration Statement (as defined in Rule 158(c) under the Securities
Act), an earnings statement of the Company and any Subsidiary (which
need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company,
Rule 158); and to furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, shareholders’ equity and cash
flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and as soon as possible after each of
the first three fiscal quarters of each fiscal year (beginning with the
first fiscal quarter after the effective date of such Registration
Statement), consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable
detail.

(i)    To take promptly from time to
time such actions as the Representative may reasonably request to
qualify the Units for offering and sale under the securities or Blue
Sky laws of such jurisdictions (domestic or foreign) as the
Representative may designate and to continue such qualifications in
effect, and to comply with such laws, for so long as required to permit
the offer and sale of Units in such jurisdictions; provided that
the Company shall not be obligated to qualify as foreign corporations
in any jurisdiction in which they are not so qualified or to file a
general consent to service of process in any jurisdiction.

(j)    To the extent not available on the
Commission’s EDGAR system or any successor system, during the
period of two (2) years from the date hereof, to deliver to the
Placement Agents, (i) as soon as they are available, copies of all
reports or other communications furnished to shareholders (other than
reports, proxy statements and other information that is electronically
filed with the Commission via EDGAR or any successor system), and (ii)
as soon as they are available, copies of any reports and financial
statements furnished or filed with the Commission or any national
securities exchange or automatic quotation system on which the
Company’s securities are listed or quoted.

(k)    That the Company will not, for a period
of ninety (90) days from the date of the Prospectus, (the
‘‘Lock-Up Period’’) without
the prior written consent of the Representative, directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, other than the
Company’s sale of the Units hereunder and the issuance of
restricted Common Stock or options to acquire Common Stock pursuant to
the Company’s 

15

employee benefit plans, qualified stock
option plans or other employee compensation plans as such plans are in
existence on the date hereof and described in the Prospectus and the
issuance of Common Stock pursuant to the valid exercises of options,
warrants or rights outstanding on the date hereof. The Company will
cause each executive officer, director, shareholder, optionholder and
warrantholder listed in Schedule B to furnish to the
Representative, prior to the Closing Date, a letter, substantially in
the form of Exhibit C hereto, pursuant to which each such
person shall agree, among other things, not to directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, not to engage in
any swap or other agreement or arrangement that transfers, in whole or
in part, directly or indirectly, the economic risk of ownership of
Common Stock or any such securities and not to engage in any short
selling of any Common Stock or any such securities, during the Lock-Up
Period, without the prior written consent of the Representative. The
Company also agrees that during such period, the Company will not file
any registration statement, preliminary prospectus or prospectus, or
any amendment or supplement thereto, under the Securities Act for any
such transaction or which registers, or offers for sale, Common Stock
or any securities convertible into or exercisable or exchangeable for
Common Stock, except for a registration statement on Form S-8 relating
to employee benefit plans. The Company hereby agrees that (i) if it
issues an earnings release or material news, or if a material event
relating to the Company occurs, during the last seventeen (17) days of
the Lock-Up Period, or (ii) if prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results
during the sixteen (16)-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this paragraph (k)
or the letter shall continue to apply until the expiration of the
eighteen (18)-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material
event.

(l)    To supply the Representative
with copies of all correspondence to and from, and all documents issued
to and by, the Commission in connection with the registration of the
Units under the Securities Act or the Registration Statement, any
Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto or document incorporated by reference
therein.

(m)    Prior to the Closing Date, to
furnish to the Placement Agents, as soon as they have been prepared,
copies of any unaudited interim consolidated financial statements of
the Company for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the
Prospectus.

(n)    Prior to the Closing Date,
not to issue any press release or other communication directly or
indirectly or hold any press conference with respect to the Company,
its condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing communications in
the ordinary course of business and consistent with the past practices
of the Company and of which the Representative is notified), without
the prior written consent of the Representative, unless in the judgment
of the Company and its counsel, and after notification to the
Representative, such press release or communication is required by
law.

(o)    Until the Representative shall
have notified the Company of the completion of the offering of the
Units, that the Company will not, and will cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act) not to,
either alone or with one or more other persons, bid for or purchase,
for any account in which it or any of its affiliated purchasers has a
beneficial interest, any Units, or attempt to induce any person to
purchase any Units; and not to, and to cause its affiliated purchasers
not to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the
Units.

(p)    Not to take any action prior to
the Closing Date which would require the Prospectus to be amended or
supplemented pursuant to Section
5.

(q)    To at all times materially
comply with all applicable provisions of the Sarbanes-Oxley Act in
effect from time to time.

16

(r)    To apply the
net proceeds from the sale of the Units as set forth in the
Registration Statement, the General Disclosure Package and the
Prospectus under the heading ‘‘Use of
Proceeds.’’

(s)    To use its
best efforts to list, subject to notice of issuance, the Common Stock
on the Nasdaq GM.

(t)    To use its best
efforts to assist the Representative with any filings with the NASD and
obtaining clearance from the NASD as to the amount of compensation
allowable or payable to the Placement
Agents.

(u)    To use its best efforts to do
and perform all things required to be done or performed under this
Agreement by the Company prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the
Units.

6.    PAYMENT OF
EXPENSES.    The Company agrees to pay, or reimburse if
paid by the Placement Agents, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated:
(a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Units to the Purchasers and any taxes
payable in that connection; (b) the costs incident to the Registration
of the Units under the Securities Act; (c) the costs incident to the
preparation, printing and distribution of the Registration Statement,
the Base Prospectus, any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the General Disclosure Package, the Prospectus, any
amendments, supplements and exhibits thereto or any document
incorporated by reference therein and the costs of printing,
reproducing and distributing any transaction document by mail, telex or
other means of communications; (d) the fees and expenses (including
related fees and expenses of counsel for the Placement Agents) incurred
in connection with securing any required review by the NASD of the
terms of the sale of the Units and any filings made with the NASD; (e)
any applicable listing, quotation or other fees; (f) the fees and
expenses (including related fees and expenses of counsel to the
Placement Agents) of qualifying the Units under the securities laws of
the several jurisdictions as provided in Section 5(i) and of
preparing, printing and distributing wrappers, Blue Sky Memoranda and
Legal Investment Surveys; (g) the cost of preparing and printing stock
certificates; (h) all fees and expenses of the registrar and transfer
agent of the Units; (i) the reasonable and documented fees,
disbursements and expenses of counsel to the Placement Agents not to
exceed, along with any fees and expenses incurred in connection with
(d) above by counsel to the Placement Agents, $60,000 and (j) all other
costs and expenses incident to the offering of the Units or the
performance of the obligations of the Company under this Agreement
(including, without limitation, the fees and expenses of the
Company’s counsel and the Company’s independent
accountants and the travel and other reasonable documented expenses
incurred by Company personnel in connection with any
‘‘road show’’ including, without
limitation, any expenses advanced by the Placement Agents on the
Company’s behalf (which will be promptly reimbursed));
provided that, except to the extent otherwise provided in this
Section 6 and in Sections 8 and 10, the
Placement Agents shall pay their own respective costs and
expenses.

7.    CONDITIONS TO THE OBLIGATIONS OF
THE PLACEMENT AGENTS AND THE PURCHASERS, AND THE SALE OF THE
UNITS.    The respective obligations of the Placement
Agents hereunder and the Purchasers under the Subscription Agreements,
and the Closing of the sale of the Units, are subject to the accuracy,
when made and on the Applicable Time and on the Closing Date, of the
representations and warranties of the Company contained herein, to the
accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of
its obligations hereunder, and to each of the following additional
terms and conditions:

(a)    No stop order
suspending the effectiveness of the Registration Statement or any part
thereof, preventing or suspending the use of any Base Prospectus, any
Preliminary Prospectus, the Prospectus or any Permitted Free Writing
Prospectus or any part thereof shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the
Securities Act shall have been initiated or threatened by the
Commission, and all requests for additional information on the part of
the Commission (to be included or incorporated by reference in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable 

17

satisfaction of the Representative; the Rule
462(b) Registration Statement, if any, each Issuer Free Writing
Prospectus, if any, and the Prospectus shall have been filed with the
Commission within the applicable time period prescribed for such filing
by, and in compliance with, the Rules and Regulations and in accordance
with Section 5(a), and the Rule 462(b) Registration Statement,
if any, shall have become effective immediately upon its filing with
the Commission; and the NASD shall have raised no objection to the
fairness and reasonableness of the terms of this Agreement or the
transactions contemplated hereby.

(b)    The
Placement Agents shall not have discovered and disclosed to the Company
on or prior to the Closing Date that the Registration Statement or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of counsel for the Placement Agents, is material
or omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading, or that the General Disclosure
Package, any Issuer Free Writing Prospectus or the Prospectus or any
amendment or supplement thereto contains an untrue statement of fact
which, in the opinion of such counsel, is material or omits to state
any fact which, in the opinion of such counsel, is material and is
necessary in order to make the statements, in the light of the
circumstances in which they were made, not
misleading.

(c)    All corporate proceedings
and other legal matters incident to the authorization, form and
validity of each of this Agreement, the Subscription Agreements, the
Escrow Agreement, the Units, the Registration Statement, the General
Disclosure Package, each Issuer Free Writing Prospectus, if any, and
the Prospectus and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Placement
Agents, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.

(d)    Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. shall have furnished to
the Placement Agents, such counsel’s written opinion, as counsel
to the Company, addressed to the Placement Agents and dated the Closing
Date, in the form attached hereto as Exhibit
D.

Such counsel shall also have furnished
to the Placement Agents a written statement, addressed to the Placement
Agents and dated the Closing Date, in form and substance satisfactory
to the Representative, to the effect that (x) such counsel has acted as
counsel to the Company in connection with the preparation of the
Registration Statement, the General Disclosure Package and the
Prospectus, and each amendment or supplement thereto made by the
Company prior to the Closing Date, (y) based on such counsel’s
examination of the Registration Statement, the General Disclosure
Package and the Prospectus, and each amendment or supplement thereto
made by the Company prior to the Closing Date and the documents
incorporated by reference in the General Disclosure Package or the
Prospectus and any further amendment or supplement to any such
incorporated document made by the Company prior to the Closing Date,
and such counsel’s investigations made in connection with the
preparation of the Registration Statement, the General Disclosure
Package and the Prospectus, and each amendment or supplement thereto
made by the Company prior to the Closing Date, and
‘‘conferences with certain officers and employees of and
with auditors for and counsel to the Company,’’ such
counsel has no reason to believe that (I) the Registration Statement or
any amendment thereto, at the Applicable Time as of the date of this
Agreement, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that the
Prospectus or any amendment or supplement thereto, at the respective
date thereof or at the Closing Date, contained or contains any untrue
statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the documents
included in the General Disclosure Package, all considered together, as
of the Applicable Time, contained or contains any untrue statement of a
material fact or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, 

18

or (II) any document incorporated by
reference in the Prospectus or any further amendment or supplement to
any such incorporated document made by the Company prior to the Closing
Date, when they became effective or were filed with the Commission, as
the case may be, contained, in the case of a registration statement
which became effective under the Securities Act, any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Exchange Act with the Commission, any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; it being understood that such
counsel need express no opinion as to (I) the financial statements or
other financial data, (II) matters relating to Intellectual Property,
or (III) matters relating to Xcyte Therapies, Inc., contained, or
incorporated by reference, in the Registration Statement, the General
Disclosure Package, or the Prospectus, or an incorporated document. The
foregoing statement may be qualified by a statement to the effect that
such counsel has not independently verified the accuracy, completeness
or fairness of the statements contained in the Registration Statement,
the General Disclosure Package or the Prospectus and takes no
responsibility therefor except to the extent set forth in the opinion
described above.

(e)    D Young & Co
shall have furnished to the Placement Agents, such counsel’s
written opinion, as intellectual property counsel to the Company,
addressed to the Placement Agents dated the Closing Date, in the form
attached hereto as Exhibit
E.

(f)    Lahive & Cockfield, LLP
shall have furnished to the Placement Agents, such counsel’s
written opinion, as intellectual property counsel to the Company,
addressed to the Placement Agents dated the Closing Date, in the form
attached hereto as Exhibit
F.

(g)    The Placement Agents shall
have received from Thelen Reid Brown Raysman & Steiner LLP, counsel
for the Placement Agents, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Representative may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for enabling them to pass upon such
matters.

(h)    At the time of the execution
of this Agreement, the Placement Agents shall have received from Ernst
& Young LLP, a letter, addressed to the Placement Agents, executed
and dated such date, in form and substance satisfactory to the
Representative (i) confirming that they are an independent registered
accounting firm with respect to the Company and any Subsidiary within
the meaning of the Securities Act and the Rules and Regulations and
PCAOB and (ii)  stating the conclusions and findings of such
firm, of the type ordinarily included in accountants’
‘‘comfort letters’’ to underwriters, with
respect to the financial statements and certain financial information
contained or incorporated by reference in the Registration Statement,
the General Disclosure Package and the
Prospectus.

(i)    On the effective date of
any post-effective amendment to any Registration Statement and on the
Closing Date, the Placement Agents shall have received a letter (the
‘‘Bring-Down Letter’’) from
Ernst & Young LLP addressed to the Placement Agents and dated the
Closing Date confirming, as of the date of the Bring-Down Letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the General Disclosure Package and the Prospectus, as the case may
be, as of a date not more than three (3) business days prior to the
date of the Bring-Down Letter), the conclusions and findings of such
firm, of the type ordinarily included in accountants’
‘‘comfort letters’’ to underwriters, with
respect to the financial information and other matters covered by its
letter delivered to the Placement Agents concurrently with the
execution of this Agreement pursuant to paragraph (h) of this
Section 7.

(j)    The Company shall
have furnished to the Placement Agents a certificate, dated the Closing
Date, of its Chairman of the Board, its President or a Vice President
and its chief financial officer stating that (i) such officers have
carefully examined the Registration Statement, the General Disclosure
Package, any Permitted Free Writing Prospectus and the Prospectus and,

19

in their opinion, the Registration Statement
and each amendment thereto, at the Applicable Time and as of the date
of this Agreement and as of the Closing Date did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the General Disclosure Package, as of the
Applicable Time and as of the Closing Date, any Permitted Free Writing
Prospectus as of its date and as of the Closing Date, the Prospectus
and each amendment or supplement thereto, as of the respective date
thereof and as of the Closing Date, did not include any untrue
statement of a material fact and did not omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading, (ii) since the
effective date of the Initial Registration Statement, no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement, the General Disclosure Package or the
Prospectus, (iii) to the best of their knowledge after reasonable
investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, and (iv) there has not been, subsequent to
the date of the most recent audited financial statements included or
incorporated by reference in the General Disclosure Package, any
material adverse change in the financial position or results of
operations of the Company or any Subsidiary, or any change or
development that, singularly or in the aggregate, would involve a
material adverse change or a prospective material adverse change, in or
affecting the condition (financial or otherwise), results of
operations, business, assets or prospects of the Company or any
Subsidiary, except as set forth in the
Prospectus.

(k)    The Company shall have
furnished to the Placement Agent a certificate, of its Chairman of the
Board, it President, or a Vice President or its Chief Financial
Officer, relating to certain financial information contained in the
Xcyte Therapies, Inc.’s Form 10-K for the fiscal year ended
December  31,  2005.

(l)    Since the date of the latest audited
financial statements included in the General Disclosure Package or
incorporated by reference in the General Disclosure Package as of the
date hereof, (i) neither the Company nor any Subsidiary shall have
sustained any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth in the General Disclosure
Package, and (ii) there shall not have been any change in the capital
stock or long-term debt of the Company or any Subsidiary, or any
change, or any development involving a prospective change, in or
affecting the business, general affairs, management, financial
position, stockholders’ equity or results of operations of the
Company, otherwise than as set forth in the General Disclosure Package,
the effect of which, in any such case described in clause (i) or (ii)
of this paragraph (l), is, in the judgment of the
Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Units on the
terms and in the manner contemplated in the General Disclosure
Package.

(m)    No action shall have been
taken and no law, statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which
would prevent the issuance or sale of the Units or materially and
adversely affect or potentially materially and adversely affect the
business or operations of the Company or any Subsidiary; and no
injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued
which would prevent the issuance or sale of the Units or materially and
adversely affect or potentially materially and adversely affect the
business or operations of the Company or any
Subsidiary.

(n)    Subsequent to the
execution and delivery of this Agreement there shall not have occurred
any of the following: (i) trading in securities generally on the New
York Stock Exchange, Nasdaq GM or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on
any exchange or in the over-the-counter market, shall have been
suspended or materially limited, or minimum or maximum prices or
maximum range 

20

for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or
market or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities or a material disruption has occurred in
commercial banking or securities settlement or clearance services in
the United States, (iii) the United States shall have become engaged in
hostilities, or the subject of an act of terrorism, or there shall have
been an outbreak of or escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency
or war by the United States or (iv) there shall have occurred such a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the
judgment of the Representative, impracticable or inadvisable to proceed
with the sale or delivery of the Units on the terms and in the manner
contemplated in the General Disclosure Package and the
Prospectus.

(o)    The Nasdaq GM shall have
approved the Common Stock for inclusion therein, subject only to
official notice of issuance.

(p)    The
Placement Agents shall have received the written agreements,
substantially in the form of Exhibit C hereto, of the
executive officers, directors, shareholders, optionholders and
warrantholders of the Company listed in Schedule B to this
Agreement.

(q)    The Company shall have
entered into Subscription Agreements with each of the Purchasers and
such agreements shall be in full force and
effect.

(r)    The Company shall have entered
into the Escrow Agreement and such agreement shall be in full force and
effect.

(s)    The Placement Agents shall
have received clearance from the NASD as to the amount of compensation
allowable or payable to the Placement Agents as described in the
Pricing Prospectus.

(t)    Prior to the
Closing Date, the Company shall have furnished to the Placement Agents
such further information, opinions, certificates, letters or documents
as the Representative shall have reasonably requested.

All
opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Placement
Agents.

8.    INDEMNIFICATION AND
CONTRIBUTION.

(a)    The
Company shall indemnify and hold harmless each Placement Agent, its
affiliates and each of its and their respective directors, officers,
members, employees, representatives and agents (including, without
limitation Lazard Frères & Co. LLC, (which will provide
services to LCM) and its affiliates, and each of its and their
respective directors, officers, members, employees, representatives and
agents and each person, if any, who controls Lazard Frères &
Co. LLC within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and each person, if any, who
controls any Placement Agent within the meaning of Section 15 of
the Securities Act of or Section 20 of the Exchange Act
(collectively the ‘‘Placement Agent Indemnified
Parties,’’ and each a
‘‘Placement Agent Indemnified
Party’’) against any loss, claim, damage, expense
or liability whatsoever (or any action, investigation or proceeding in
respect thereof), joint or several, to which such Placement Agent
Indemnified Party may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, expense, liability,
action, investigation or proceeding arises out of or is based upon (A)
any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any ‘‘issuer information’’
filed or required to be filed pursuant to Rule 433(d) of the Rules and
Regulations, any Registration Statement or the Prospectus, or in any
amendment or supplement thereto or document incorporated by reference
therein, (B) the omission or alleged omission to state in any
Preliminary Prospectus, any Issuer Free Writing 

21

Prospectus, any ‘‘issuer
information’’ filed or required to be filed pursuant to
Rule 433(d) of the Rules and Regulations, any Registration Statement or
the Prospectus, or in any amendment or supplement thereto or document
incorporated by reference therein, a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or (C) any breach of the representations and warranties of
the Company contained herein or failure of the Company to perform its
obligations hereunder or pursuant to any law, any act or failure to
act, or any alleged act or failure to act, by the Placement Agent in
connection with, or relating in any manner to, the Units, the Escrow
Agreement or the Offering, and which is included as part of or referred
to in any loss, claim, damage, expense, liability, action,
investigation or proceeding arising out of or based upon matters
covered by subclause (A), (B) or (C) above of this Section
8(a) (provided that the Company shall not be liable in the
case of any matter covered by this subclause (C) to the extent that it
is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, expense or liability resulted directly
from any such act or failure to act undertaken or omitted to be taken
by such Placement Agent through its gross negligence or willful
misconduct), and shall reimburse the Placement Agent Indemnified Party
promptly upon demand for any legal fees or other expenses reasonably
incurred by that Placement Agent Indemnified Party in connection with
investigating, or preparing to defend, or defending against, or
appearing as a third party witness in respect of, or otherwise incurred
in connection with, any such loss, claim, damage, expense, liability,
action, investigation or proceeding, as such fees and expenses are
incurred; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim,
damage, expense or liability arises out of or is based upon an untrue
statement or alleged untrue statement in, or omission or alleged
omission from any Preliminary Prospectus, any Registration Statement or
the Prospectus, or any such amendment or supplement thereto, or any
Issuer Free Writing Prospectus made in reliance upon and in conformity
with written information furnished to the Company by the Representative
by or on behalf of any Placement Agent specifically for use therein,
which information the parties hereto agree is limited to the Placement
Agents’ Information (as defined in Section 18). This
indemnity agreement is not exclusive and will be in addition to any
liability, which the Company might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in
equity to each Placement Agent Indemnified
Party.

(b)    Each Placement Agent, severally
and not jointly, shall indemnify and hold harmless the Company and its
directors, its officers 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
(collectively the ‘‘Company Indemnified
Parties’’ and each a
‘‘Company Indemnified
Party’’) against any loss, claim, damage, expense
or liability whatsoever (or any action, investigation or proceeding in
respect thereof), joint or several, to which such Company Indemnified
Party may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, expense, liability, action,
investigation or proceeding arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any ‘‘issuer information’’
filed or required to be filed pursuant to Rule 433(d) of the Rules and
Regulations, any Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, any Issuer Free
Writing Prospectus, any ‘‘issuer
information’’ filed or required to be filed pursuant to
Rule 433(d) of the Rules and Regulations, any Registration Statement or
the Prospectus, or in any amendment or supplement thereto, a material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by the Representative by or on
behalf of any Placement Agent specifically for use therein, which
information the parties hereto agree is limited to the Placement
Agents’ Information as defined in Section 18, and shall
reimburse the Company for any legal or other expenses reasonably
incurred by such party in connection with investigating or preparing to
defend or defending against or appearing as third party witness in
connection with any such loss, claim, damage, liability, action,
investigation or proceeding, as such fees and 

22

expenses are incurred. Notwithstanding the
provisions of this Section 8(b), in no event shall any
indemnity by any Placement Agent under this Section 8(b)
exceed the total compensation received by such Placement Agent in
accordance with Section 2.5.

(c)    Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of
any action, the indemnified party shall, if a claim in respect thereof
is to be made against an indemnifying party under this Section
8, notify such indemnifying party in writing of the commencement
of that action; provided, however, that the failure to notify
the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been
materially prejudiced by such failure; and, provided, further,
that the failure to notify an indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise
than under this Section 8. If any such action shall be brought
against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense of such
action with counsel reasonably satisfactory to the indemnified party
(which counsel shall not, except with the written consent of the
indemnified party, be counsel to the indemnifying party). After notice
from the indemnifying party to the indemnified party of its election to
assume the defense of such action, except as provided herein, the
indemnifying party shall not be liable to the indemnified party under
Section 8 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense of
such action other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense
of such action but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be at the expense of such
indemnified party unless (i) the employment thereof has been
specifically authorized in writing by the Company in the case of a
claim for indemnification under Section 8(a) or Section
2.6 or the Placement Agents in the case of a claim for
indemnification under Section 8(b), (ii) such indemnified
party shall have been advised by its counsel that there may be one or
more legal defenses available to it which are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party within
a reasonable period of time after notice of the commencement of the
action or the indemnifying party does not diligently defend the action
after assumption of the defense, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
(or, in the case of a failure to diligently defend the action after
assumption of the defense, to continue to defend) such action on behalf
of such indemnified party and the indemnifying party shall be
responsible for legal or other expenses subsequently incurred by such
indemnified party in connection with the defense of such action;
provided, however, that the indemnifying party shall not,
in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties (in addition to any local
counsel), which firm shall be designated in writing by the
Representative if the indemnified parties under this Section 8
consist of any Placement Agent Indemnified Party or by the Company if
the indemnified parties under this Section 8 consist of any
Company Indemnified Parties. Subject to this Section 8(c), the
amount payable by an indemnifying party under Section 8 shall
include, but not be limited to, (x) reasonable legal fees and expenses
of counsel to the indemnified party and any other expenses in
investigating, or preparing to defend or defending against, or
appearing as a third party witness in respect of, or otherwise incurred
in connection with, any action, investigation, proceeding or claim, and
(y) all amounts paid in settlement of any of the foregoing. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of
judgment with respect to any pending or threatened action or any claim
whatsoever, in respect of which indemnification or contribution could
be sought under this Section 8 (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or 

23

consent (i) includes an unconditional
release of each indemnified party in form and substance reasonably
satisfactory to such indemnified party from all liability arising out
of such action or claim and (ii) 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. Subject to the provisions of the following
sentence, no indemnifying party shall be liable for settlement of any
pending or threatened action or any claim whatsoever that is effected
without its written consent (which consent shall not be unreasonably
withheld or delayed), but if settled with its written consent, if its
consent has been unreasonably withheld or delayed or if there be a
judgment for the plaintiff in any such matter, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
In addition, if at any time an indemnified party shall have requested
that an indemnifying party reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated herein effected
without its written consent if (i) such settlement is entered into more
than forty-five (45) days after receipt by such indemnifying party of
the request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least thirty (30)
days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

(d)    If the indemnification provided for in
this Section 8 is unavailable or insufficient to hold harmless
an indemnified party under Section 8(a) or Section
8(b), then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid, payable or
otherwise incurred by such indemnified party as a result of such loss,
claim, damage, expense or liability (or any action, investigation or
proceeding in respect thereof), as incurred, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company on the one hand and the Placement Agents on the other hand from
the offering of the Units, or (ii) if the allocation provided by clause
(i) of this Section 8(d) is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i)  of this Section 8(d)
but also the relative fault of the Company on the one hand and the
Placement Agents on the other with respect to the statements,
omissions, acts or failures to act which resulted in such loss, claim,
damage, expense or liability (or any action, investigation or
proceeding in respect thereof) as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Placement Agents on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Units purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Placement Agent in connection
with the Offering, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company on the one
hand and the Placement Agents on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on
the one hand or the Placement Agents on the other, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement, omission, act
or failure to act; provided that the parties hereto agree that
the written information furnished to the Company by the Representative
by or on behalf of any Placement Agent for use in any Preliminary
Prospectus, any Registration Statement or the Prospectus, or in any
amendment or supplement thereto, consists solely of the Placement
Agents’ Information as defined in Section 18. The
Company and the Placement Agents agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) 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, damage, expense, liability, action,
investigation or proceeding referred to above in this Section
8(d) shall be deemed to include, for purposes of this Section
8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, preparing to defend
or defending against or appearing as a third party witness in respect
of, or otherwise incurred in connection with, any 

24

such loss, claim, damage, expense,
liability, action, investigation or proceeding. Notwithstanding the
provisions of this Section 8(d), no Placement Agent shall be
required to contribute any amount in excess of the total compensation
received by such Placement Agent in accordance with Section
2.5 less the amount of any damages which such Placement Agent has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement, omission or alleged omission, act or alleged
act or failure to act or alleged failure to act. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Placement
Agents’ obligations to contribute as provided in this Section
8(d) are several in proportion to their respective placement
obligations and not joint.

9.    TERMINATION.    The obligations of
the Placement Agents and the Purchasers hereunder and under the
Subscription Agreements may be terminated by the Representative, in its
absolute discretion by notice given to the Company prior to delivery of
and payment for the Units if, prior to that time, any of the events
described in Sections 7(l), Section 7(m) or 7(n) have
occurred or if the Purchasers shall decline to purchase the Units for
any reason permitted under this Agreement or the Subscription
Agreements.

10.    REIMBURSEMENT OF PLACEMENT
AGENTS’ EXPENSES.    Notwithstanding anything to
the contrary in this Agreement, if (a) this Agreement shall have been
terminated pursuant to Section 9, (b) the Company shall fail
to tender the Units for delivery to the Purchasers for any reason not
permitted under this Agreement, (c) the Purchasers shall decline to
purchase the Units for any reason permitted under this Agreement or (d)
the sale of the Units is not consummated because any condition to the
obligations of the Purchasers or the Placement Agents set forth herein
is not satisfied or because of the refusal, inability or failure on the
part of the Company to perform any agreement herein or to satisfy any
condition or to comply with the provisions hereof, then in addition to
the payment of amounts in accordance with Section 6, the
Company shall reimburse the Placement Agents for the reasonable
documented fees and expenses of the Placement Agents’ counsel
and for such other out-of-pocket expenses as shall have been reasonably
incurred by them in connection with this Agreement and the proposed
purchase of the Units, and upon demand the Company shall pay the full
amount thereof to the Placement
Agents.

11.    AUTHORITY OF THE REPRESENTATIVE.
    Each of Needham and ThinkEquity consents and agrees that
LCM will act as Representative of the Placement Agents under this
Agreement and with respect to the sale of the Units. Accordingly, each
of Needham and ThinkEquity authorizes LCM to manage the Offering and
the sale of the Units and to take such action in connection therewith
as LCM in its sole discretion deems appropriate or desirable,
consistent with the provisions of each Agreement Among Underwriters
previously entered into between LCM and Needham, and LCM and
ThinkEquity, respectively, taking into account that the Offering of the
Units will be in the form of a best efforts placement and not a firm
commitment underwriting. Each of Needham and ThinkEquity agrees to
comply with such Agreement Among Underwriters and that any action taken
under this Agreement by the Representative shall be binding upon all of
the Placement Agents.

12.    ABSENCE OF FIDUCIARY
RELATIONSHIP.    The Company acknowledges and agrees
that:

(a)    the Placement Agents’
responsibility to the Company is solely contractual in nature, the
Placement Agents have been retained solely to act as placement agents
in connection with the Offering and no fiduciary, advisory or agency
relationship between the Company and the Placement Agents has been
created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Placement Agents or Lazard
Frères & Co. LLC has advised or is advising the Company on
other matters;

(b)    he price of the Units
set forth in this Agreement was established by the Company following
discussions and arms-length negotiations with the Placement Agents, and
the Company is capable of evaluating and understanding, and understands
and accepts, the terms, risks and conditions of the transactions
contemplated by this Agreement;

(c)    it
has been advised that the Placement Agents and Lazard Frères
& Co. LLC and their affiliates are engaged in a broad range of
transactions which may involve interests that differ from 

25

those of the Company and that the Placement
Agents have no obligation to disclose such interests and transactions
to the Company by virtue of any fiduciary, advisory or agency
relationship; and

(d)    it waives, to the
fullest extent permitted by law, any claims it may have against the
Placement Agents for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that the Placement Agents shall have no
liability (whether direct or indirect) to the Company in respect of
such a fiduciary duty claim or to any person asserting a fiduciary duty
claim on behalf of or in right of the Company, including stockholders,
employees or creditors of the
Company.

13.    SUCCESSORS; PERSONS ENTITLED TO
BENEFIT OF AGREEMENT.    This Agreement shall inure to
the benefit of and be binding upon the Placement Agents, the Company,
and their respective successors and assigns. This Agreement shall also
inure to the benefit of Lazard Frères & Co. LLC, the
Purchasers, and each of their respective successors and assigns, which
shall be third party beneficiaries hereof. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give
any person, other than the persons mentioned in the preceding
sentences, any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be
and being for the sole and exclusive benefit of such persons and for
the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company
contained in this Agreement shall also be for the benefit of the
Placement Agent Indemnified Parties and the indemnities of the several
Placement Agents shall be for the benefit of the Company Indemnified
Parties. It is understood that the Placement Agents’
responsibility to the Company is solely contractual in nature and the
Placement Agents do not owe the Company, or any other party, any
fiduciary duty as a result of this
Agreement.

14.    SURVIVAL OF INDEMNITIES,
REPRESENTATIONS, WARRANTIES, ETC.    The
respective indemnities, covenants, agreements, representations,
warranties and other statements of the Company and the Placement
Agents, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Placement
Agents, the Company, the Purchasers or any person controlling any of
them and shall survive delivery of and payment for the Units.
Notwithstanding any termination of this Agreement, including without
limitation any termination pursuant to Sections 9 or
10, the indemnity and contribution agreements contained in
Section 8 and the covenants, representations, warranties set
forth in this Agreement shall not terminate and shall remain in full
force and effect at all
times.

15.    NOTICES.    All
statements, requests, notices and agreements hereunder shall be in
writing, and:

(a)    if to the Placement
Agents, shall be delivered or sent by mail, telex, facsimile
transmission or overnight courier to Lazard Capital Markets LLC,
Attention: General Counsel, Fax: 212-830-3615;
and

(b)    if to the Company, shall be
delivered or sent by mail, telex, facsimile transmission or overnight
courier to Cyclacel Pharmaceuticals, Inc., Attention:
President and Chief Executive Officer, Fax:
866-271-3466.

provided, however, that any notice to
a Placement Agent pursuant to Section 8 shall be delivered or
sent by mail, telex or facsimile transmission to such Placement Agent
at its address set forth in its acceptance telex to the Placement
Agents, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof, except
that any such statement, request, notice or agreement delivered or sent
by email shall take effect at the time of confirmation of receipt
thereof by the recipient thereof.

16.    DEFINITION
OF CERTAIN TERMS.    For purposes of this Agreement,
‘‘business day’’ means any day on which the
New York Stock Exchange, Inc. is open for
trading.

17.    GOVERNING LAW, AGENT FOR SERVICE AND
JURISDICTION.    This Agreement shall be governed by
and construed in accordance with the laws of the State of New York,
including without 

26

limitation Section 5-1401 of the New York
General Obligations Law. No legal proceeding may be commenced,
prosecuted or continued in any court other than the courts of the State
of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters,
and the Company and the Placement Agents each hereby consent to the
jurisdiction of such courts and personal service with respect thereto.
The Company and the Placement Agents each hereby consent to personal
jurisdiction, service and venue in any court in which any legal
proceeding arising out of or in any way relating to this Agreement is
brought by any third party against the Company or the Placement Agents.
The Company and the Placement Agents each hereby waive all right to
trial by jury in any legal proceeding (whether based upon contract,
tort or otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such legal
proceeding brought in any such court shall be conclusive and binding
upon the Company and the Placement Agents and may be enforced in any
other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.

18.    PLACEMENT
AGENTS’ INFORMATION.    The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the
Placement Agents’ Information consists solely of the following
information in the Prospectus: (i) the last paragraph on the front
cover page concerning the terms of the offering by the Placement
Agents; and (ii) the statements concerning the Placement Agents
contained in the first paragraph under the heading ‘‘Plan
of Distribution.’’

19.    PARTIAL
UNENFORCEABILITY.    The invalidity or unenforceability
of any section, paragraph, clause or provision of this Agreement shall
not affect the validity or enforceability of any other section,
paragraph, clause or provision hereof. If any section, paragraph,
clause or provision of this Agreement is for any reason determined to
be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it
valid and
enforceable.

20.    GENERAL.    This
Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. In this Agreement, the masculine,
feminine and neuter genders and the singular and the plural include one
another. The section headings in this Agreement are for the convenience
of the parties only and will not affect the construction or
interpretation of this Agreement. This Agreement may be amended or
modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Placement
Agents.

21.    COUNTERPARTS.    This
Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument and such signatures may be
delivered by facsimile.

27

If the foregoing is in accordance with
your understanding of the agreement between the Company and the
Placement Agents, kindly indicate your acceptance in the space provided
for that purpose below.

		Very truly
yours,
    

CYCLACEL PHARMACEUTICALS,
INC.

    
    
By:                                            

          Name:   

          Title:   

LAZARD CAPITAL
MARKETS LLC

By:
                                    

Name:   

NEEDHAM
& COMPANY, LLC

By:
                                        

Name:
 Title:

THINKEQUITY PARTNERS
LLC

By:
                                    

Name:   
Title:   

28

SCHEDULE
A

General Use Free Writing
Prospectuses

Final Pricing Terms, dated February
12,  2007

29

SCHEDULE B

Spiro
Rombotis
Paul McBarron
Sir John Banham
 Dr.
Christopher  Henney
 Dr.  Gordon
McVie
Daniel Spiegelman
Dr.  David
U’Prichard    

30

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