Exhibit 1.1
Execution Copy
SACHEM
CAPITAL CORP.
UNDERWRITING AGREEMENT
July 24, 0000
Xxxxx Capital Corp.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
As Representative of the
Several
Underwriters Named on Schedule I hereto
Ladies and Gentlemen:
The undersigned, Sachem
Capital Corp., a company incorporated under the laws of New York (collectively with its subsidiaries and affiliates, including,
without limitation, all entities disclosed or described in the Registration Statement as being subsidiaries or affiliates of Sachem
Capital Corp., the “Company”), hereby confirms its agreement (this “Agreement”) with the
several underwriters (such underwriters, including the Representative, the “Underwriters” and each an “Underwriter”)
named in Schedule I hereto for which Aegis Capital Corp. is acting as representative (the “Representative,”
and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the
term Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.
It is understood that
the several Underwriters are to make a public offering of the Public Shares as soon as the Representative deems it advisable to
do so. The Public Shares are to be initially offered to the public at the initial public offering price set forth in the Prospectus
Supplement.
It is further understood
that you will act as the Representative for the Underwriters in the offering and sale of the Closing Shares and, if any, the Option
Shares in accordance with this Agreement.
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Action”
shall have the meaning ascribed to such term in Section 3.1(k).
“Affiliate”
means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or
is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities
Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.
“Closing”
means the closing of the purchase and sale of the Closing Shares pursuant to Section 2.1 or the Option Shares pursuant to Section
2.2.
“Closing
Date” means, with respect to the Closing Shares, the second (or if the Closing Shares are priced, as contemplated
by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the third) full Business Day following the date hereof,
or at such other time and date as the Representative and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act.
“Closing
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b), which aggregate purchase price shall
be net of the underwriting discounts and commissions.
“Closing
Shares” shall have the meaning ascribed to such term in Section 2.1(a).
“Code”
means the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common shares of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred shares, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“Company Auditor”
means Hoberman & Lesser, LLP, with offices located at 000 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000.
“Company Counsel”
means Xxxxxxx Xxxxxxxxx Xxxxxx & Lever, LLC, with offices located at Xxx X. Xxxxxxxx, 00xx Xxxxx, Xxxxx Xxxxxx,
Xxx Xxxx 00000.
“Effective
Date” shall have the meaning ascribed to such term in Section 3.1(f).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Execution
Date” shall mean the date on which the parties execute and enter into this Agreement.
“FCPA” means
the Foreign Corrupt Practices Act of 1977, as amended.
“FINRA”
means the Financial Industry Regulatory Authority.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(i).
“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreements” means the lock-up agreements that are delivered on the date hereof by each of the Company’s officers
and directors, in the form of Exhibit A attached hereto.
“Lock-Up
Period” means the period beginning on the date hereof and ending on the earlier of (i) August 14, 2019 and (ii) the day
following the day on which all of the Option Shares have been sold; provided, however, if the net proceeds of the Offering
to the Company (i.e., after taking into account underwriter discounts and commissions, the underwriter non-accountable expense
allowance provided for in Section 4.6(d) hereof and the expense reimbursement allowance provided for in the last sentence of Section
4.6(c) hereof) shall be less than $10 million, the Lock-Up Period shall terminate on the day following the Closing Date.
“Material
Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document.
“NMRS”
means Xxxxxx Xxxxxxx Xxxxx & Scarborough LLP, with offices located at 000 Xxxxxxxxxxxx Xxxxxx XX, Xxxxx 000, Xxxxxxxxxx, XX
00000.
“Offering”
shall have the meaning ascribed to such term in Section 2.1(c).
“Option”
shall have the meaning ascribed to such term in Section 2.2(a).
“Option
Closing Date” shall have the meaning ascribed to such term in Section 2.2(c).
“Option
Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.2(b), which aggregate purchase price
shall be net of the underwriting discounts and commissions.
“Option
Shares” shall have the meaning ascribed to such term in Section 2.2(a).
“Permitted
Free Writing Prospectus” shall have the meaning ascribed to such term in Section 4.2(d).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preliminary
Prospectus Supplement” means, if any, any preliminary prospectus relating to the Public Shares included in the Registration
Statement or filed with the Commission pursuant to Rule 424(b).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“Prospectus”
means the base prospectus, dated November 9, 2018, which is a part of the Registration Statement.
“Prospectus
Supplement” means the final prospectus supplement to the Prospectus to be used in connection with the Offering filed
or to be filed with the Commission pursuant to Rule 424(b) of the Securities Act.
“Public
Shares” means, collectively, the Closing Shares and, if any, the Option Shares.
“Registration
Statement” means, collectively, the various parts of the registration statement prepared by the Company on Form S-3 (File
No. 333-227906) with respect to the Public Shares, each as amended as of the date hereof, including the Prospectus and the Prospectus
Supplement, if any, the Preliminary Prospectus Supplement, if any, and all exhibits filed with or incorporated by reference into
such registration statement.
“REIT”
shall have the meaning ascribed to such term in Section 3.1(ff).
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(i).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company
formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or
the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Lock-Up Agreements, and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
“Transfer
Agent” means Computershare Trust Company, N.A., the current transfer agent of the Company, with a mailing address of
000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 and any successor transfer agent of the Company.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
(a) Upon
the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate 2,000,000 shares of Common
Stock, and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the number of shares of Common Stock
(the “Closing Shares”) set forth opposite the name of such Underwriter on Schedule I hereof;
and
(b) The
aggregate purchase price for the Closing Shares shall equal the sum of the amounts set forth opposite the name of each Underwriter
on Schedule I hereto (the “Closing Purchase Price”). The price for one Closing Share shall
be $4.75 (the “Share Purchase Price”); and
(c)
At the Closing, the Representative shall deliver or cause to be delivered to the Company, via wire transfer, immediately available
funds equal to the Closing Purchase Price, against delivery of the certificates for the Closing Shares to the Representative through
the facilities of The Depository Trust Company for the respective accounts of the Underwriters, and the Company shall deliver the
other items required pursuant to Section 2.3 deliverable at the Closing. Upon satisfaction of the covenants and conditions set
forth in Sections 2.3 and 2.4, the Closing shall occur at the offices of NMRS or such other location as the Company and Representative
shall mutually agree. The Public Shares are to be offered initially to the public at the offering price set forth on the cover
page of the Prospectus Supplement (the “Offering”).
2.2 Option
to Purchase Additional Shares.
(a) The
Representative is hereby granted an option (the “Option”) to purchase, in the aggregate, up to 300,000 shares
of Common Stock (the “Option Shares”) which may be purchased at the Share Purchase Price, solely for the purpose
of covering over-allotments, if any.
(b) In
connection with an exercise of the Option, the purchase price to be paid for the Option Shares shall be equal to the product of
the Share Purchase Price multiplied by the number of Option Shares to be purchased (the aggregate purchase price to be paid on
an Option Closing Date, the “Option Closing Purchase Price”).
(c) The
Option granted pursuant to this Section 2.2 may be exercised by the Representative as to all (at any time) or any part (from time
to time) of the Option Shares within 45 days after the Execution Date. An Underwriter will not be under any obligation to purchase
any Option Shares prior to the exercise of the Option by the Representative. The 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 to be purchased and the date and time for delivery of
and payment for the Option Shares (each, an “Option Closing Date”), which will not be later than two (2) full
Trading 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 NMRS or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed
upon by the Company and the Representative. Upon exercise of the Option, the Company will become obligated to convey to the Underwriters,
and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option
Shares specified in such notice. The Representative may cancel the Option at any time prior to the expiration of the Option by
written notice to the Company.
2.3 Deliveries.
The Company shall deliver or cause to be delivered to the Representative the following:
(i) At
the Closing Date, the Closing Shares and, as to each Option Closing Date, if any, the applicable Option Shares, which shares shall
be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;
(ii) At
the Closing Date, a legal opinion of Company Counsel addressed to the Underwriters, and a negative assurance letter, in each case,
in form and substance reasonably satisfactory to the Representative and as to each Option Closing Date, if any, a bring-down legal
opinion of Company Counsel addressed to the Underwriters, and a negative assurance letter, in each case, in form and substance
reasonably satisfactory to the Representative;
(iii) Contemporaneously
herewith, a cold comfort letter, addressed to the Underwriters and in form and substance reasonably satisfactory in all respects
to the Representative from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated
as of the Closing Date and each Option Closing Date, if any;
(iv) On
the Closing Date and on each Option Closing Date, the duly executed and delivered Officer’s Certificate, in form and substance
reasonably satisfactory in all respects to the Representative;
(v) On
the Closing Date and on each Option Closing Date, the duly executed and delivered Secretary’s Certificate, in form and substance
reasonably satisfactory in all respects to the Representative; and
(vi) Contemporaneously
herewith, the duly executed and delivered Lock-Up Agreements.
2.4 Closing
Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing and each Option Closing
Date are subject to the following conditions being met, unless waived by the Representative:
(i) the
accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company
already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the
Company contained herein (unless as of a specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been
performed;
(iii) the
delivery by the Company of the items set forth in Section 2.3 of this Agreement;
(iv) the
Registration Statement shall be effective on the date of this Agreement and at each of the Closing Date and each Option Closing
Date, if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of
the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative;
(v) by
the Execution Date, if required by FINRA, the Underwriters shall have received a “no-objection” letter from FINRA as
to the amount of compensation payable to the Underwriters as described in the Registration Statement;
(vi) the
Closing Shares and the Option Shares have been approved for listing on the Trading Market; and
(vii) prior
to and on the Closing Date and each Option Closing Date, if any: (i) except as set forth in the Registration Statement, the
Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement, there shall have been no material adverse change
in the condition or the business activities, financial or otherwise, of the Company; (ii) no action, suit or proceeding, at
law or in equity, shall be pending or threatened against the Company or any Affiliate of the Company before or by any court or
federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially
adversely affect the business, operations, prospects or financial condition of the Company, except as set forth in the Registration
Statement, the Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement; (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 Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement shall
contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules and
regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations
thereunder, and none of the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement or the Prospectus Supplement
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.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Execution Date, as of the
Closing Date and as of each Option Closing Date, if any, as follows:
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Reports. Except as otherwise set forth in the
Registration Statement, the Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement, the Company owns,
directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and
all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no Subsidiaries, all other
references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of
the provisions of its respective organizational documents. Each of the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may
be, could not have or reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate
action on the part of the Company and no further corporate action is required by the Company, the Board of Directors or the Company’s
shareholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each
other Transaction Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company
and, assuming they have been duly and properly executed by the other parties thereto, when delivered in accordance with the terms
hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Public Shares and the consummation by it of the transactions contemplated hereby
and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution
or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii)
subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filing with the Commission of the Preliminary Prospectus Supplement and the Prospectus Supplement, (ii) such consents, approvals,
authorizations, orders and registrations or qualifications as may be required by FINRA and the Trading Market, and (iii) such filings
as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f) Registration
Statement. The Company has filed with the Commission the Registration Statement under the Securities Act, which became effective
on November 9, 2018 (the “Effective Date”), for the registration under the Securities Act of the Public Shares.
At the time of such filing, the Company met the requirements of Form S-3 under the Securities Act. The Registration Statement meets
the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule and the Prospectus Supplement
will meet the requirements set forth in Rule 424(b). The Company has advised the Representative of all further information (financial
and otherwise) with respect to the Company required to be set forth in the Registration Statement and Prospectus Supplement. Any
reference in this Agreement to the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement or the Prospectus
Supplement shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form
S-3 which were filed under the Exchange Act, on or before the date of this Agreement, or the issue date of the Prospectus, the
Preliminary Prospectus Supplement or the Prospectus Supplement, as the case may be; and any reference in this Agreement to the
terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the
Prospectus, the Preliminary Prospectus Supplement or the Prospectus Supplement shall be deemed to refer to and include the filing
of any document under the Exchange Act after the date of this Agreement, or the issue date of the Prospectus, the Preliminary Prospectus
Supplement or the Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All references in
this Agreement to financial statements and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration Statement,
the Prospectus, the Preliminary Prospectus Supplement or the Prospectus Supplement (and all other references of like import) shall
be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated
by reference in the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement or the Prospectus Supplement,
as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus, the
Preliminary Prospectus Supplement or the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending
or has been initiated or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement, “free
writing prospectus” has the meaning set forth in Rule 405 under the Securities Act. The Company will not, without the prior
consent of the Representative, prepare, use or refer to, any free writing prospectus.
(g) Issuance
of Public Shares. The Public Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The
Public Shares conform in all material respects to all statements with respect thereto contained in the Registration
Statement.
(h) Capitalization.
The capitalization of the Company at March 31, 2019 is as set forth in the SEC Reports. Since March 31, 2019 through the date hereof,
the Company has issued and sold 3,603,784 shares of Common Stock pursuant to the Company’s at-the-market programs and 16,407
shares of Common Stock pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed periodic report under the Exchange Act or as set forth in any Current Report on Form 8-K. No Person has any
right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Public Shares will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other than the Underwriters). Except as set forth in
the SEC Reports, there are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts
the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company
or any Subsidiary. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The authorized shares
of the Company conform in all material respects to all statements relating thereto contained in the Registration Statement and
the Prospectus. The offers and sales of the Company’s securities 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,
exempt from such registration requirements. Except for the Required Approvals, no further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the Public Shares. There are no stockholders agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party
or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(i) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement, being collectively referred to herein as the
“SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company
has not been an issuer subject to Rule 144(i) under the Securities Act in the past 12 months. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles (“GAAP”), applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
The agreements and documents described in the Registration Statement and the SEC Reports 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 rules
and regulations thereunder to be described in the Registration Statement or the SEC Reports 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 or the SEC Reports, 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 therefore may be brought. None
of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company’s
knowledge, any other party is in default thereunder and, to the best of 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. To the best of 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, including, without limitation, those relating to environmental
laws and regulations, except for such violations that would not reasonably be expected to result in a Material Adverse Effect.
(j) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in the Registration Statement or a subsequent SEC Report filed prior to
the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result
in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans or as set forth in a Current Report on Form 8-K and (vi) no officer or director of the Company
has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Public Shares contemplated by this Agreement, no event, liability, fact,
circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
(k) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Public
Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not
been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving
the Company or, to the Company’s knowledge, any current or former director or officer of the Company.
(l) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(m) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.
(n) Environmental
Laws. Except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of the Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products, asbestos-containing materials, mold or any hazardous materials as defined by or regulated
under any Environmental Laws, as defined below (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental
Laws”), (B) the Company and the Subsidiaries have all permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, and (C) there are no pending or known threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation
or proceedings relating to any Environmental Law against the Company or any of the Subsidiaries.
(o) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (each,
a “Material Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material Permit. The disclosures in the Registration Statement concerning the effects
of Federal, State, local and all foreign regulation on the Company’s business as currently contemplated are correct in all
material respects.
(p) Title
to Personal Property. Each of the Company and the Subsidiaries have good and marketable title to all of its assets and personal
property owned by it, free and clear of all liens, encumbrances and defects, except such as are described in the Registration Statement,
the Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement or such as do not materially affect the value
of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and
the Subsidiaries; and all assets and personal property held under lease by the Company and the Subsidiaries are held by it under
valid, subsisting and enforceable leases, with such exceptions as do not materially interfere with the use made and proposed to
be made of such assets by the Company and the Subsidiaries and the Company does not have notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company and the Subsidiaries under any such leases or affecting or
questioning the rights of the Company and the Subsidiaries to be in the continued possession of the leased premises under such
leases.
(q) Property.
(i) The Company and the Subsidiaries have good and marketable fee simple title (or in the case of ground leases, a valid leasehold
interest) to all real property owned by them and the improvements (exclusive of improvements owned by tenants or by landlords,
if applicable) located thereon, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind, except such as (A) are described in the Registration Statement, the Prospectus, the Preliminary Prospectus
Supplement and the Prospectus Supplement, (B) will not, singly or in the aggregate, materially affect the value of such property
and do not interfere in any material respect with the use made and proposed to be made of such property by the Company or any of
the Subsidiaries, or (C) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;
(ii) except as otherwise set forth in or described in the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement
and the Prospectus Supplement and except as would not, individually or in the aggregate, reasonably be expected have a Material
Adverse Effect, all of the leases and subleases of the Company and the Subsidiaries, considered as one enterprise, and under which
the Company or any of the Subsidiaries hold properties described in the Registration Statement, the Prospectus, the Preliminary
Prospectus Supplement and the Prospectus Supplement, are in full force and effect, and neither the Company nor any Subsidiary has
any notice of any 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; (iii) none of the Company or any of
the Subsidiaries has received from any governmental authority to which the Company or a Subsidiary is subject any written notice
of any condemnation of or zoning change affecting the properties of the Company and the Subsidiaries or any part thereof, and none
of the Company or any of the Subsidiaries knows of any condemnation or zoning change affecting the properties of the Company and
the Subsidiaries which is threatened and, in each case, which if consummated would reasonably be expected to, individually or in
the aggregate, to have a Material Adverse Effect; (iv) each of the properties of the Company and the Subsidiaries complies with
all applicable codes, ordinances, laws and regulations (including without limitation, building and zoning codes, laws and regulations
and laws relating to access to the properties of the Company and the Subsidiaries), except for failures to the extent disclosed
in the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement and except for
such failures to comply that would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect;
(v) neither the Company nor any Subsidiary has received written notice of proposed material special assessment or any proposed
change in any property tax, zoning or land use law or availability of water affecting any property that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and (vi) to the knowledge of the Company and the Subsidiaries,
except as set forth in or described in the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement and the
Prospectus Supplement or reflected in the pro forma financial statements, and except as would not, individually or in the aggregate,
reasonably be expected have a Material Adverse Effect, there are no uncured events of default, or events that with the giving of
notice or passage of time, or both, would constitute an event of default, by any tenant under any of the terms and provisions of
the leases.
(r) No
Acquisitions or Dispositions. (A) There are no contracts, letters of intent, term sheets, agreements, arrangements or understandings
with respect to the direct or indirect acquisition or disposition by any of the Company or the Subsidiaries of interests in assets
or real property that are required to be described in the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement
and the Prospectus Supplement that are not so described; and (B) neither the Company nor any of the Subsidiaries has sold any real
property to a third party during the immediately preceding twelve calendar months except as described in the Registration Statement,
the Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement.
(s) Title
Insurance. Title insurance in favor of the Company and the Subsidiaries has been obtained with respect to each property owned
by any such entity, except where the failure to maintain such title insurance would not have a Material Adverse Effect.
(t) Mortgages;
Deeds of Trust. Except as described in the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement and
the Prospectus Supplement, the Company has not issued any debt and has no debt outstanding. None of the properties owned by the
Company or the Subsidiaries is encumbered by any credit agreements, mortgages, deeds of trust, guaranties, side letters, and other
documents evidencing, securing or otherwise relating to any secured or unsecured indebtedness of the Company or any of the Subsidiaries.
(u) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports
and which the failure to do so could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a written notice that any of, the Intellectual Property Rights
has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the
date of this Agreement, except as could not, individually or in the aggregate, have or reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements
included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights
violate or infringe upon the rights of any Person, except as could not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the Intellectual Property Rights, except as could not, individually
or in the aggregate, have or reasonably be expected to have a Material Adverse Effect. The Company and the Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(v) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a significant increase in cost.
(w) Transactions
With Affiliates and Employees. Except as set forth in the Registration Statement and the SEC Reports, none of the officers
or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any
Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise
requiring payments to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.
(x) Certain
Fees. Except as set forth in the Preliminary Prospectus Supplement and the Prospectus Supplement, no brokerage or finder’s
fees or commissions are or will be payable by the Company, any Subsidiary or Affiliate of the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. To the Company’s knowledge, there are no other arrangements, agreements or understandings of
the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’ compensation,
as determined by FINRA. The Company has not made any direct or indirect payments (in cash, securities or otherwise) in connection
with the offering of the Public Shares 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 months prior to the Execution Date. 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.
(y) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Public Shares will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(z) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary that has not previously been waived or satisfied.
(aa) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible
for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current
in payment of the fees of the Depository Trust Company (or such other established clearing corporation) in connection with such
electronic transfer.
(bb) Intentionally
omitted.
(cc) Intentionally
omitted.
(dd) No
Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would
cause this offering of the Public Shares to be integrated with prior offerings by the Company for purposes of any applicable shareholder
approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(ee) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Public Shares hereunder, (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports sets forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments.
(ff) Federal
Tax Status. Commencing with its taxable year ended December 31, 2017, the Company has been organized in conformity with the
requirements for qualification and taxation as a real estate investment trust (a “REIT”) under the Code. The
ownership and method of operation of the Company as described in the Registration Statement, the Prospectus, the Preliminary Prospectus
Supplement and the Prospectus Supplement has enabled the Company to meet the requirements for qualification and taxation as a REIT
under the Code for the Company’s taxable years ended December 31, 2017 and December 31, 2018. The Company currently intends
to qualify as a REIT under the Code for the Company’s taxable years ended December 31, 2019 and thereafter, does not know
of any event that would reasonably be expected to cause the Company to fail to qualify as a REIT under the Code during any such
time and has no present intention of changing its proposed and current method of operation or engaging in activities which would
cause it to fail to qualify or make economically undesirable its qualification as a REIT under the Code. All statements regarding
the Company’s qualification and taxation as a REIT and descriptions of the Company’s organization, ownership and method
of operation set forth in the Registration Statement, the Prospectus, the Preliminary Prospectus Supplement and the Prospectus
Supplement are true, correct and complete in all material respects. Each of the Company’s Subsidiaries is treated as a “disregarded
entity” within the meaning of Section 7701 of the Code and all applicable regulations under the Code.
(gg) Payment
of Taxes. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in
a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of
all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or
of any Subsidiary know of no basis for any such claim. 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. The term “taxes” mean 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 whatsoever, 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.
(hh) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of the FCPA. 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 FCPA.
(ii) Accountants.
To the knowledge and belief of the Company, the Company Auditor (i) is an independent registered public accounting firm as required
by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ending December 31, 2019. The Company Auditor has not, during the periods covered by the financial
statements included in the SEC Reports, provided to the Company any non-audit services, as such term is used in Section 10A(g)
of the Exchange Act.
(jj) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department.
(kk) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s
request.
(ll) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%)
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(mm) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.
(nn) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the
Company’s directors and officers immediately prior to the Offering is true and correct in all respects and the Company has
not become aware of any information which would cause the information disclosed in such questionnaires become inaccurate and incorrect.
(oo) FINRA
Affiliation. No officer, director or, to the Company’s knowledge, any beneficial owner of 5% or more of the Company’s
unregistered securities has any direct or indirect affiliation or association with any FINRA member (as determined in accordance
with the rules and regulations of FINRA) that is participating in the Offering.
(pp) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or NMRS
shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
(qq) Board
of Directors. The Board of Directors is comprised of the persons set forth under the heading of the Prospectus captioned “Management.”
To the Company’s knowledge, the qualifications of the persons serving as board members and the overall composition of the
Board of Directors comply with the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder applicable to the Company and
the rules of the Trading Market. At least one member of the Board of Directors qualifies as a “financial expert” as
such term is defined under the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market.
In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent” under the
rules of the Trading Market.
(rr) Xxxxxxxx-Xxxxx;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of
the Xxxxxxxx-Xxxxx Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with 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. The
Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its Subsidiaries.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Amendments
to Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriters complete
conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof,
the Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement, in such quantities and at such places as an
Underwriter reasonably requests. Documents filed with the Commission pursuant to its XXXXX system shall be deemed to have been
delivered to the Underwriters pursuant to this Section. Neither the Company nor any of its directors and officers has distributed
and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of
the Public Shares other than the Registration Statement, Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement,
and copies of the documents incorporated by reference therein. The Company shall not file any such amendment or supplement to which
the Representative shall reasonably object in writing.
4.2 Federal
Securities Laws.
(a) Compliance.
During the time when a prospectus is required to be delivered under the Securities Act, the Company will use its reasonable best
efforts to comply with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the
Exchange Act and the rules and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Public Shares in accordance with the provisions hereof and the Prospectus Supplement. If at any
time when a prospectus relating to the Public Shares is required to be delivered under the Securities Act, any event shall have
occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters, the Prospectus Supplement,
as then amended or supplemented, includes an untrue statement of a material fact or omits 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,
or if it is necessary at any time to amend the Prospectus Supplement to comply with the Securities Act, the Company will notify
the Underwriters promptly and prepare and file with the Commission, subject to Section 4.1 hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Securities Act.
(b) Filing
of Final Prospectus Supplement. The Company will file the Prospectus Supplement (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule 424.
(c) Exchange
Act Registration. For a period of three years from the Execution Date, the Company will use its reasonable best efforts to
maintain the registration of the Closing Shares and, to the extent sold, the Option Shares, under the Exchange Act. The Company
will not deregister the Closing Shares and, to the extent sold, the Option Shares, under the Exchange Act without the prior written
consent of the Representative. Nothing in this Section 4.2(c) or Section 4.18 is intended to prevent the Company from completing
a change of control or similar transaction even though it may have the effects described in such sections.
(d) Free
Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Public
Shares that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities
Act, without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative
is herein referred to as a “Permitted Free Writing Prospectus.” The Company represents that it will treat
each Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in rule and regulations under
the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including
timely Commission filing where required, legending and record keeping.
4.3 Intentionally
omitted.
4.4 Effectiveness
and Events Requiring Notice to the Underwriters. The Company will promptly notify the Underwriters 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 Shares 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 4.4 that, in the judgment of the Company, makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or that requires the making of any changes in the Registration Statement
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
will make every reasonable effort to obtain promptly the lifting of such order.
4.5 Review
of Financial Statements. For a period of three (3) years from the Execution Date, the Company, at its expense, shall cause
its regularly engaged independent registered public accountants to review (but not audit) the Company’s financial statements
for each of the first three fiscal quarters prior to the announcement of quarterly financial information.
4.6 Reports
to the Underwriters.
(a) Periodic
Reports, etc. For a period of three years from the Execution Date, the Company will furnish 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 Underwriters: (i) a copy of each periodic report the Company shall
be required to file with the Commission; (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)
a copy 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 that the Underwriters shall each sign, if requested by the Company, a Regulation FD compliant confidentiality
agreement which is reasonably acceptable to the Representative in connection with such Underwriter’s receipt of such information.
Documents filed with the Commission pursuant to its XXXXX system or otherwise disseminated widely to the public shall be deemed
to have been delivered to the Underwriters pursuant to this Section.
(b) Intentionally
omitted.
(c) General
Expenses Related to the Offering. The Company hereby agrees to pay all expenses incident to the performance of the obligations
of the Company under this Agreement, including, but not limited to: (A) all expenses incurred in connection with the delivery to
the Underwriters of the Public Shares (including all fees and expenses of the registrar and transfer agent of the Public Shares,
and the cost of preparing and printing stock certificates), (B) all expenses and fees (including, without limitation, fees and
expenses of the Company’s counsel) in connection with the preparation, printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments, schedules, and exhibits thereto), the Public Shares,
the Preliminary Supplement, the Prospectus Supplement and any Permitted Free Writing Prospectus and any amendment thereof or supplement
thereto, (C) all reasonable filing fees and reasonable fees and disbursements of the Underwriters’ counsel incurred in connection
with the qualification of the Public Shares for offering and sale by the Underwriters or by dealers under the securities or blue
sky laws of the states and other jurisdictions that the Representative shall designate, (D) the reasonable filing fees, if
any, payable to FINRA in connection with the Offering, (E) listing fees, if any, and (F) all other costs and expenses incident
to the performance of its obligations hereunder that are not otherwise specifically provided for herein. The Company will reimburse
the Representative for the Underwriters’ reasonable out-of-pocket expenses, including “road show,” diligence,
legal fees and disbursements, in connection with the purchase and sale of the Public Shares contemplated hereby up to an aggregate
of $50,000 (including amounts payable pursuant to clauses (C) and (D) above).
(d) Non-accountable
Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 4.6(c), on the Closing Date,
and each Option Closing Date, if any, the Company will pay to the Representative a non-accountable expense allowance equal to an
aggregate of 0.50% of the gross proceeds received by the Company from the sale of the Public Shares on the Closing Date, and each
Option Closing Date, if any, by deduction from the proceeds of the Offering contemplated herein.
4.7 Application
of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application
described under the caption “Use of Proceeds” in the Prospectus.
4.8 Delivery
of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which
need not be certified by independent public or independent certified public accountants unless required by the Securities Act or
the Rules and Regulations under the Securities Act, 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 consecutive months beginning after the Execution Date, provided that filings
of the Company’s reports, schedules, forms, statements and other documents required to be filed by the Company under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (including the exhibits thereto and documents
incorporated by reference therein), after the Execution Date shall be deemed to constitute delivery.
4.9 Stabilization.
Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative)
has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under 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 Shares.
4.10 Internal
Controls. The Company will 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.
4.11 Accountants.
The Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least
three years after the Execution Date. The Underwriters acknowledge that the Company Auditor is acceptable to the Underwriters.
4.12 FINRA.
The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater
shareholder of the Company becomes an affiliate or associated person of an Underwriter.
4.13 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates
or any selected dealer 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. Notwithstanding
anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the
success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the
Company by the Underwriters for the shares and the Underwriters have no obligation to disclose, or account to the Company for,
any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any
claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty.
4.14 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board
members and the overall composition of the Board of Directors comply with the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated
thereunder and with the listing requirements of the Trading Market and (ii) if applicable, at least one member of the Board
of Directors qualifies as a “financial expert” as such term is defined under the Xxxxxxxx-Xxxxx Act of 2002 and the
rules promulgated thereunder.
4.15 Securities
Laws Disclosure; Publicity. At the request of the Representative, at the time requested by the Representative, the Company
shall issue a press release disclosing the material terms of the Offering. The Company and the Representative shall consult with
each other in issuing any other press releases with respect to the Offering, and neither the Company nor any Underwriter shall
issue any such press release or otherwise make any public statement without the prior consent of the Company, with respect to any
press release of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of the Company,
which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing
party shall promptly provide the other party with prior notice of such public statement or communication.
4.16 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Underwriter of the Public Shares is an “Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Underwriter of the Public Shares could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Public Shares.
4.17 Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue Option Shares pursuant to the Option.
4.18 Listing
of Common Stock. The Company hereby agrees to use its reasonable best efforts to maintain the listing or quotation of the Common
Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list
or quote all of the Closing Shares and Option Shares on such Trading Market and promptly secure the listing of all of the Closing
Shares and Option Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded
on any other Trading Market, it will then include in such application all of the Closing Shares and Option Shares, and will take
such other action as is reasonably necessary to cause all of the Closing Shares and Option Shares to be listed or quoted on such
other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing
and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common
Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without
limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection
with such electronic transfer.
4.19 Subsequent
Equity Sales. The Company hereby agrees that, without the prior written consent of the Representative, it will not, during
the Lock-Up Period, (i) offer, pledge, issue, sell, contract to sell, purchase, contract to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock; or (ii) 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 Common Stock, whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or otherwise; or (iii) file any registration statement with
the Commission relating to the offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock. The restrictions contained in the preceding sentence shall not apply to (i) the issuance of employee stock options
and/or restricted stock awards pursuant to equity incentive plans or the filing of a Registration Statement on Form S-8 therefore
or (ii) the issuance of securities in connection with an acquisition or a strategic relationship; provided, however, that
none of such securities shall be resold until the expiration of the Lock-Up Period.
4.20 Qualification
and Taxation as a REIT. The Company will use its commercially reasonable efforts to qualify and continue to qualify for taxation
as a REIT under the Code and will not intentionally take any action to revoke or otherwise terminate the Company’s REIT election,
unless the Company’s board of directors determines in good faith that it is no longer in the best interests of the Company
and its shareholders to be so qualified.
4.21 Research
Independence. The Company acknowledges that each Underwriter’s research analysts and research departments, if any, are
required to be independent from their respective investment banking divisions and are subject to certain regulations and internal
policies, and that such Underwriter’s research analysts may hold and make statements or investment recommendations and/or
publish research reports with respect to the Company and/or the offering that differ from the views of its investment bankers.
The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against such
Underwriter with respect to any conflict of interest that may arise from the fact that the views expressed by their independent
research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company
by such Underwriter’s investment banking divisions. The Company acknowledges that the Representative is a full service securities
firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account
of its customers and hold long or short position in debt or equity securities of the Company.
ARTICLE V.
DEFAULT BY UNDERWRITERS
If on the Closing Date
or any Option Closing Date, if any, any Underwriter shall fail to purchase and pay for the portion of the Closing Shares or Option
Shares, as the case may be, which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of
any default on the part of the Company), the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting
Underwriters, shall use their reasonable best efforts to procure within 36 hours thereafter one or more of the other Underwriters,
or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing
Shares or Option Shares, as the case may be, which the defaulting Underwriter or Underwriters failed to purchase. If during such
36 hours the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing Shares or Option
Shares, as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number
of Closing Shares or Option Shares, as the case may be, with respect to which such default shall occur does not exceed 10% of the
Closing Shares or Option Shares, as the case may be, covered hereby, the other Underwriters shall be obligated, severally, in proportion
to the respective numbers of Closing Shares or Option Shares, as the case may be, which they are obligated to purchase hereunder,
to purchase the Closing Shares or Option Shares, as the case may be, which such defaulting Underwriter or Underwriters failed to
purchase, or (b) if the aggregate number of Closing Shares or Option Shares, as the case may be, with respect to which such default
shall occur exceeds 10% of the Closing Shares or Option Shares, as the case may be, covered hereby, the Company will have the right
to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent
provided in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the
applicable Closing Date may be postponed for such period, not exceeding seven days, as the Representative, or if the Representative
is the defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus
or in any other documents or arrangements may be effected. The term “Underwriter” includes any person substituted for
a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
ARTICLE VI.
INDEMNIFICATION
6.1 Indemnification
of the Underwriters. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriters,
and each dealer selected by each Underwriter that participates in the offer and sale of the Public Shares (each a “Selected
Dealer”) and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter
or any Selected Dealer (“Controlling Person”) 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 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 such Underwriter and the Company or between such
Underwriter 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, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement, the Prospectus, the
Preliminary Prospectus Supplement or the Prospectus Supplement (as from time to time each may be amended and supplemented); (ii)
any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of
the offering of the Public Shares, including any “road show” or investor presentations made to investors by the Company
(whether in person or electronically); or (iii) any application or other document or written communication (in this Article VI,
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 Shares under the securities laws thereof or filed with the Commission,
any state securities commission or agency, Trading Market or any 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 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 written
information furnished to the Company with respect to the applicable Underwriter by or on behalf of such Underwriter expressly for
use in the Preliminary Prospectus Supplement or the Prospectus Supplement, or any amendment or supplement thereto, or in any application,
as the case may be. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary
Prospectus, if any, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of an Underwriter to the
extent that any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Preliminary
Prospectus Supplement or the Prospectus Supplement was not given or sent to the Person asserting any such loss, liability, claim
or damage at or prior to the written confirmation of sale of the Public Shares to such Person as required by the Securities Act
and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the Preliminary Prospectus
Supplement or the Prospectus Supplement, unless such failure to deliver the Preliminary Prospectus Supplement or the Prospectus
Supplement was a result of non-compliance by the Company with its obligations under this Agreement. The Company agrees promptly
to notify each Underwriter of the commencement of any litigation or proceedings against the Company or any of its officers, directors
or Controlling Persons in connection with the issue and sale of the Public Shares or in connection with the Registration Statement,
the Prospectus the Preliminary Prospectus Supplement or the Prospectus Supplement.
6.2 Procedure.
If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be
sought against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may
be, 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 fees of counsel (subject to the reasonable approval of such Underwriter or such Selected
Dealer, as the case may be) and payment of actual expenses. Such Underwriter, such Selected Dealer or Controlling Person 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 such Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the
Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company
shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available
to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected
by such Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding
anything to the contrary contained herein, if any Underwriter, Selected Dealer or Controlling Person shall assume the defense of
such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval
shall not be unreasonably withheld.
6.3 Indemnification
of the Company. Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its directors,
officers and employees and agents who control 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 such Underwriter, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements
or omissions made in the Registration Statement, the Preliminary Prospectus Supplement or the Prospectus Supplement or any amendment
or supplement thereto or in any application, in reliance upon, and in strict conformity with, written information furnished to
the Company with respect to such Underwriter by or on behalf of such Underwriter expressly for use in the Preliminary Prospectus
Supplement or the Prospectus Supplement or any amendment or supplement thereto or in any such application. In case any action shall
be brought against the Company or any other Person so indemnified based on the Registration Statement, the Prospectus, the Preliminary
Prospectus Supplement or the Prospectus Supplement or any amendment or supplement thereto or any application, and in respect of
which indemnity may be sought against such 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 such Underwriter by the provisions
of this Article VI. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company
for any amount in excess of the underwriting discounts and commissions applicable to the Public Shares purchased by such Underwriter.
The Underwriters' obligations in this Section 6.3 to indemnify the Company are several in proportion to their respective underwriting
obligations and not joint.
6.4 Contribution.
(a) Contribution
Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person
entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article
VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may
be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then,
and in each such case, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter,
as incurred, in such proportions that such Underwriter is responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus Supplement bears to the initial offering price appearing thereon and the
Company is responsible for the balance; provided, that, no Person guilty of a 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. For purposes of this Section, each director, officer and employee of such Underwriter or the Company, as applicable,
and each Person, if any, who controls such Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding the provisions
of this Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions
applicable to the Public Shares purchased by such Underwriter. The Underwriters’ obligations in this Section 6.4 to contribute
are several in proportion to their respective underwriting obligations and not joint.
(b) Contribution
Procedure. Within fifteen 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 fifteen 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 without the written consent of such contributing party. The contribution provisions contained in this
Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the
Exchange Act or otherwise available.
ARTICLE VII.
MISCELLANEOUS
7.1 Termination.
(a) Termination
Right. 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 its opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market 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, 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 the Representative’s opinion, make it inadvisable to
proceed with the delivery of the Public Shares, or (vii) if the Company is in material breach of any of its representations,
warranties or covenants hereunder, 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 Shares or to enforce contracts made by the Underwriters for the sale of the Public Shares.
(b) Expenses.
In the event this Agreement shall be terminated pursuant to Section 7.1(a)(vii), within the time specified therein or any extensions
thereof pursuant to the terms herein, the Company shall be obligated to reimburse the Representative for its actual and accountable
out of pocket expenses incurred and directly related to the transactions contemplated herein, including the fees and disbursements
of NMRS, up to $50,000 in the aggregate (provided, however, that such expense cap in no way limits or impairs
the indemnification and contribution provisions of this Agreement), upon presentation by the Representative of appropriate documentation
evidencing the actual payment of such expenses.
(c) 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 Article VI shall not be in any way effected by such
election or termination or failure to carry out the terms of this Agreement or any part hereof.
7.2 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules.
7.3 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or e-mail attachment at the e-mail address set forth on the signature pages attached hereto
at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the e-mail address as set forth
on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto.
7.4 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
7.5 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
7.6 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns.
7.7 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action,
suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either
party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Article VI, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.
7.8 Survival.
The representations and warranties contained herein shall survive the Closing and the Option Closing, if any, and the delivery
of the Public Shares.
7.9 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
7.10 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
7.11 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents
and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy
at law would be adequate.
7.12 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
7.13 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
7.14 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO
THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY
RIGHT TO TRIAL BY JURY.
(Signature Pages Follow)
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 among the Company and the several Underwriters in accordance
with its terms.
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Address for Notice: |
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Sachem Capital Corp. |
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000 Xxxx Xxxxxx |
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Xxxxxxxx, XX 00000 |
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Attention: Xxxx X. Xxxxxxx |
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Copy to: |
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Xxxxxxx Xxxxxxxxx Xxxxxx & Lever, LLC |
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Xxx X. Xxxxxxxx, 00xx Xxxxx |
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Xxxxx Xxxxxx, Xxx Xxxx 00000 |
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Attention: Xxxx X. Xxxxxxxxxxx |
Accepted on the date first above written. |
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|
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aEGIS CAPITAL CORP. |
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By: |
/s/ Xxxxxx Xxxxx |
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Name: |
Xxxxxx Xxxxx |
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Title: |
Co-Head of Investment Banking |
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By: |
/s/ Xxxxx Xxxxx |
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Name: |
Xxxxx Xxxxx |
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Title: |
Co-Head of Investment Banking |
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Address for Notice: |
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|
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Aegis Capital Corp. |
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000 Xxxxxxx Xxxxxx, 00xx Xxxxx |
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Xxx Xxxx, XX 00000 |
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Attention: Syndicate |
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Copy to: |
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Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP |
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000 Xxxxxxxxxxxx Xxxxxx XX, Xxxxx 000 |
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Xxxxxxxxxx, XX 00000 |
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Attention: Xxxxxx X. Xxxxxx |
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Email: xxxx.xxxxxx@xxxxxxxxxxxxx.xxx |
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[Signature Page to Underwriting Agreement]
SCHEDULE I
SCHEDULE
OF UNDERWRITERS
Underwriters | |
Closing
Shares | | |
Closing
Purchase Price | |
Aegis Capital Corp. | |
| 2,000,000 | | |
$ | 9,500,000 | |
Total | |
| 2,000,000 | | |
$ | 9,500,000 | |