Exhibit 1.1
UNDERWRITING AGREEMENT
Between
AYTU BIOSCIENCE, INC.
and
XXXXXX XXXXXX & CO., LLC
as Representative of the Several Underwriters
AYTU BIOSCIENCE, INC.
UNDERWRITING AGREEMENT
New York, New York
[•], 2016
Xxxxxx Xxxxxx & Co., LLC
As Representative of the several Underwriters named on Schedule
1 attached hereto
00 Xxxxx Xxxxxx, 00xx Xx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned, Aytu BioScience,
Inc., a corporation formed under the laws of the State of Delaware (collectively with its subsidiaries and affiliates, including,
without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries
or affiliates of Aytu BioScience, Inc., the “Company”), hereby confirms its agreement (this “Agreement”)
with Xxxxxx Xxxxxx & Co., LLC. (hereinafter referred to as “you” (including its correlatives) or the “Representative”)
and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the
Representative and such other underwriters being collectively called the “Underwriters” or, individually, an
“Underwriter”) as follows:
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an aggregate of [•] shares (“Firm Shares”) of the
Company’s common stock, par value $0.0001 per share (the “Common Stock”), together with Common Stock purchase
warrants to purchase up to an aggregate of [•] shares of Common Stock (each a “Firm Warrant” and collectively
the “Firm Warrants” and together with the Firm Shares, the “Firm Securities”). Each Firm Warrant shall
be exercisable for a period of [•] years at an exercise price of $[•] (the “Firm Warrant Exercise Price”),
subject to adjustment as provided in the agreement evidencing the Firm Warrant.
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares and Firm Warrants set forth
opposite their respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $[•] per
Firm Security ([93]% of the per Firm Security offering price). The Firm Securities are to be offered initially to the public at
the offering price set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof).
(i) Delivery
and payment for the Firm Securities shall be made at 10:00 a.m., Eastern time, on the third (3rd) Business Day following
the effective date (the “Effective Date”) of the Registration Statement (as defined in Section 2.1.1 below) (or the
fourth (4th) Business Day following the Effective Date if the Registration Statement is declared effective after 4:01
p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (“Representative
Counsel”), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by
the Representative and the Company. The hour and date of delivery and payment for the Firm Securities is called the “Closing
Date.”
(ii) Payment
for the Firm Securities shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of
the Company upon delivery of the certificates (in form and substance reasonably satisfactory to the Underwriters) representing
the Firm Shares and Firm Warrants (or through the facilities of the Depository Trust Company (“DTC”)) for the account
of the Underwriters. The Firm Securities shall be registered in such name or names and in such authorized denominations as the
Representative may request in writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated
to sell or deliver the Firm Securities except upon tender of payment by the Representative for all of the Firm Securities. The
term “Business Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions
are authorized or obligated by law to close in New York, New York.
1.2.1. Option
Securities. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Securities,
the Company hereby grants to the Underwriters an option (the “Over-allotment Option”) to purchase up to (a) [•]
additional shares of Common Stock (the “Option Shares”) at a purchase price of $[•] per one Option Share and/or
(b) up to [•] additional warrants (the “Option Warrants” and collectively with the Option Shares, the “Option
Securities”) at a purchase price of $[•] per Option Warrant , (the “Warrant Purchase Price”), which may
be purchased in any combination of Option Shares and/or Option Warrants. The Firm Securities and the Option Securities are hereinafter
referred to together as the “Public Securities.” The offering and sale of the Public Securities is hereinafter
referred to as the “Offering.”
1.2.2. Exercise
of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Option Securities within 45 days after the Effective Date. The Underwriters
shall not be under any obligation to purchase any Option Securities prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed
in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares and/or Option
Warrants to be purchased and the date and time for delivery of and payment for the Option Securities (the “Option Closing
Date”), which shall not be later than three (3) full Business Days after the date of the notice or such other time as shall
be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place (including
remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such
delivery and payment for the Option Securities does not occur on the Closing Date, the Option Closing Date will be as set forth
in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Securities, subject
to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of
Option Shares and/or Option Warrants specified in such notice and (ii) each of the Underwriters, acting severally and not jointly,
shall purchase that portion of the total number of Option Shares and/or Option Warrants then being purchased as set forth in Schedule
1 opposite the name of such Underwriter.
1.2.3. Payment
and Delivery. Payment for the Option Securities shall be made on the Option Closing Date by wire transfer in Federal (same
day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance reasonably satisfactory
to the Underwriters) representing the Option Securities (or through the facilities of DTC) for the account of the Underwriters.
The Option Securities shall be registered in such name or names and in such authorized denominations as the Representative may
request in writing at least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to
sell or deliver the Option Shares and/or Option Warrants except upon tender of payment by the Representative for the applicable
Option Shares and/or Option Warrants.
1.3.1. Purchase
Warrants. The Company hereby agrees to issue and sell to the Underwriters on the Closing Date an option (“Underwriter’s
Warrant”) for the purchase of an aggregate of [•] shares of Common Stock, representing 7% of the Firm Shares (excluding
the Option Shares), for an aggregate purchase price of $100.00. The Underwriter’s Warrant agreement, in the form attached
hereto as Exhibit A (the “Underwriter’s Warrant Agreement”), shall be exercisable, in whole or in
part, commencing on a date which is one (1) year after the Effective Date and expiring on the five-year anniversary of the Effective
Date at an initial exercise price per share of Common Stock of $[•], which is equal to 125% of the initial public offering
price of the Firm Shares. The Underwriter’s Warrant Agreement and the shares of Common Stock issuable upon exercise thereof
are hereinafter referred to together as the “Underwriter’s Securities.” The Representative understands and agrees
that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Underwriter’s Warrant Agreement
and the underlying shares of Common Stock and by its acceptance
thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Underwriter’s Warrant Agreement, or
any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the
effective economic disposition of such securities to
anyone other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner
of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up
restrictions.
1.3.2. Delivery.
Delivery of the Underwriter’s Warrant Agreement shall be made on the Closing Date and shall be issued in the name or names
and in such authorized denominations as the Underwriters may request.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined
below), as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1.1. Pursuant
to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. ), including any related prospectus
or prospectuses, for the registration of the Public Securities and the Underwriter’s Securities under the Securities Act
of 1933, as amended (the “Securities Act”), which registration statement and amendment or amendments have been prepared
by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations
of the Commission under the Securities Act (the “Securities Act Regulations”) and will contain all material statements
that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the
context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration
statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements,
schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a
part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “Rule
430A Information”)), is referred to herein as the “Registration Statement.” If the Company files any registration
statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration Statement”
shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been declared effective
by the Commission on the date hereof.
Each
prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information
that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary
Prospectus.” The Preliminary Prospectus, subject to completion, dated [•], 2016, that was included in the Registration
Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final prospectus
in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.” Any
reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus
included in the Registration Statement.
“Applicable
Time” means [TIME] [a.m./p.m.], Eastern time, on the date of this Agreement.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in
Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the Commission
by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether
or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i)
because it contains a description of the Public Securities or of the Offering that does not reflect the final terms, in each case
in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to
prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona
Fide Electronic Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
“Pricing Disclosure
Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus
and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant
to the Exchange Act. The Company has filed with the Commission a Form 8-A (File Number 000-53121) providing for the registration
pursuant to Section 12(g) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the shares
of Common Stock. The registration of the shares of Common Stock under the Exchange Act has been declared effective by the Commission
on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration
of the shares of Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating
terminating such registration.
2.2 Stock
Listing. The shares of Common Stock have been approved for quotation on the OTCQX Market operated by OTC Markets Group, Inc.
(the “Exchange”),
and the Company has taken no action designed to, or likely to have the effect of, removing the shares of Common Stock from quotation
on the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such quotation except
as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.3 No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any
order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) regarding the Registration Statement, any Preliminary Prospectus or the Prospectus from the Commission
for additional information.
(i) Each
of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including
the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto,
and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of
the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection
with this Offering and
the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits
or will 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.
(iii) The
Pricing Disclosure Package, as of the Applicable Time, as of the date of this Agreement, at the Closing Date or at any Option Closing
Date (if any), did not, does not and will not include an untrue statement of a material fact or 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; [and each
Issuer Limited Use Free Writing Prospectus hereto] does not conflict in any material respect with the information contained in
the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited
Use Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not
include 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 this representation and warranty
shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished
to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Pricing
Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the following disclosure contained in the “Underwriting”
section of the Prospectus: [the second paragraph, second sentence under the heading “Discounts”; the first paragraph
under the heading “Stabilization” and each paragraph under the heading “Offer restrictions outside of the United
States”] (the “Underwriters’ Information”); and
(iv) Neither
the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of
any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes
or will include an untrue statement of a material fact or omitted, omits or 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 this representation and warranty shall not apply to the Underwriters’ Information.
2.4.2. Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that
have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company
is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly
executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the
Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability
of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that
the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses
and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default
thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or
both, would constitute a default thereunder, except for any default or event which would not reasonably be expected to result in
a Material Adverse Change. To the Company’s knowledge, performance by the Company of the material provisions of such agreements
or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each,
a “Governmental Entity”), including, without limitation, those relating to environmental laws and regulations, except
for any default or event which would not reasonably be expected to result in a Material Adverse Change, except as may be disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.4.3. Prior
Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
2.4.4. Regulations.
The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the material effects
of federal, state, local and all foreign regulation material to the Company’s business as currently contemplated are correct
in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus which are not so disclosed; provided, however, the Company makes no representation with respect
to the disclosure in the Registration Statement set forth under the heading “Offer restrictions outside the United States”.
2.5.1. No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse
change in the financial position or results of operations of the Company, nor any change or development that, singularly or in
the aggregate, would involve a material adverse change, in or affecting the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material transactions
entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the
Company has resigned from any position with the Company, which would reasonably be expected to cause a Material Adverse Change.
2.5.2. Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities
or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or
made any other distribution on or in respect to its capital stock.
2.6 Independent
Accountants. To the knowledge of the Company, EKS&H LLLP (the “Auditor”), whose report is filed with the Commission
as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public accounting
firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. The
Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange
Act.
2.7 Financial
Statements, etc. The financial statements, including the notes thereto and supporting schedules included in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, fairly present the financial position and the results of operations
of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity
with U.S. generally accepted accounting principles (“GAAP”), consistently applied throughout the periods involved (provided
that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the
aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. Except as included therein, no historical or pro forma financial
statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the
Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related
notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled
and prepared in all material respects in accordance with the applicable requirements of the Securities Act and the Securities Act
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. All
disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation
G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may
have a material current or future effect on the Company’s financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, during the periods to which they apply (a) neither
the Company nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively,
the “Subsidiaries”), has incurred any material liabilities or obligations, direct or contingent, or entered into any
material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or
made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the capital stock of
the Company or any of its Subsidiaries, or, other than in the course of business, any grants under any stock compensation plan,
and (d) there has not been any material adverse change in the Company’s long-term or short-term debt.
2.8 Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date
the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the
Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any
Option Closing Date, there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized,
but unissued shares of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the
Company, or any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible
securities.
2.9.1. Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are fully paid and non-assessable; to the Company’s knowledge, the holders
thereof have no rights of rescission with respect thereto, and are not subject to personal liability solely by reason of being
such holders; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the
Company or similar contractual rights granted by the Company. The authorized shares of Common Stock conform in all material respects
to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
The offers and sales of the outstanding shares of Common Stock were at all relevant times either registered under the Securities
Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties
of the purchasers of such Shares, exempt from such registration requirements.
2.9.2. Securities
Sold Pursuant to this Agreement. The Public Securities and Underwriter’s Securities have been duly authorized for issuance
and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and
will not be subject to personal liability solely by reason of being such holders; the Public Securities and Underwriter’s
Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public
Securities and Underwriter’s Securities have been duly and validly taken. The Public Securities and Underwriter’s Securities
conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the Underwriter’s
Warrant Agreement has been duly and validly taken; the shares of Common Stock issuable upon exercise of the Underwriter’s
Warrant have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and when
paid for and issued in accordance with the Underwriter’s Warrant and the Underwriter’s Warrant Agreement, such shares
of Common Stock will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders; and such shares of Common Stock are not and will not be subject to the preemptive rights
of any holders of any security of the Company or similar contractual rights granted by the Company.
2.10 Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the
Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include
any such securities in a registration statement to be filed by the Company.
2.11 Validity
and Binding Effect of Agreements. This Agreement and the Underwriter’s Warrant Agreement have been duly and validly authorized
by the Company, and, when executed and delivered, will constitute, the valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification
or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
2.12 No
Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Underwriter’s Warrant Agreement
and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance
by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time
or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material
default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to the terms of any material agreement or instrument to which the Company is a party; (ii) result
in any violation of the provisions of the Company’s Certificate of Incorporation (as the same may be amended or restated
from time to time, the “Charter”) or the by-laws of the Company; or (iii) violate any existing applicable law,
rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof.
2.13 No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by
which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not in violation
of any term or provision of its Charter or by-laws, or in violation of any franchise, license, permit, applicable law, rule, regulation,
judgment or decree of any Governmental Entity material to the Company’s business.
2.14.1. Conduct
of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
has all requisite corporate power and authority, and has all materially necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct
its business purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.14.2. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained.
No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid
issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated by this
Agreement and the Underwriter’s Warrant Agreement and as contemplated by the Registration Statement, the Pricing Disclosure
Package and the Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations of
the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.15 D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
as supplemented by all information concerning the Company’s directors, officers and principal shareholders as described in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined
in Section 2.24 below), provided to the Underwriters, is true and correct in all material respects and the Company has not become
aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and
incorrect.
2.16 Litigation;
Governmental Proceedings. There is no material action, suit, proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus or in connection with the Company’s listing application for the listing of the Public Securities
on the Exchange.
2.17 Good
Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under the laws
of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to
qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.18 Insurance.
The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, including, but not limited to, directors and officers insurance coverage at least equal
to $5,000,000 and all such insurance is in full force and effect. The Company has no reason to believe that it 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 Change.
2.19.1. Finder’s
Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims,
payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee
by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements
or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.19.2. Payments
Within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any
direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Effective Date,
other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.19.3. Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.19.4. FINRA
Affiliation. There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, beneficial owner
of 5% or more of any class of the Company's securities or (iii) to the Company’s knowledge, beneficial owner of the Company's
unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration
Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance
with the rules and regulations of FINRA).
2.19.5. Information.
All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete
in all material respects.
2.20 Foreign
Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries,
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate
for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company
(or assist it in connection with any actual or proposed transaction) that (i) would subject the Company to any damage or penalty
in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, would reasonably be expected
to have had a Material Adverse Change or (iii) if not continued in the future, would reasonably be expected to adversely affect
the assets, business, operations or prospects of the Company. The Company has taken reasonable steps to ensure that its accounting
controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices
Act of 1977, as amended.
2.21 Compliance
with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”),
and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, 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.
2.22 Money
Laundering Laws. The operations of the Company and its Subsidiaries 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, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering
Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
2.23 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.24 Lock-Up
Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors and,
to the Company’s knowledge, each owner of at least 10% of the Company’s outstanding shares of Common Stock (or securities
convertible or exercisable into shares of Common Stock) (collectively, the “Lock-Up Parties”). The Company has caused
each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto as Exhibit
B (the “Lock-Up Agreement”), prior to the execution of this Agreement.
2.25 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization
or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the
conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect on
the assets, business or operations of the Company taken as a whole. The Company’s ownership and control of each Subsidiary
is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.26 Related
Party Transactions. There are no business relationships or related party transactions involving the Company or any other person
required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described
as required.
2.27 Board
of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing
Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members and
the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Xxxxxxxx-Xxxxx Act of 2002
and the rules promulgated thereunder (the “Xxxxxxxx-Xxxxx Act”) applicable to the Company.
2.28.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15
or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information
concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure documents.
2.28.2. Compliance.
The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Xxxxxxxx-Xxxxx
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions
of the Xxxxxxxx-Xxxxx Act.
2.29 Accounting
Controls. The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as
defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) to comply with the requirements of the Exchange Act
and have been designed by, or under the supervision of, their respective principal executive and principal financial officers,
or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls.
The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant
deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known
to the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’
ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s management,
whether or not material, that involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting.
2.30 No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.31 No
Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of
the Company, is imminent.
2.32 Intellectual
Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and similar rights (“Intellectual Property Rights”) necessary for the conduct of the business
of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary
for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus will
involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither
the Company nor any of its Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual
Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material
Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of
any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights,
and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in
the aggregate, together with any other claims in this Section 2.34, reasonably be expected to result in a Material Adverse Change;
(C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights
licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part,
and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably
be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property
Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate,
together with any other claims in this Section 2.34, reasonably be expected to result in a Material Adverse Change; and (E) to
the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect of any term
of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates
to such employee’s employment with the Company, or actions undertaken by the employee while employed with the Company and
could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s
knowledge, all material technical information developed by and belonging to the Company which is material to the Company’s
business and has not been patented has been kept confidential. The Company is not a party to or bound by any options, licenses
or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth
in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration
Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description of the matters
set forth in the preceding sentence. To the Company’s knowledge, none of the technology employed by the Company that is material
to the Company’s business has been obtained or is being used by the Company in violation of any contractual obligation binding
on the Company or, to the Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of
the rights of any persons.
2.33 Taxes.
Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time for the filing thereof unless the failure to file such returns
will not have a material adverse effect on the Company. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter
defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such
respective Subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the
Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including
the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no tax liabilities
have been asserted in writing (and are currently pending) by any taxing authority in connection with any of the returns or taxes
asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns
or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term “taxes” means
all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any
interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns” means all
returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
2.34 ERISA
Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established
or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material respects
with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations described
in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company is a member. No “reportable event” (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained
by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company
or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would reasonably be expected to have
any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates
has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification.
2.35 Compliance
with Laws. The Company: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable
to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion,
sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company (“Applicable
Laws”), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change;
(B) has not received any warning letter, untitled letter or other correspondence or notice from any other governmental authority
alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations,
permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (C) possesses
all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation of
any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any governmental authority or third party alleging that any product operation or
activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or
third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received
notice that any governmental authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations
and has no knowledge that any such governmental authority is considering such action; (F) has filed, obtained, maintained or submitted
all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required
by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented
by a subsequent submission); and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to
be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor”
letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect
or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice
or action.
2.36 Ineligible
Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness
of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities and at
the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account
of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible
issuer.
2.37 Real
Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
and its Subsidiaries have 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 its Subsidiaries taken as a whole, in each case
free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly 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 its Subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered
as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement,
the Pricing 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 such
Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease, which would reasonably
be expected to have a Material Adverse Change.
2.38 Contracts
Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of
its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that would reasonably be expected to materially
affect the Company’s or its Subsidiaries’ liquidity or the availability of or requirements for their capital resources
required to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus
which have not been described or incorporated by reference as required.
2.39 Loans
to Directors or Officers. 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 or its Subsidiaries to or for the benefit of any of the officers
or directors of the Company, its Subsidiaries or any of their respective family members, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus.
2.40 Smaller
Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act Regulations.
2.41 Industry
Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable
and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.44 Testing-the-Waters
Communications. The Company has not (i) alone engaged in any Testing-the-Waters Communications, other than Testing-the-Waters
Communications with the written consent of the Representative and with entities that are qualified institutional buyers within
the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501
under the Securities Act and (ii) [authorized anyone other than the Representative to engage in Testing-the-Waters Communications].
The Company confirms that the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters Communications.
The Company has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule 2-C hereto.
“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication
within the meaning of Rule 405 under the Securities Act.
2.45 Electronic
Road Show. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of the
Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities
Act Regulations) is required in connection with the Offering.
2.46 Margin
Securities. The Company owns no “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 Offering 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 would reasonably be expected
to cause any of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T,
U or X of the Federal Reserve Board.
3.1 Amendments
to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to
the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement
to which the Representative shall reasonably object in writing.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will
notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt
of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public
Securities and Underwriter’s Securities for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning
the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities
Act in connection with the Offering of the Public Securities and Underwriter’s Securities. The Company shall effect all filings
required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b)
(without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not,
it will promptly file such prospectus. The Company shall use its best efforts to prevent the issuance of any stop order, prevention
or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2. Continued
Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange
Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and
in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to
the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company,
to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
(ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or
the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to
a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus,
as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company
will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies
of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company
shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably
object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters
may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the
Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice of its
intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full or expiration
of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with copies of the related document(s)
a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which
the Representative or counsel for the Underwriters shall reasonably object.
3.2.3. Exchange
Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its best efforts
to maintain the registration of the shares of Common Stock under the Exchange Act. The Company shall not deregister the shares
of Common Stock under the Exchange Act without the prior written consent of the Representative other than in connection with a
merger or sale of the Company or similar business combination.
3.2.4. Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall
not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission
or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General
Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i)
that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such
free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto,
including timely filing with the Commission where required, legending and record keeping. 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 would conflict with the information contained in the Registration Statement or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the
Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
3.2.5. Testing-the-Waters
Communications. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or
occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an
untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company shall promptly notify
the Representative and shall promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to
eliminate or correct such untrue statement or omission.
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally
filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and
each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each
Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by
Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
3.5 Effectiveness
and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement
to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative
immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto;
(ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that
purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification
of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for
that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration
Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission;
and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company,
makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue
or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading,
or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend
such qualification at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.
3.6 Review
of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense, shall
cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial
statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7 Quotation.
The Company shall use its best efforts to maintain the quotation of the shares of Common Stock (including the Public Securities)
on the Exchange for at least three years from the date of this Agreement.
3.8 Financial
Public Relations Firm. As of the Effective Date, the Company shall have retained a financial public relations firm reasonably
acceptable to the Representative and the Company, which shall initially be Tiberend Strategic Advisors, which firm shall be experienced
in assisting issuers in initial public offerings of securities and in their relations with their security holders, and shall retain
such firm or another firm reasonably acceptable to the Representative for a period of not less than one (1) years after the Effective
Date.
| 3.9 | Reports
to the Representative. |
3.9.1. Periodic
Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available
to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time
furnishes generally to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each
periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations;
(ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released
by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration statement
filed by the Company under the Securities Act; and (v) such additional documents and information with respect to the Company and
the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request; provided
the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably
acceptable to the Representative and Representative Counsel in connection with the Representative’s receipt of such information.
Documents filed with the Commission pursuant to its XXXXX system or made available through the Company’s website shall be
deemed to have been delivered to the Representative pursuant to this Section 3.9.1.
3.9.2. Transfer
Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer
agent and registrar reasonably acceptable to the Representative (the “Transfer Agent”) and shall furnish to the
Representative at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative
may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Vstock Transfer
LLC is acceptable to the Representative to act as Transfer Agent for the shares of Common Stock.
3.9.3. Trading
Reports. During such time as the Public Securities are listed on the Exchange, the Company shall provide to the Representative,
at the Company’s expense, such reports published by Exchange relating to price trading of the Public Securities, as the Representative
shall reasonably request.
3.10.1. General
Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date,
if any, to the extent not paid at the Closing Date, all reasonable, necessary and accountable expenses incident to the performance
of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and expenses relating
to the registration of the shares of Common Stock to be sold in the Offering (including the Over-allotment Shares) with the Commission;
(b) all Public Filing System filing fees associated with the review of the Offering by FINRA; (c) all fees, expenses and disbursements
relating to background checks of the Company’s officers and directors in an amount not to exceed $5,000 per individual and
$15,000 in the aggregate; (d) all fees, expenses and disbursements relating to the registration or qualification of the Public
Securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably
designate (including, without limitation, all filing and registration fees; (e) all fees, expenses and disbursements relating to
the registration, qualification or exemption of the Public Securities under the securities laws of such foreign jurisdictions as
the Representative may reasonably designate; (f) the costs of all mailing and printing of the underwriting documents (including,
without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected
Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all
amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably
deem necessary; (g) the costs and expenses of a public relations firm; (h) the costs of preparing, printing and delivering certificates
representing the Public Securities; (i) fees and expenses of the transfer agent for the shares of Common Stock; (j) stock transfer
and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (k) the fees and expenses
of the Company’s accountants; (l) the fees and expenses of the Company’s legal counsel and other agents and representatives;
(m) fees and expenses of the Representative’s legal counsel not to exceed $75,000; (n) the $29,500 cost associated with the
Underwriter’s use of Ipreo’s book-building, prospectus tracking and compliance software for the Offering; and (o) up
to $20,000 of the Underwriters’ actual accountable “road show” expenses for the Offering. The Representative
may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any,
the expenses set forth herein to be paid by the Company to the Underwriters.
3.10.2. Non-accountable
Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date
it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense
allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Shares (excluding the
Option Shares), less the Advance (as such term is defined in Section 8.3 hereof), provided, however, that in the event that the
Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.
3.11 Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
3.12 Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an
earnings statement (which need not be certified by independent registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative)
has taken or shall take, directly or indirectly, any action designed to or that has constituted or that would reasonably be expected
to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Public Securities.
3.14 Internal
Controls. The Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary in order to permit preparation of financial statements in accordance 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.
3.15 Accountants.
As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable
to the Representative, and the Company shall continue to retain a nationally or regionally recognized independent registered public
accounting firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that
the Auditor is acceptable to the Representative.
3.16 FINRA.
For 180 days following the date of this Agreement, the Company shall advise the Representative (who shall make an appropriate filing
with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii) any beneficial owner of 5% or more
of any class of the Company's securities or (iii) any beneficial owner of the Company's unregistered equity securities which were
acquired during the 180 days immediately preceding the filing of the Registration Statement is or becomes an affiliate or associated
person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
3.17 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in
a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this Agreement.
3.18.1. Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, for a period of 90 days after the date of this Agreement (the “Lock-Up Period”),
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company;
(ii) file or caused to be filed any registration statement with the Commission relating to the offering by the Company of any shares
of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of
the Company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional
bank or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is
to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise.
The
restrictions contained in this Section 3.18.1 shall not apply to (i) the shares of Common Stock to be sold hereunder, (ii) the
issuance by the Company of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security
outstanding on the date hereof, of which the Representative has been advised in writing or (iii) the issuance by the Company of
stock options or shares of capital stock of the Company under any equity compensation plan of the Company, provided that in each
of (ii) and (iii) above, the underlying shares shall be restricted from sale during the entire Lock-Up Period.
Notwithstanding
the foregoing, if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or
a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning
on the last day of the Lock-Up Period, the restrictions imposed by this Section 3.18.1 shall continue to apply until the expiration
of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event,
as applicable, unless the Representative waives, in writing, such extension; provided, however, that this extension of the Lock-Up
Period shall not apply to the extent that FINRA has amended or repealed NASD Rule 2711(f)(4), or has otherwise provided written
interpretive guidance regarding such rule, in each case, so as to eliminate the prohibition of any broker, dealer, or member of
a national securities association from publishing or distributing any research report, with respect to the securities of an Emerging
Growth Company prior to or after the expiration of any agreement between the broker, dealer, or member of a national securities
association and the Emerging Growth Company or its shareholders that restricts or prohibits the sale of securities held by the
Emerging Growth Company or its shareholders after the initial public offering date.
3.18.2. Restriction
on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and
any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 12 months
after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer
to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.
3.19 Release
of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth
in the Lock-Up Agreements described in Section 2.24 hereof for an officer or director of the Company and provide the Company with
notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver,
the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C
hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20 Blue
Sky Qualifications. The Company shall use its reasonable best efforts, in cooperation with the Underwriters, if necessary,
to qualify the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to
complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise
so subject.
3.21 Reporting
Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations.
Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under
Rule 463 under the Securities Act Regulations.
3.22 Emerging
Growth Company Status. The Company shall promptly notify the Representative if the Company ceases to be an Emerging Growth
Company at any time prior to the later of (i) completion of the distribution of the Public Securities within the meaning of the
Securities Act and (ii) fifteen (15) days following the completion of the Lock-Up Period.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided
herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof
and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the
following conditions:
4.1.1. Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:00 p.m.,
Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at each
of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or,
to the Company’s knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the
Commission for additional information. The Prospectus containing the Rule 430A Information shall have been filed with the Commission
in the manner and within the time frame required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment
providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements
of Rule 430A.
4.1.2. FINRA
Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount
of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.2.1. Closing
Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion of Xxxxxx Xxxxxxx
Xxxxx & Xxxxxx, LLP, counsel to the Company, dated the Closing Date and addressed to the Representative, substantially in the
form of Exhibit D attached hereto.
4.2.2. Opinion
of Special Intellectual Property Counsel for the Company. On the Closing Date, the Representative shall have received the opinion
of Xxxxxxxx Xxxx P.C., special intellectual property counsel for the Company, dated the Closing Date, addressed to the Representative
substantially in the form of Exhibit E attached hereto.
4.2.3. Option
Closing Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable
opinions of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and
in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made
by such counsels in their respective opinions delivered on the Closing Date.
4.2.4. Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws
of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of
other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact,
to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Representative Counsel if requested.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter containing statements
and information of the type customarily included in accountants’ comfort letters with respect to the financial statements
and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed
to the Representative and in form and substance reasonably satisfactory to you and to the Auditor, dated as of the date of this
Agreement.
4.3.2. Bring-down
Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from
the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms
the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date
not more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.
4.4.1. Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing
Date (if such date is other than the Closing Date), of its Chief Executive Officer, its President and its Chief Financial Officer
stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free
Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable
Time and as of the Closing Date (or any Option Closing Date if such date is other than 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 Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option
Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing
Date (or any Option Closing Date if such date is other than 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 Registration Statement, no event has occurred which
is required to be set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus,
(iii) to their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other
than 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 (or any Option Closing Date if such date is other than 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 Pricing Disclosure Package,
any material adverse change in the financial position or results of operations of the Company, 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, except as set forth
in the Prospectus.
4.4.2. Secretary’s
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively,
certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full force and effect;
(ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and effect
and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel
and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate
shall be attached to such certificate.
4.5 No
Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have
been no material adverse change or development involving a prospective material adverse change in the condition or prospects or
the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in
the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law
or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or federal or state
commission, board or other administrative agency wherein an unfavorable decision, ruling or finding would reasonably be expected
to cause a materially adversely affect the business, operations, prospects or financial condition or income of the Company, except
as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have
been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and
(iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto
shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities
Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations,
and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto
shall 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, in light of the circumstances under which they were made, not misleading.
4.6.1. Lock-Up
Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the persons and entities listed in Schedule 3 hereto.
4.6.2. Underwriter’s
Warrant Agreement. On the Closing Date, the Company shall have delivered to the Representative executed copies of the Underwriter’s
Warrant Agreement.
4.7 Additional
Documents. At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with
such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the
Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities
and the Underwriter’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative
and Representative Counsel
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates and
each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates,
counsel, and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each an “Underwriter
Indemnified Party”), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited
to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and
the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them
may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws
of foreign countries (a “Claim”), (i) arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in (A) the Registration Statement, the Pricing Disclosure Package, any Preliminary Prospectus, the
Prospectus, or in any Issuer Free Writing Prospectus or in any Written Testing-the-Waters Communication (as from time to time each
may be amended and supplemented); (B) any materials or information provided to investors by, or with the approval of, the Company
in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors
by the Company (whether in person or electronically); or (C) any application or other document or written communication (in this
Section 5, collectively called “application”) executed by the Company or based upon written information furnished by
the Company in any jurisdiction in order to qualify the Public Securities and Underwriter’s Securities under the securities
laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities
exchange; or the omission or alleged omission therefrom of 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, unless such statement or omission
was made in reliance upon, and in conformity with, the Underwriters’ Information or (ii) otherwise arising in connection
with or allegedly in connection with the Offering. The Company also agrees that it will reimburse each Underwriter Indemnified
Party for all fees and expenses (including but not limited to any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action
between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any
third party, or otherwise) (collectively, the “Expenses”), and further agrees wherever and whenever possible to advance
payment of Expenses as they are incurred by an Underwriter Indemnified Party in investigating, preparing, pursuing or defending
any Claim.
5.1.2. Procedure.
If any action is brought against an Underwriter Indemnified Party in respect of which indemnity
may be sought against the Company pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company
in writing of the institution of such action and the Company shall assume the defense of such action, including the employment
and reasonable fees of counsel (subject to the reasonable approval of such Underwriter Indemnified Party) and payment of actual
and reasonable expenses if an Underwriter Indemnified Party requests that the Company do so. Such Underwriter Indemnified Party
shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Company, and shall be advanced by the Company. The Company shall not be liable for any settlement of any action
effected without its consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior
written consent of the Underwriters, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate
any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution may be sought
hereunder (whether or not such Underwriter Indemnified Party is a party thereto) unless such settlement, compromise, consent or
termination (i) includes an unconditional release of each Underwriter Indemnified Party, acceptable to such Underwriter Indemnified
Party, from all liabilities, expenses and claims arising out of such action for which indemnification or contribution may be sought
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 Underwriter
Indemnified Party.
5.2 Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement, its employees, representatives and agents and each person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability,
claim, damage and expense described in the foregoing indemnity from the Company to the several Underwriters, as incurred, but only
with respect to untrue or alleged untrue statements or omissions or alleged omissions made in the Registration Statement, any Preliminary
Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance
upon, and in strict conformity with, the Underwriters’ Information. In case any action shall be brought against the Company
or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package
or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against
any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other person
so indemnified shall have the rights and duties given to the Underwriter Indemnified Parties by the provisions of Section 5.1.2.
The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company
or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Public Securities or in connection with
the Registration Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus or any Written
Testing-the-Waters Communication.
5.3.1. Contribution
Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, from the Offering of the Public Securities, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect
to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters,
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 Public Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the
table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Common Stock purchased under this Agreement, as set forth in the table on the cover
page of the Prospectus or as otherwise disclosed in the Prospectus, on the other hand. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) 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 or liability, or action in respect thereof, referred to above in this Section 5.3.1 shall be deemed to
include, for purposes of this Section 5.3.1, any legal or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5.3.1 in no event shall
an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions
received by such Underwriter with respect to the Offering of the Public Securities exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
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.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify
the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be
liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party
seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution
without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended
to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise
available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3 are several and not joint.
6.1 Default
Not Exceeding 10% of Firm Shares or Option Shares. If any Underwriter or Underwriters shall default in its or their obligations
to purchase the Firm Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of the
Firm Shares or Option Shares with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm
Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Option Shares to which
the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Shares or Option Shares. In the event that the default addressed in Section 6.1 relates to more than
10% of the Firm Shares or Option Shares, you may in your discretion arrange for yourself or for another party or parties to purchase
such Firm Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1) Business Day
after such default relating to more than 10% of the Firm Shares or Option Shares, you do not arrange for the purchase of such Firm
Shares or Option Shares, then the Company shall be entitled to a further period of one (1) Business Day within which to procure
another party or parties satisfactory to you to purchase said Firm Shares or Option Shares on such terms. In the event that neither
you nor the Company arrange for the purchase of the Firm Shares or Option Shares to which a default relates as provided in this
Section 6, this Agreement will automatically be terminated by you or the Company without liability on the part of the Company (except
as provided in Sections 3.9 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however,
that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the Firm Shares; and provided,
further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to
the Company for damages occasioned by its default hereunder.
6.3 Postponement
of Closing Date. In the event that the Firm Shares or Option Shares to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the
right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business
Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package
or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration
Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made
necessary. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section
6 with like effect as if it had originally been a party to this Agreement with respect to such shares of Common Stock.
7.1 Board
Composition and Board Designations. The Company shall use reasonable best efforts to ensure that: (i) the qualifications
of the persons serving as members of the Board of Directors and the overall composition of the Board comply with the Xxxxxxxx-Xxxxx
Act, with the Exchange Act and with the listing rules of the Exchange or any other national securities exchange, as the case may
be, in the event the Company seeks to have its Public Securities listed on another exchange or quoted on an automated quotation
system, and (ii) if applicable, at least one member of the Audit Committee of the Board of Directors qualifies as an “audit
committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st)
Business Day following the forty-fifth (45th) day after the Closing Date, other than normal and customary releases issued
in the ordinary course of the Company’s business.
7.3 Right
of First Refusal. Until August 6, 2017, the Representative shall have
an irrevocable right of first refusal (the “Right of First Refusal”) to act as sole and exclusive investment banker, sole and exclusive book-runner, sole and exclusive financial advisor,
sole and exclusive underwriter and/or sole and exclusive placement agent, at the Representative’s sole and exclusive discretion,
for each and every future public and private equity and debt offering, including all equity linked financings (each, a “Subject
Transaction”), during such period, of the Company, or any successor to or subsidiary of the Company, on
terms and conditions customary to the Representative for such Subject Transactions. For the avoidance of any doubt, subject to
the terms hereto, during such period, the Company shall not retain, engage or solicit any additional investment
banker, book-runner, financial advisor, underwriter and/or placement agent in a Subject Transaction without the express written
consent of the Representative.
For a period of twelve
(12) months after the Closing Date, the Company shall notify the Representative of its intention to pursue a Subject Transaction,
including the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed
to the Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction
within ten (10) Business Days after the mailing of such written notice, then the Representative shall have no further claim or
right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise
its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative shall
not adversely affect the Representative’s Right of First Refusal with respect to any other Subject Transaction during the
twelve (12) month period agreed to above. If the Representative exercises its Right of First Refusal under this Section, it shall
diligently pursue the consummation of the Subject Transaction.
8.1 Effective
Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
8.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic
or international event or act or occurrence has materially disrupted, or in your reasonable opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or
the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any
other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an
increase in major hostilities which, in the Representative’s reasonable judgment, makes it impractical to proceed with the
Offering; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a moratorium
on foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if
the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable to proceed
with the delivery of the Firm Shares or Option Shares; or (vii) if the Company is in material breach of any of its representations,
warranties or covenants hereunder that has a material adverse effect on the Company’s business; or (viii) if the Representative
shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company,
or such adverse material change in general market conditions as in the Representative’s judgment would make it impracticable
to proceed with the offering, sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for
the sale of the Public Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein
or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees
and disbursements of Representative Counsel) up to $100,000 inclusive of the $50,000 advance for non-accountable expenses previously
paid by the Company to the Representative (the “Advance”) and upon demand the Company shall pay the full amount thereof
to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the indemnification
and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative will be
reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).
8.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and
shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part
hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be
deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
Xxxxxx Xxxxxx & Co., LLC
00 Xxxxx Xxxxxx, 00xx Xx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxx Xxxx, Head of Investment Banking/Underwritings
Fax No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
If to the Company:
Aytu Bioscience, Inc.
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Chief Executive
Officer
Fax No:
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
Fax No: (000) 000-0000
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms
and conditions of that certain engagement letter between the Company and Xxxxxx Xxxxxx & Co., LLC., dated December 23, 2015,
and the addendum thereto, dated as of September 6, 2016 shall remain in full force and effect.
9.5 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors
and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.6 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflict of laws principles thereof. Each of the Company and the Underwriters
hereby agree that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be
brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern
District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each of the Company
and the Underwriters hereby waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Any such process or summons to be served upon the Company or the Underwriters may be served by transmitting a copy thereof by registered
or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The
parties hereto agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all
of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the
preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
9.7 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission
shall constitute valid and sufficient delivery thereof.
9.8 Waiver,
etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof
or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance
or non-fulfillment.
[Signature Page Follows]
If
the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.
Confirmed as of the date first written above mentioned, on behalf
of itself and as Representative of the several Underwriters named on Schedule 1 hereto:
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XXXXXX XXXXXX & CO., LLC. |
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By: |
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Name: Xxxx Xxxx |
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Title: Head of Investment Banking/Underwritings |
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[Signature
Page]
[ISSUER] – Underwriting
Agreement
SCHEDULE 1
Underwriter | |
Total
Number of
Firm Shares | | |
Total
Number of
Firm
Warrants | | |
Total
Number of
Option
Shares | | |
Total
Number of
Option
Warrants | |
| |
| | |
| | |
| | |
| |
Xxxxxx Xxxxxx
& Co., LLC. | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Fordham Financial Management
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Feltl and Company | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
TOTAL | |
| | | |
| | | |
| | | |
| | |
SCHEDULE 2-A
Pricing Information
Number of Firm Shares: [•]
Number of Firm Warrants [•]
Number of Option Shares: [•]
Number of Option Warrants [•]
Purchase Price per Option Warrant [•]
Purchase Price per Option Share [•]
Public Offering Price per Firm Security [•]
Underwriting Discount per Firm Security: $[•]
Underwriting Non-accountable expense allowance per Firm Security:
$[•]
Proceeds to Company per Firm Security (before expenses): $[•]
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
[None.]
SCHEDULE 2-C
Written Testing-the-Waters Communications
[None.]
SCHEDULE 3
List of Lock-Up Parties
Name |
|
|
Position |
Xxxxxx X. Xxxxxxx |
|
|
Chief Executive Officer and Director |
Xxxxxxx X. Xxxxxxx |
|
|
Chief Operating Officer and Director |
Xxxxxxx X. Xxxxx |
|
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Chief Financial Officer, Secretary, and Treasurer |
Xxxxxxxx X. XxXxxxx |
|
|
Vice President of Sales |
Xxxxxxx Xxxxxxxx |
|
|
Director |
Xxxx
X. Xxxxxxx |
|
|
Director |
Xxxx
X. Xxxxxxxx, Xx. |
|
|
Director |
Xxxx
X. Xxxxxxxx |
|
|
Director |
Alpha
Venture Capital Partners, L.P. |
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5%+ Beneficial owner |
EXHIBIT A
Form of Underwriter’s Warrant Agreement
THE REGISTERED HOLDER OF
THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS
HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE
THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN
(I) AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF ANY SUCH
UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT IS
NOT EXERCISABLE PRIOR TO [________________] [DATE THAT IS ONE YEAR FROM THE EFFECTIVE DATE OF THE OFFERING]. VOID AFTER
5:00 P.M., EASTERN TIME, [___________________] [DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING].
COMMON STOCK PURCHASE WARRANT
For the Purchase of [_____] Shares of Common
Stock
of
AYTU BIOSCIENCE, INC
1. Purchase Warrant. THIS CERTIFIES
THAT, in consideration of funds duly paid by or on behalf of _________ (“Holder”), as registered owner of this
Purchase Warrant, to Aytu BioScience, Inc., a Delaware corporation (the “Company”), Holder is entitled, at any
time or from time to time from [________________] [DATE THAT IS ONE YEAR FROM THE EFFECTIVE DATE OF THE OFFERING] (the “Commencement
Date”), and at or before 5:00 p.m., Eastern time, [____________] [DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE
OF THE OFFERING] (the ”Expiration Date”), but not thereafter, to subscribe for, purchase and receive,
in whole or in part, up to [____] shares of common stock of the Company, par value $0.0001 per share (the “Shares”),
subject to adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized
by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with
the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate
this Purchase Warrant. This Purchase Warrant is initially exercisable at $[___] per Share [125% of the price of the Shares sold
in the Offering]; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof,
the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon
such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise
price or the adjusted exercise price, depending on the context.
2. Exercise.
2.1 Exercise Form.
In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in
cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official
bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration
Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease
and expire.
2.2 Cashless Exercise.
If at any time after the Commencement Date there is no effective registration statement registering, or no current prospectus available
for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment of cash or check payable
to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value
of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together
with the exercise form attached hereto, in which event the issue to Holder, Shares in accordance with the following formula:
X |
= |
Y(A-B) |
|
A |
|
Where, |
|
|
|
|
X |
= |
The number of Shares to be issued to Holder; |
|
Y |
= |
The number of Shares for which the Purchase Warrant is being exercised; |
|
A |
= |
The fair market value of one Share; and |
|
B |
= |
The Exercise Price. |
|
|
|
|
|
|
|
|
|
For purposes of this Section
2.2, the fair market value of a Share is defined as follows:
| (i) | if the Company’s common stock is traded on a securities exchange, the value shall be deemed
to be the closing price on such exchange prior to the exercise form being submitted in connection with the exercise of the Purchase
Warrant; or |
| (ii) | if the Company’s common stock is actively traded over-the-counter, the value shall be deemed
to be the closing bid prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; if there
is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s
Board of Directors. |
2.3 Legend.
Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities
have been registered under the Securities Act of 1933, as amended (the “Act”):
“The securities represented
by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or applicable
state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant
to an effective registration statement under the Securities Act, or pursuant to an exemption from registration under the Securities
Act and applicable state law which, in the opinion of counsel to the Company, is available.”
3.1 General Restrictions.
The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder will not: (a) sell,
transfer, assign, pledge or hypothecate this Purchase Warrant following the Effective
Date to anyone other than: (i) an underwriter or a selected dealer participating in the Offering, or (ii) a bona fide officer or
partner of any such underwriter or selected dealer, in each case in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause
this Purchase Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition of this Purchase Warrant or the securities hereunder, except
as provided for in FINRA Rule 5110(g)(2). After the Effective Date, transfers to others may be made subject
to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver
to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant and payment
of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Purchase
Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to
the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or
such portion of such number as shall be contemplated by any such assignment.
3.2 Restrictions
Imposed by the Securities Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until:
(i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption
from registration under the Securities Act and applicable state securities laws, the availability of which is established to the
reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP shall
be deemed satisfactory evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment
to the Registration Statement relating to the offer and sale of such securities has been filed by the Company and declared effective
by the U.S. Securities and Exchange Commission (the ”Commission”) and compliance with applicable state
securities law has been established.
4.1 Demand Registration.
4.1.1 Grant
of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the
Purchase Warrants and/or the underlying Shares (“Majority Holders”), agrees to register, on one occasion, all or any
portion of the Shares underlying the Purchase Warrants (collectively, the “Registrable Securities”). On such
occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within sixty
(60) days after receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective
promptly thereafter, subject to compliance with review by the Commission; provided, however, that the Company shall
not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder
is entitled to piggyback registration rights pursuant to Section 4.2 hereof and either: (i) the Holder has elected to participate
in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten primary
offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty
(30) days after such offering is consummated. The demand for registration may be made at any time during a period of four (4)
years beginning on the Commencement Date. The Company covenants and agrees to give written notice of its receipt of any Demand
Notice by any Holder(s) to all other registered Holders of the Purchase Warrants and/or the Registrable Securities within ten
(10) days after the date of the receipt of any such Demand Notice.
4.1.2 Terms. The
Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts
to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such
States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company be required
to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register
or license to do business in such State or submit to general service of process in such State, or (ii) the principal shareholders
of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration
statement filed pursuant to the demand right granted under Section 4.1.1 to remain effective for a period of at least twelve (12)
consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first
given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell
the shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if
the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding
the provisions of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one
(1) occasion and such demand registration right shall terminate on the fifth anniversary of the effectiveness of the registration
statement in accordance with FINRA Rule 5110(f)(2)(G)(iv).
| 4.2 | “Piggy-Back” Registration. |
4.2.1 Grant of Right.
In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right, for a period
of no more than two (2) years from the date of effectiveness of the registration statement in accordance with FINRA Rule 5110(f)(2)(G)(v),
to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection
with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form);
provided, however, that if, solely in connection with any primary underwritten public offering for the account of
the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares
of Common Stock which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing
or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to
include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder
requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made
pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought
to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities
in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.
4.2.2 Terms. The
Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.2.1 hereof,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company
shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to
the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration
statement filed by the Company during the two (2) year period following the Commencement Date until such time as all of the Registrable
Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back”
rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention
to file a registration statement. Except as otherwise provided in this Purchase Warrant, there shall be no limit on the number
of times the Holder may request registration under this Section 4.2.2; provided, however, that such registration
rights shall terminate on the [sixth] anniversary of the Commencement Date.
4.3.1 Indemnification.
The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder
and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a) of
the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or
liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise,
arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which
the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between the Underwriters
and the Company, dated as of [___________], 2016. The Holder(s) of the Registrable Securities to be sold pursuant to such registration
statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim,
damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act
or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for
specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section
5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
4.3.2 Exercise of
Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise their
Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
4.3.3 Documents Delivered
to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter
of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the
Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort”
letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering,
a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting
firm which has issued a report on the Company’s financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and,
in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten
public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting
the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between
the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff
with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance
notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties
and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent
and at such reasonable times as any such Holder shall reasonably request.
4.3.4 Underwriting
Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall be reasonably
satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder
and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other
terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to
any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that
any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be
made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended methods
of distribution.
4.3.5 Documents to
be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company
a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
4.3.6 Damages.
Should the registration or the effectiveness thereof required by Sections 4.1 and 4.2 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to
the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened
breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the
necessity of posting bond or other security.
5. New Purchase Warrants to be Issued.
5.1 Partial Exercise
or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or
in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation,
together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax
if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase
Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number
of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.
5.2 Lost Certificate.
Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant
and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant
of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction
shall constitute a substitute contractual obligation on the part of the Company.
6.1 Adjustments to
Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall
be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Share Dividends;
Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares
is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day
thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares, and
the Exercise Price shall be proportionately decreased.
6.1.2 Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares
is decreased by a reverse stock split, consolidation, combination or reclassification of Shares or other similar event, then, on
the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding
Shares, and the Exercise Price shall be proportionately increased.
6.1.3 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than
a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share
reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or
share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification
or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the
property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder
of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant)
to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization,
share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder
of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if
any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant
to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications,
reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.
6.1.4 Changes in Form
of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1,
and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in
the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase
Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the
Commencement Date or the computation thereof.
6.2 Substitute Purchase
Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into,
another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification
or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall
execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding
or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise
of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation
or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might
have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental
Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 6. The
above provision of this Section shall similarly apply to successive consolidations or share reconstructions or amalgamations.
6.3 Elimination of Fractional Interests.
The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant,
nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that
all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number
of Shares or other securities, properties or rights.
7. Reservation and Listing. The
Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise
of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor,
in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued,
fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees
that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable
upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any
shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to
cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national
securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued
to the public in the Offering may then be listed and/or quoted.
8.1 Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to
receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder
of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event
at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination
of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of
the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder
a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is
given to the shareholders.
8.2 Events Requiring
Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events:
(i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings,
as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer
to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable
for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation
or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale
of all or substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change
in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section
6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe
the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s
Chief Financial Officer.
8.4 Transmittal
of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall
be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered
Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company,
to following address or to such other address as the Company may designate by notice to the Holders:
If to the Holder:
Attn:
Fax No.:
with a copy (which shall not constitute notice) to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
If to the Company:
Aytu Bioscience, Inc.
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Chief Executive
Officer
Fax No:
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
Fax No: (000) 0000-0000
9.1 Amendments.
The Company and Xxxxxx Xxxxxx, as Representative of the Underwriters (the “Representative”), may from time to time
supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct
or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make
any other provisions in regard to matters or questions arising hereunder that the Company and the Representative may deem necessary
or desirable and that the Company and the Representative deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification
or amendment is sought.
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase Warrant.
9.3. Entire Agreement.
This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this
Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes
all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.4 Binding Effect.
This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted
assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein
contained.
9.5 Governing Law;
Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. Each of the Company and the
Holder hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant
shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each of the
Company and the holder hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company or the Holder may be served by transmitting a copy thereof by registered
or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the Company and the Holder in any action, proceeding
or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from
the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred
in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf
of its stockholders and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
9.6 Waiver, etc.
The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision
hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver
of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set
forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and
no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent
breach, non-compliance or non-fulfillment.
9.7 Execution in
Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.
9.8 Exchange Agreement.
As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to
the complete exercise of this Purchase Warrant by Holder, if the Company and the Representative enter into an agreement (“Exchange
Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash
or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this
Purchase Warrant to be signed by its duly authorized officer as of the ____ day of _______, 2016.
[Form to be used to exercise Purchase
Warrant]
Date: __________, 20___
The undersigned
hereby elects irrevocably to exercise the Purchase Warrant for ______ shares of common stock, par value $0.0001 per share (the
“Shares”), of Aytu BioScience, Inc., a Delaware corporation (the “Company”), and hereby makes
payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as
to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase
Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.
or
The undersigned
hereby elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares,
as determined in accordance with the following formula:
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Where, |
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The number of Shares to be issued to Holder; |
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The number of Shares for which the Purchase Warrant is being exercised; |
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The fair market value of one Share which is equal to $_____; and |
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The Exercise Price which is equal to $______ per share |
The undersigned
agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with
respect to the calculation shall be resolved by the Company in its sole discretion.
Please issue
the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a
new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.
Signature |
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Signature Guaranteed |
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INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name: |
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(Print in Block Letters) |
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Address: |
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NOTICE: The signature
to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership
on a registered national securities exchange.
[Form to be used to assign Purchase Warrant]
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED, __________________
does hereby sell, assign and transfer unto the right to purchase shares of common stock, par value $0.0001 per share, of Aytu BioScience,
Inc., a Delaware corporation (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the
Company to transfer such right on the books of the Company.
Dated: __________, 20__
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Signature Guaranteed |
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NOTICE: The signature to this
form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
EXHIBIT B
Form of Lock-Up Agreement
September [•],
2016
Xxxxxx Xxxxxx & Co., LLC
As Representatives of the several underwriters, named on Schedule
1 to the Underwriting Agreement referenced below
x/x Xxxxxx Xxxxxx & Co., LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands
that Xxxxxx Xxxxxx & Co., LLC (the “Representative”) proposes to enter into an Underwriting Agreement (the
“Underwriting Agreement”) with Aytu BioScience, Inc, a Delaware corporation (the “Company”),
providing for the public offering (the “Public Offering”) of shares of common stock, par value $0.0001 per share
(the “Common Stock”) and warrants to purchase share of common stock of the Company (the “Securities”).
To induce the
Representative to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without
the prior written consent of the Representative, the undersigned will not, during the period commencing on the date hereof
and ending [__] days after the date of the final prospectus (the “Prospectus”) relating to the Public
Offering (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise
transfer or dispose of, directly or indirectly, any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”);
(2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by
delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the
registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up
Securities. Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up
Securities without the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up
Securities acquired in open market transactions after the completion of the Public Offering; provided that no
filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
shall be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such
open market transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family
member or trust for the benefit of a family member (for purposes of this lock-up agreement, “family member” means
any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a
charity or educational institution; or (d) if the undersigned, directly or indirectly, controls a corporation, partnership,
limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner or member
of, or owner of similar equity interests in, the undersigned, as the case may be; provided that in the case of any
transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for
value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of
this lock-up agreement and (iii) no filing under Section 16(a) of the Exchange Act shall be required or shall be
voluntarily made. The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in
compliance with this lock-up agreement.
If (i) during the last
17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company
occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes
aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period,
the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative
waives, in writing, such extension; provided, however, that this extension of the Lock-Up Period shall not apply to the extent
that FINRA has amended or repealed NASD Rule 2711(f)(4), or has otherwise provided written interpretive guidance regarding such
rule, in each case, so as to eliminate the prohibition of any broker, dealer, or member of a national securities association from
publishing or distributing any research report, with respect to the securities of an Emerging Growth Company prior to or after
the expiration of any agreement between the broker, dealer, or member of a national securities association and the Emerging Growth
Company or its shareholders that restricts or prohibits the sale of securities held by the Emerging Growth Company or its shareholders
after the initial public offering date.
The undersigned agrees
that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during
the period from the date hereof to [and including the 34th day] following the expiration of the initial Lock-Up Period,
the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless
it has received written confirmation from the Company that the Lock-Up Period (as may have been extended pursuant to the previous
paragraph) has expired.
If the undersigned
is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable
to any issuer-directed or “friends and family” Securities that the undersigned may purchase in the Public Offering,
(ii) the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the
foregoing restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending
release or waiver, and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by
press release through a major news service at least two (2) business days before the effective date of the release or waiver. Any
release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business
days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver
is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing
to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in
effect at the time of such transfer.
No provision in this
agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities exercisable
or exchangeable for or convertible into Common Stock, as applicable; provided that the undersigned does not transfer the
Common Stock acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to
the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or
modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in
such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period).
The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors and assigns.
The undersigned
understands that, if the Underwriting Agreement is not executed by [November 30, 2016], or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and
delivery of the Securities to be sold thereunder, then this lock-up agreement shall be void and of no further force or
effect.
Whether or not the
Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.
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Very truly yours, |
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(Name - Please Print) |
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(Signature) |
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(Name of Signatory, in the case of entities - Please Print) |
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(Title of Signatory, in the case of entities - Please Print) |
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Address: |
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EXHIBIT C
Form of Press Release
[COMPANY]
[Date]
[COMPANY] (the “Company”) announced
today that Xxxxxx Xxxxxx & Co., LLC, acting as representative for the underwriters in the Company’s recent public offering
of _______ shares of the Company’s common stock, is [waiving] [releasing] a lock-up restriction with respect to _________
shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company. The
[waiver] [release] will take effect on _________, 20___, and the shares may be sold on or after such date.
This press release is not an offer or sale
of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities
may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act
of 1933, as amended.
XXXXXXX X