UNDERWRITING AGREEMENT
between
VUZIX CORPORATION
and
AEGIS CAPITAL CORP.,
as Representative of the Several Underwriters
VUZIX CORPORATION
UNDERWRITING AGREEMENT
New York, New York
[•], 0000
Xxxxx Capital Corp.
As Representative of the several Underwriters named on Schedule
1 attached hereto
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned, Vuzix
Corporation, a corporation formed under the laws of the State of Delaware (collectively with its subsidiaries and affiliates, including,
without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries
or affiliates of Vuzix Corporation, the “Company”), hereby confirms its agreement (this “Agreement”)
with Aegis Capital Corp. (hereinafter referred to as “you” (including its correlatives) or the “Representative”)
and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the
Representative and such other underwriters being collectively called the “Underwriters” or, individually, an
“Underwriter”) as follows:
1. Purchase
and Sale of Securities.
1.1 Firm
Securities.
1.1.1. Nature
and Purchase of Firm Securities.
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an aggregate of [•] shares (the “Firm Shares”)
of the Company’s common stock, par value $0.001 per share (the “Common Stock”). For each Firm Share issued
and sold by the Company, the Company shall issue and sell to the several Underwriters [•] warrant to purchase [•] share[s]
of Common Stock at an exercise price of [•] per share (each, a “Warrant”), or an aggregate of [•]
([•]) Warrants to purchase an aggregate of [•] ([•]) shares of Common Stock (the “Firm Warrants”).
The Firm Shares and the Firm Warrants may be purchased separately and will be separately tradable immediately upon the issuance
(each, a “Firm Security”) and collectively, the “Firm Securities”).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Securities set forth opposite their
respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $[•] per Firm Share and
$[•] per Firm Warrant.1 The Firm Securities are to be offered initially
to the public at the offering price set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2. Firm
Securities Payment and Delivery.
(i) Delivery
and payment for the Firm Securities shall be made at 10:00 a.m., Eastern time, on the third (3rd) Business Day following
the effective date (the “Effective Date”) of the Registration Statement (as defined in Section 2.1.1 below)
(or the fourth (4th) Business Day following the Effective Date if the Registration Statement is declared effective after
4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices
of Xxxx Xxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (“Representative Counsel”), or at such other place
(or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The
hour and date of delivery and payment for the Firm Securities is called the “Closing Date.”
1
Price per Firm Share and Firm Warrant to be 93% of the public offering price.
(ii) Payment
for the Firm Securities shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of
the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Securities
(or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The
Firm Securities shall be registered in such name or names and in such authorized denominations as the Representative may request
in writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver
the Firm Securities except upon tender of payment by the Representative for all of the Firm Securities. The term “Business
Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized
or obligated by law to close in New York, New York.
1.2 Over-allotment
Option.
1.2.1. Additional
Securities. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Securities,
the Company hereby grants to the Underwriters an option (the “Over-allotment Option”) to purchase up to an additional
[•] ([•]) shares of Common Stock (the “Additional Shares”) and [•] ([•]) Warrants to purchase
an additional [•] ([•]) shares of Common Stock (the “Additional Warrants”) from the Company (representing
15% of the Firm Securities sold in the Offering). The Over-Allotment Option is, at the Underwriters’ sole discretion, for
Additional Shares and Additional Warrants, together, solely Additional Shares, solely Additional Warrants, or any combination thereof
(each an “Additional Security” and collectively, the “Additional Securities”). The Firm Securities
and the Additional Securities are collectively referred to as the “Securities.” The Securities, the shares of
Common Stock underlying the Securities, the Warrants, the shares of Common Stock underlying the Warrants, and the Representative’s
Securities (as defined in Section 1.3.1) are referred to herein collectively as the “Public Securities.”
The Firm Securities shall be issued directly by the Company and shall have the rights and privileges described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus referred to below. The Warrants shall be issued pursuant to, and have
the rights and privileges set forth in a warrant agreement, dated on or before the Closing Date, between the Company and Computershare
Trust Company, N.A., as warrant agent (the “Warrant Agreement”). The offering and sale of the Public Securities
is hereinafter referred to as the “Offering.”
1.2.2. Exercise
of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Additional Securities within forty-five (45) days after the Effective
Date. The purchase price to be paid per Additional Share shall be equal to the price per Firm Share set forth in Section 1.1.1(ii)
hereof. The purchase price to be paid per Additional Warrant shall be equal to the price per Firm Warrant set forth in Section
1.1.1(ii) hereof. The Underwriters shall not be under any obligation to purchase any Additional Securities prior to the exercise
of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company
from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting
forth the number of Additional Securities to be purchased and the date and time for delivery of and payment for the Additional
Securities (the “Option Closing Date”), which such Option Closing Date shall not be later than five (5) full
Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at
the offices of the Representative’s Counsel or at such other place (including remotely by facsimile or other electronic
transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Additional Securities
does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment
Option with respect to all or any portion of the Additional Securities, subject to the terms and conditions set forth herein, (i)
the Company shall become obligated to sell to the Underwriters the number of Additional Securities specified in such notice and
(ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of Additional
Securities then being purchased that the number of Firm Securities as set forth in Schedule 1 opposite the name of such
Underwriter bears to the total number of Firm Securities, subject, in each case, to such adjustments as the Representative, in
its sole discretion, shall determine.
1.2.3. Payment
and Delivery. Payment for the Additional Securities shall be made on the Option Closing Date by wire transfer in Federal (same
day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the
Underwriters) representing the Additional Securities (or through the facilities of DTC) for the account of the Underwriters. The
Additional Securities shall be registered in such name or names and in such authorized denominations as the Representative may
request in writing at least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to
sell or deliver the Additional Securities except upon tender of payment by the Representative for applicable Additional Securities.
The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date
are simultaneous, the term “Closing Date” shall refer to the time and date of delivery of the Firm Securities and Additional
Securities.
1.3 Representative’s
Warrants.
1.3.1. Purchase
Warrants. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date an option
(the “Representative’s Warrant”) for the purchase of an aggregate of [•] ([•]) shares
of Common Stock, which is equal to an aggregate of 5% of the shares of Common Stock underlying the Firm Securities sold in the
Offering (excluding the Firm Warrants sold in the Offering), for an aggregate purchase price of $100.00. The Representative’s
Warrant agreement, in the form attached hereto as Exhibit A (the “Representative’s Warrant Agreement”),
shall be exercisable, in whole or in part, commencing on a date which is one (1) year after the Effective Date and expiring on
the five-year anniversary of the Effective Date at an initial exercise price per share of Common Stock of $[•], which is equal
to 125% of the initial public offering price of each share of Common Stock underlying the Firm Securities. The Representative’s
Warrant Agreement and the shares of Common Stock issuable upon exercise thereof are sometimes hereinafter referred to together
as the “Representative’s Securities.” The Representative understands and agrees that there are significant
restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Warrant Agreement and the underlying shares
of Common Stock during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof shall agree that
it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant Agreement, or any portion thereof,
or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition
of such securities for a period of one hundred eighty (180) days following the Effective Date to anyone other than (i) an Underwriter
or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such
Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.
1.3.2. Delivery.
Delivery of the Representative’s Warrant Agreement shall be made on the Closing Date and shall be issued in the name or names
and in such authorized denominations as the Representative may request.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined
below), as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1 Filing
of Registration Statement.
2.1.1. Pursuant
to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-185661), including any related prospectus
or prospectuses, for the registration of the Public Securities and the Representative’s Securities under the Securities Act
of 1933, as amended (the “Securities Act”), which registration statement and amendment or amendments have been
prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations
of the Commission under the Securities Act (the “Securities Act Regulations”) and will contain all material
statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except
as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration
statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements,
schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a
part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “Rule
430A Information”)), is referred to herein as the “Registration Statement.” If the Company files any
registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration
Statement” shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been
declared effective by the Commission on the date hereof.
Each
prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information
that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary
Prospectus.” The Preliminary Prospectus, subject to completion, dated [•], 2013, that was included in the Registration
Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final
prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.”
Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus
included in the Registration Statement.
“Applicable
Time” means [TIME] [a.m./p.m.], Eastern time, on the date of this Agreement.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined
in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the
Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule
433(d)(5)(i) because it contains a description of the Public Securities or of the Offering that does not reflect the final terms,
in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution
to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona
Fide Electronic Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free
Writing Prospectus.
“Pricing
Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the
Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant
to the Exchange Act. The Common Stock and the Warrants are registered pursuant to Section 12(g) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). The Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock or the Warrants under the Exchange Act, nor has the Company received
any notification that the Commission is contemplating terminating either such registration.
2.2 OTCQB
Marketplace Quotation and TSXV Listing. The shares of Common Stock are quoted, and the Warrants have been approved for quotation,
on the OTCQB U.S. Marketplace (the “OTCQB”) under the symbols “VUZI” and “VUZIW,” respectively,
and the Company has taken no action designed to, or likely to have the effect of, terminating the quotation of either the Common
Stock or the Warrants from the OTCQB, nor has the Company received any notification that the OTCQB or the Financial Indsustry Regulatory
Authority, Inc. (“FINRA”) is contemplating terminating either such quotation. The Company has complied in all
material respects with the applicable requirements of the OTCQB for inclusion of the shares of Common Stock and Warrants thereon.
The shares of Common Stock are listed and posted for trading on the TSX Venture Exchange (the “TSXV”) under
the symbol “VZX” and there are no reports or information that must be filed or made publicly available in connection
with the listing of the Shares on the TSXV under the symbol “VZX” (other than routine post-closing filings) that have
not been filed or made publicly available as required.
2.3 No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any
order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
2.4 Disclosures
in Registration Statement.
2.4.1. Compliance
with Securities Act and 10b-5 Representation.
(i) Each
of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including
the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto,
and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of
the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection
with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits
or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(iii) The
Pricing Disclosure Package, as of the Applicable Time, as of the date of this Agreement, at the Closing Date or at any Option Closing
Date (if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each
Issuer Limited Use Free Writing Prospectus hereto does not conflict with the information contained in the Registration Statement,
any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus,
as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements
made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to
the Underwriters by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus
or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf
of any Underwriter consists solely of the following disclosure contained in the “Underwriting” section of the Prospectus:
[______________] (the “Underwriters’ Information”); and
(iv) Neither
the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of
any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or
will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to the Underwriters’ Information.
2.4.2. Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that
have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company
is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly
executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the
Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability
of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that
the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses
and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default
thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or
both, would constitute a default thereunder. 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 (each, a “Governmental Entity”), including, without limitation, those relating to environmental
laws and regulations.
2.4.3. Prior
Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
2.4.4. Regulations.
The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal,
state, local and all foreign regulation on the Offering and the Company’s business as currently contemplated are correct
in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus which are not so disclosed.
2.5 Changes
After Dates in Registration Statement.
2.5.1. No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse
change in the financial position or results of operations of the Company, nor any change or development that, singularly or in
the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets or prospects of the Company (a “Material Adverse Change”);
(ii) there have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement;
and (iii) no officer or director of the Company has resigned from any position with the Company.
2.5.2. Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities
or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or
made any other distribution on or in respect to its capital stock.
2.6 Disclosures
in Commission Filings. Since December 8, 2009, (i) none of the Company’s filings with the Commission contained any untrue
statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and (ii) the Company has made all filings with the Commission
required under the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the “Exchange
Act Regulations”).
2.7 Independent
Accountants. To the knowledge of the Company, EFP Xxxxxxxxx, LLP (the “Auditor”), whose report is filed
with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting
Oversight Board. The Auditor has not, during the periods covered by the financial statements included in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used
in Section 10A(g) of the Exchange Act.
2.8 Financial
Statements, etc. The financial statements, including the notes thereto and supporting schedules included in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, fairly present the financial position and the results of operations
of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity
with U.S. generally accepted accounting principles (“GAAP”), consistently applied throughout the periods involved
(provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material
in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. Except as included therein, no historical or pro forma
financial statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus
under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the
related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly
compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and
present fairly the information shown therein, and the assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained
in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act
and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including
contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material
current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity,
capital expenditures, capital resources, or significant components of revenues or expenses. Except as
disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of
its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively, the
“Subsidiaries”), has incurred any material liabilities or obligations, direct or contingent, or entered into
any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends
or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the capital stock
of the Company or any of its Subsidiaries, or, other than in the ordinary course of business, any grants under any stock compensation
plan, and (d) there has not been any material adverse change in the Company’s long-term or short-term debt.
2.9 Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date
the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the
Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any
Option Closing Date, there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized,
but unissued shares of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the
Company, or any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible
securities.
2.10 Valid
Issuance of Securities, etc.
2.10.1. Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted
by the Company. The authorized shares of Common Stock conform in all material respects to all statements relating thereto contained
in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding shares
of Common Stock were at all relevant times either registered under the Securities Act and the applicable state securities or “blue
sky” laws or, based in part on the representations and warranties of the purchasers of such shares, exempt from such registration
requirements.
2.10.2. Securities
Sold Pursuant to this Agreement. The Public Securities and Representative’s Securities have been duly authorized
for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof
are not and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative’s
Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public
Securities and Representative’s Securities has been duly and validly taken. The Public Securities and Representative’s
Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. When paid for and issued in accordance with the Representative’s Warrant and
the Representative’s Warrant Agreement, the underlying shares of Common Stock will be validly issued, fully paid and non-assessable;
the holders thereof are not and will not be subject to personal liability by reason of being such holders; the underlying shares
of Common Stock are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale
of the Representative’s Warrant Agreement has been duly and validly taken. All corporate action required to be taken for
the authorization, issuance and sale of the Warrants and entry into the Warrant Agreement has been duly and validly taken; the
shares of Common Stock issuable upon exercise of the Warrants have been duly authorized and reserved for issuance by all necessary
corporate action on the part of the Company and when paid for and issued in accordance with the Warrants and the Warrant Agreement,
such shares of Common Stock will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be
subject to personal liability by reason of being such holders; and such shares of Common Stock are not and will not be subject
to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company.
2.11 Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the
Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include
any such securities in a registration statement to be filed by the Company.
2.12 Validity
and Binding Effect of Agreements. This Agreement, the Warrants, the Warrant Agreement and the Representative’s Warrant
Agreement have been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid
and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except:
(i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal
and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief
may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
2.13 No
Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Warrants, the Warrant Agreement
and the Representative’s Warrant Agreement and all ancillary documents, the consummation by the Company of the transactions
herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or
without the giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict with any of the
terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or imposition
of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any agreement or instrument
to which the Company is a party; (ii) result in any violation of the provisions of the Company’s Certificate of Incorporation
(as the same may be amended or restated from time to time, the “Charter”) or the by-laws of the Company; or
(iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the
date hereof.
2.14 No
Defaults; Violations. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no material default exists in the due performance and observance of any term, covenant or condition of any material license, contract,
indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be
bound or to which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision
of its Charter or by-laws, or in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree
of any Governmental Entity.
2.15 Corporate
Power; Licenses; Consents.
2.15.1. Conduct
of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business
purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.15.2. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained.
No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid
issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated by this
Agreement, the Warrants, the Warrant Agreement and the Representative’s Warrant Agreement and as contemplated by the
Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable federal and state
securities laws and the rules and regulations of the FINRA and the TSXV.
2.16 D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
as supplemented by all information concerning the Company’s directors, officers and principal shareholders as described in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined
in Section 2.25 below), provided to the Underwriters is true and correct in all material respects and the Company has not become
aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and
incorrect.
2.17 Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus or in connection with the listing of the Public Securities on the TSXV.
2.18 Good
Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under the laws
of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to
qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.19 Insurance.
The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe
that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change.
2.20 Transactions
Affecting Disclosure to FINRA.
2.20.1. Finder’s
Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims,
payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee
by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements
or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.20.2. Payments
Within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any
direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Effective Date,
other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.20.3. Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.20.4. FINRA
Affiliation. There is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class of the Company's
securities or (iii) beneficial owner of the Company's unregistered equity securities which were acquired during the 180-day period
immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating
in the Offering (as determined in accordance with the rules and regulations of FINRA).
2.20.5. Information.
All information provided by the Company in its FINRA Questionnaire to Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete
in all material respects.
2.21 Foreign
Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries,
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate
for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company
(or assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty
in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material
Adverse Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects
of the Company. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to
cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.
2.22 Compliance
with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”),
and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.23 Money
Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with
respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
2.24 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.25 Lock-Up
Agreements. Schedule 3-A hereto contains a complete and accurate list of the Company’s officers, directors and
each owner of at least 5% of the Company’s outstanding shares of Common Stock (or securities convertible or exercisable into
shares of Common Stock) (collectively, the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties
to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto as Exhibit B (the
“Lock-Up Agreement”), prior to the execution of this Agreement.
2.26 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization
or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the
conduct of business requires such qualification, except where the failure to qualify would not result in a Material Adverse Change.
The Company’s ownership and control of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
2.27 Related
Party Transactions. There are no business relationships or related party transactions involving the Company or any other person
required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described
as required.
2.28 Board
of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing
Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members and
the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Xxxxxxxx-Xxxxx Act of 2002
and the rules promulgated thereunder (the “Xxxxxxxx-Xxxxx Act”) applicable to the Company and the listing rules
of the TSXV. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee
financial expert,” as such term is defined under Regulation S-K.
2.29 Xxxxxxxx-Xxxxx
Compliance.
2.29.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that comply with Rule 13a-15
or 15d-15 under the Exchange Act Regulations. As disclosed in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, such controls and procedures are not effective to ensure that all material information concerning the Company will
be made known on a timely basis to the individuals responsible for the preparation of the Company’s Exchange Act filings
and other public disclosure documents.
2.29.2. Compliance.
The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Xxxxxxxx-Xxxxx
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions
of the Xxxxxxxx-Xxxxx Act.
2.30 Accounting
Controls. The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as
defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act
and have been designed by, or under the supervision of, their respective principal executive and principal financial officers,
or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general
or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls. The
Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant
deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known to
the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’
ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s management,
whether or not material, that involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting.
2.31 No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, an “investment
company,” as defined in the Investment Company Act of 1940, as amended.
2.32 No
Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries
exists or, to the knowledge of the Company, is imminent.
2.33 Intellectual
Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and similar rights (“Intellectual Property Rights”) necessary for the conduct of the
business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries
necessary for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus
will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Except
as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, neither the Company nor any of its
Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights
of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change
(A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual
Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding
or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware
of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with
any other claims in this Section 2.33, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property
Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have
not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or,
to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim
that would, individually or in the aggregate, together with any other claims in this Section 2.33, reasonably be expected to result
in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other
proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other
facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other
claims in this Section 2.33, reasonably be expected to result in a Material Adverse Change; and (E) to the Company’s knowledge,
no employee of the Company is in or has ever been in violation in any material respect of any term of any employment contract,
patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s
employment with the Company, or actions undertaken by the employee while employed with the Company and could reasonably be expected
to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s knowledge, all material technical
information developed by and belonging to the Company which has not been patented has been kept confidential. The Company is not
a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person
or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and
are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material
respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company
has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of the rights of any persons.
2.34 Taxes.
Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries
has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed
against the Company or such respective Subsidiary, except where any such failure to pay taxes would, singularly or in the aggregate,
reasonably be expected to result in a Material Adverse Change. The provisions for taxes payable, if any, shown on the financial
statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not
disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing
to the Underwriters, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any
of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term “taxes”
means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together
with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns”
means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
2.35 ERISA
Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material
respects with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”) of which the Company is a member. No “reportable event”
(as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or
maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have
any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates
has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification.
2.36 Compliance
with Laws. The Company: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable
to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion,
sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company (“Applicable
Laws”), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change;
(B) has not received any warning letter, untitled letter or other correspondence or notice from any governmental authority alleging
or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits
and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (C) possesses
all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation of
any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any governmental authority or third party alleging that any product operation or
activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or
third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received
notice that any governmental authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations
and has no knowledge that any such governmental authority is considering such action; (F) has filed, obtained, maintained or submitted
all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required
by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments were complete and correct on the date filed (or were corrected or supplemented by a subsequent submission);
and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued,
any recall, market withdrawal or replacement, safety alert, post sale warning, “or other notice or action relating to the
alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company’s knowledge,
no third party has initiated, conducted or intends to initiate any such notice or action.
2.37 Ineligible
Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness
of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities
and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking
account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an
ineligible issuer.
2.38 Smaller
Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act.
2.39 Industry
Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable
and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.40 Margin
Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause
any of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of
the Federal Reserve Board.
3. Covenants
of the Company. The Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to
the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement
to which the Representative shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will
notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt
of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public
Securities and Representative’s Securities for offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning
the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities
Act in connection with the Offering of the Public Securities and Representative’s Securities. The Company shall effect all
filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule
424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company shall use its reasonable best efforts to prevent the issuance of any
stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2. Continued
Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange
Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and
in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to
the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company,
to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
(ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or
the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to
a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus,
as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company
will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies
of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company
shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably
object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters
may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the
Exchange Act Regulations within 48 hours prior to the Applicable Time; the Company will give the Representative notice of its intention
to make any such filing from the Applicable Time to the Closing Date and will furnish the Representative with copies of any such
documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document
to which the Representative or counsel for the Underwriters shall reasonably object.
3.2.3. Filing
of Final Prospectus. The Company shall file the Prospectus (in form and substance satisfactory to the Representative) with
the Commission pursuant to the requirements of Rule 424 of the Securities Act Regulations.
3.2.4. Exchange
Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its reasonable best
efforts to maintain the registration of each of the Common Stock and the Warrants under the Exchange Act. The Company shall not
deregister the Common Stock or the Warrants under the Exchange Act without the prior written consent of the Representative.
3.2.5. Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall
not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission
or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General
Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i)
that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such
free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto,
including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of
an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the
Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally
filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and
each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each
Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by
Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
3.5 Effectiveness
and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement
to remain effective with a current prospectus for at least nine (9) months after the Applicable Time and shall use its commercially
reasonable efforts to cause the Registration Statement to remain effective until such time as all of the Warrants have been exercised
or terminated, and shall notify the Representative immediately and confirm the notice in writing: (i) of the effectiveness
of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission
of any proceedings for the suspension of the qualification of the Common Stock, Warrants and Securities for offering or sale in
any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery
to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt
of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during
the period described in this Section 3.5 that, in the judgment of the Company, makes any statement of a material fact made in the
Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a)
the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or
the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company
shall make every reasonable effort to obtain promptly the lifting of such order.
3.6 Review
of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense, shall
cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial
statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7 OTCQB
Quotation. For at least three years from the date of this Agreement, the Company shall use its commercially reasonable efforts
to (i) maintain the inclusion of each of the shares of Common Stock and the Warrants (including the Public Securities) for quotation
on the OTCQB or (ii) have such securities listed on a national securities exchange.
3.8 Financial
Public Relations Firm. As of the Effective Date, the Company shall have retained a financial public relations firm reasonably
acceptable to the Representative and the Company, which shall initially be IRTH Communications, LLC, which firm shall be experienced
in assisting issuers in initial public offerings of securities and in their relations with their security holders, and shall retain
such firm or another firm reasonably acceptable to the Representative for a period of not less than two (2) years after the Effective
Date.
3.9 Reports
to the Representative.
3.9.1. Periodic
Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish to the Representative
copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally
to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report the
Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every
press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii)
a copy of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration statement filed by the Company
under the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of any
future subsidiaries of the Company as the Representative may from time to time reasonably request; provided the Representative
shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to
the Representative and Representative Counsel in connection with the Representative’s receipt of such information. Documents
filed with the Commission pursuant to its XXXXX system shall be deemed to have been delivered to the Representative pursuant to
this Section 3.9.1.
3.9.2. Transfer
Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer
agent and registrar acceptable to the Representative (the “Transfer Agent”) and shall furnish to the Representative
at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Computershare Shareowner Services
is acceptable to the Representative to act as Transfer Agent for the shares of Common Stock.
3.9.3. Warrant
Agent. For so long as the Warrants are outstanding, the Company shall retain a warrant agent for the Warrants reasonably acceptable
to the Representative (the “Warrant Agent”). Computershare Trust Company, N.A. is reasonably acceptable to the
Representative to act as Warrant Agent for the Warrants.
3.9.4. Trading
Reports. During such time as the Public Securities are quoted on the OTCQB, the Company shall provide to the
Representative, at the Company’s expense, such reports published by the OTCQB relating to price quotations of the Public
Securities, as the Representative shall reasonably request.
3.10 Payment
of Expenses
3.10.1. General
Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date,
if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company
under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration
of the Securities to be sold in the Offering (including the Additional Securities) with the Commission; (b) all Public Filing System
filing fees associated with the review of the Offering by FINRA (and the reasonable fees of FINRA counsel, but only up to $15,000);
(c) all fees and expenses relating to the quotation of such Public Securities on the OTCQB and on the TSXV and such other stock
exchanges as the Company and the Representative together determine; (d) all fees, expenses and disbursements relating to background
checks of the Company’s officers and directors in an amount not to exceed $5,000 per individual and $15,000 in the aggregate;
(e) all fees, expenses and disbursements relating to the registration or qualification of the Public Securities under the “blue
sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without
limitation, all filing and registration fees, it being agreed that if the Offering is commenced on the Nasdaq Global Market, Nasdaq
Global Select Market or the NYSE MKT, the Company shall make a payment of $5,000 to such counsel at Closing, or if the Offering
is commenced on the Nasdaq Capital Market or on the OTCQB, the Company shall make a payment of $15,000 to such counsel upon the
commencement of “blue sky” work by such counsel and an additional $5,000 at Closing); (f) all fees, expenses and disbursements
relating to the registration, qualification or exemption of the Public Securities under the securities laws of such foreign jurisdictions
as the Representative may reasonably designate; (g) the costs of all mailing and printing of the underwriting documents (including,
without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected
Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all
amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably
deem necessary; (h) the costs and expenses of the public relations firm; (i) the costs of preparing, printing and delivering certificates
representing the Public Securities; (j) fees and expenses of the transfer agent for the shares of Common Stock; (k) stock transfer
and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (l) the costs associated
with commemorative mementos and lucite tombstones, each of which the Company or its designee shall provide within a reasonable
time after the Closing in such quantities as the Representative may reasonably request; (m) the fees and expenses of the Company’s
accountants; (n) the reasonable fees and expenses of the Company’s legal counsel and other agents and representatives; (o)
the $21,775 cost associated with the Underwriters’ use of Ipreo’s book-building, prospectus tracking and compliance
software for the Offering; and (q) up to $20,000 of the Underwriter’s actual accountable “road show” expenses
for the Offering. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date,
or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters.
3.10.2. Non-accountable
Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date
it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense
allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Securities, less the
Advance (as such term is defined in Section 8.3 hereof), provided, however, that in the event that the Offering is terminated,
the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.
3.11 Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
3.12 Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an
earnings statement (which need not be certified by an independent registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative)
has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Public Securities.
3.14 Internal
Controls. The Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
3.15 Accountants.
As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable
to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting
firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor
is acceptable to the Representative.
3.16 FINRA.
The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i)
any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company's securities or (iii)
any beneficial owner of the Company's unregistered equity securities which were acquired during the 180 days immediately preceding
the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the
Offering (as determined in accordance with the rules and regulations of FINRA).
3.17 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in
a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this Agreement.
3.18 Company
Lock-Up Agreements.
3.18.1. Restriction
on Sales of Capital Stock. Other than the issuances described on Schedule 3-B hereto, the Company, on behalf of itself
and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of three
(3) months after the Effective Date (the “Lock-Up Period”), (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend,
or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible
into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or cause to be filed any registration
statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible
into or exercisable or exchangeable for shares of capital stock of the Company; or (iii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company,
whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock
of the Company or such other securities, in cash or otherwise.
The restrictions contained
in this Section 3.18.1 shall not apply to (i) the Securities to be sold hereunder (including the underlying shares of Common Stock
and Warrants and the filing of an amendment to the Registration Statement on Form S-3 to register the shares of Common Stock issuable
upon exercise of the Warrants), (ii) the issuance by the Company of shares of Common Stock upon the exercise of a stock option
or warrant or the conversion of a security outstanding on the date hereof, of which the Representative has been advised in writing
or (iii) the issuance by the Company of stock options or shares of capital stock of the Company under any equity compensation plan
of the Company.
Notwithstanding the foregoing,
if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event
relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release
earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last
day of the Lock-Up Period, the restrictions imposed by this Section 3.18.1 shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable,
unless the Representative waives, in writing, such extension.
3.18.2. Restriction
on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and
any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 12 months
after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer
to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.
3.19 Release
of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth
in the Lock-Up Agreements described in Section 2.25 hereof for an officer or director of the Company and provide the Company with
notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver,
the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C
hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20 Blue
Sky Qualifications. The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify
the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the
distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
3.21 Reporting
Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations.
Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under
Rule 463 under the Securities Act Regulations.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided
herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof
and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the
following conditions:
4.1 Regulatory
Matters.
4.1.1. Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:00 p.m.,
Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at each
of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or,
to the Company’s knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the
Commission for additional information. The Prospectus containing the Rule 430A Information shall have been filed with the Commission
in the manner and within the time frame required by Rule 424(b) under the Securities Act Regulations (without reliance on Rule
424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the
Commission in accordance with the requirements of Rule 430A under the Securities Act Regulations.
4.1.2. FINRA
Clearance. By the Effective Date, the Representative shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. OTCQB
Quotation. On the Closing Date, each of the Company’s Common Stock and the Warrants (including the shares of Common Stock
underlying the Additional Securities and the Warrants underlying the Additional Securities), shall be quoted on the OTCQB. On the
first Option Closing Date (if any), each of the Company’s Common Stock and the Warrants (including the Common Stock underlying
the Additional Securities and the Warrants underlying the Additional Securities), shall be quoted on the OTCQB.
4.2 Company
Counsel Matters.
4.2.1. Closing
Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion of Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP, counsel to the Company, dated the Closing Date and addressed to the Representative, substantially in the
form of Exhibit D attached hereto.
4.2.2. Closing
Date Opinion of Corporate Counsel for the Company. On the Closing Date, the Representative shall have received the favorable
opinion of Xxxxx Xxxxxx Xxxxxx LLP, counsel to the Company, dated
the Closing Date and addressed to the Representative, substantially in the form of Exhibit E attached hereto.
4.2.3. Option
Closing Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable
opinions of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and
in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made
by such counsels in their respective opinions delivered on the Closing Date.
4.2.4. Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws
of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of
other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact,
to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Representative Counsel if requested. The opinion of Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP and any opinion relied upon by Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP shall include a statement to the effect
that it may be relied upon by Representative Counsel in its opinion delivered to the Underwriters.
4.3 Comfort
Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter containing statements
and information of the type customarily included in accountants’ comfort letters with respect to the financial statements
and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed
to the Representative and in form and substance satisfactory in all respects to you and to the Auditor, dated as of the
date of this Agreement.
4.3.2. Bring-down
Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from
the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms
the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date
not more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.
4.4 Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing
Date (if such date is other than the Closing Date), of its Executive Chairman of the Board, its Chief Executive Officer, its President
and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, the Pricing
Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and
each amendment thereto, as of the Applicable Time and as of the date of this Agreement and as of the Closing Date (or any Option
Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing
Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than
the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if
such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof
and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since
the Effective Date, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement,
the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the
Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the
Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other
than the Closing Date), and (iv) there has not been, subsequent to the date of the most recent audited financial statements included
or incorporated by reference in the Pricing Disclosure Package, any material adverse change in the financial position or results
of operations of the Company, or any change or development that, singularly or in the aggregate, would involve a material adverse
change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company, except as set forth in the Prospectus.
4.4.2. Secretary’s
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively,
certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full
force and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full
force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company
or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to
in such certificate shall be attached to such certificate.
4.5 No
Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have
been no Material Adverse Change or development involving a prospective Material Adverse Change from the latest dates as of which
such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action,
suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Insider before or by
any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding
may materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as
set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have
been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and
(iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto
shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities
Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations,
and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto
shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading.
4.6 Delivery
of Agreements.
4.6.1. Effective
Date Deliveries. On the Effective Date, the Company shall have delivered to the Representative executed copies of the Lock-Up
Agreements from each of the persons listed in Schedule 3-A hereto.
4.6.2. Closing
Date Deliveries. On the Closing Date, the Company shall have delivered to the Representative executed copies of the Warrants,
the Warrant Agreement and the Representative’s Warrant Agreement.
4.7 Additional
Documents. At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with
such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the
Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities
and the Representative’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative
and Representative Counsel.
5. Indemnification.
5.1 Indemnification
of the Underwriters.
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates and
each of its and their respective directors, officers, members, employees, representatives and agents and each person, if any, who
controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively
the “Underwriter Indemnified Parties,” and each an “Underwriter Indemnified Party”), against
any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses
reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever,
whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter
Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act,
the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement, the Pricing
Disclosure Package, the Preliminary Prospectus, the Prospectus, in any Issuer Free Writing Prospectus (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, 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
Section 5, collectively called “application”) executed by the Company or based upon written information furnished
by the Company in any jurisdiction in order to qualify the Public Securities and Representative’s Securities under the securities
laws thereof or filed with the Commission, any state securities commission or agency, the OTCQB, FINRA, or any national securities
exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, the Underwriters’ Information. With respect to any untrue statement or
omission or alleged untrue statement or omission made in the Pricing Disclosure Package, the indemnity agreement contained in this
Section 5.1.1 shall not inure to the benefit of any Underwriter Indemnified Party to the extent that any loss, liability, claim,
damage or expense of such Underwriter Indemnified Party results from the fact that a copy of the Prospectus 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
Securities to such person as required by the Securities Act and the Securities Act Regulations, and if the untrue statement or
omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by
the Company with its obligations under Section 3.3 hereof.
5.1.2. Procedure.
If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of
such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the
reasonable approval of such Underwriter Indemnified Party) and payment of actual expenses. Such Underwriter Indemnified Party shall
have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter Indemnified Party 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 the Underwriter
Indemnified Party (in addition to local counsel) shall be borne by the Company. Notwithstanding anything to the contrary contained
herein, if any Underwriter Indemnified Party 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.
5.2 Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and persons 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 the several Underwriters, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure
Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity
with, the Underwriters’ Information. In case any action shall be brought against the Company or any other person so indemnified
based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment
or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter
shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights
and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative
of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection
with the issuance and sale of the Public Securities or in connection with the Registration Statement, the Pricing Disclosure Package,
the Prospectus, or any Issuer Free Writing Prospectus.
5.3 Contribution.
5.3.1. Contribution
Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, from the Offering of the Public Securities, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect
to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters,
on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering
of the Public Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the
table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the Securities purchased under this Agreement, as set forth in the table on the cover page of the
Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant
to this Section 5.3.1 were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount in excess of the amount
by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offering of the Public
Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify
the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be
liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party
seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution
without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended
to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise
available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3 are several and not joint.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Securities or Additional Securities. If any Underwriter or Underwriters shall default in its or their
obligations to purchase the Firm Securities or the Additional Securities, if the Over-allotment Option is exercised hereunder,
and if the number of the Firm Securities or Additional Securities with respect to which such default relates does not exceed in
the aggregate 10% of the number of Firm Securities or Additional Securities that all Underwriters have agreed to purchase hereunder,
then such Firm Securities or Additional Securities to which the default relates shall be purchased by the non-defaulting Underwriters
in proportion to their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Securities or Additional Securities. In the event that the default addressed in Section 6.1 relates to
more than 10% of the Firm Securities or Additional Securities, you may in your discretion arrange for yourself or for another party
or parties to purchase such Firm Securities or Additional Securities to which such default relates on the terms contained herein.
If, within one (1) Business Day after such default relating to more than 10% of the Firm Securities or Additional Securities, you
do not arrange for the purchase of such Firm Securities or Additional Securities, then the Company shall be entitled to a further
period of one (1) Business Day within which to procure another party or parties satisfactory to you to purchase said Firm Securities
or Additional Securities on such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Securities
or Additional Securities to which a default relates as provided in this Section 6, this Agreement will automatically be terminated
by you or the Company without liability on the part of the Company (except as provided in Sections 3.9 and 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Additional
Securities, this Agreement will not terminate as to the Firm Securities; and provided, further, that nothing herein shall relieve
a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default
hereunder.
6.3 Postponement
of Closing Date. In the event that the Firm Securities or Additional Securities to which the default relates are to be purchased
by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have
the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5)
Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure
Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to
the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter
may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such shares of Common
Stock.
7. Additional
Covenants.
7.1 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members
of the Board of Directors and the overall composition of the Board comply with the Xxxxxxxx-Xxxxx Act, with the Exchange Act and
with the listing rules of the TSXV and any national securities exchange, in the event the Company seeks to have its Public Securities
listed on a national securities exchange and (ii) if applicable, at least one member of the Audit Committee of the Board of
Directors qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st)
Business Day following the fortieth (40th) day after the Closing Date, other than normal and customary releases issued
in the ordinary course of the Company’s business.
7.3 Right
of First Refusal. Provided that the Firm Securities are sold in accordance with the terms of this Agreement, the Representative
shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of nine (9) months
after the date of effectiveness of the Registration Statement, to act as lead or managing underwriter, exclusive placement agent,
exclusive financial advisor or in any other similar capacity, on the Representative’s customary terms and conditions, in
the event the Company or any Subsidiary retains or otherwise uses (or seeks to retain or use) the services of an investment bank
or similar financial advisor to pursue a registered, underwritten public offering of securities (in addition to the Offering),
a private placement of securities, a merger, acquisition of another company or business, change of control, sale of substantially
all assets or other similar transaction (regardless of whether the Company would be considered an acquiring party, a selling party
or neither in such transaction) (each, a “Subject Transaction”). The Company shall notify the Representative
of its intention to pursue a Subject Transaction, including the material terms thereof, by providing written notice thereof by
registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise its Right
of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written notice,
then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may elect,
in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided
that any such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with
respect to any other Subject Transaction. The terms and conditions of any such engagements shall be set forth in separate agreements
and may be subject to, among other things, satisfactory completion of due diligence by the Representative, market conditions, the
absence of a material adverse change to the Company’s business, financial condition and prospects, approval of the Representative’s
internal committee and any other conditions that the Representative may deem appropriate for transactions of such nature. Notwithstanding
the foregoing, in the event the Subject Transaction involves a public or private sale of securities, the Representative shall be
entitled to receive as its compensation at least 50% of the compensation payable to the underwriting or placement agent group when
serving as co-manager or co-placement agent and at least 33% of the compensation payable to the underwriting or placement agent
group when serving as co-manager or co-placement agent with respect to a proposed financing in which there are three co-managing
or lead underwriters or co-placement agents. The Representative will not have more than one (1) opportunity to waive or terminate
the Right of First Refusal in consideration of any payment or fee.
7.4 Underwriter
Covenant. The Underwriters agree and confirm that they have not and will not make any offer or sale of the Firm Securities
or Additional Securities in any of the provinces or territories of Canada. Additionally and notwithstanding the foregoing, the
Underwriters agree and confirm that no action has been taken or will be taken (i) for the purpose of, or that could reasonably
be expected to have the effect of, preparing the market in any province or territory of Canada, or creating a demand in any province
or territory of Canada, for the securities being distributed or (ii) that would permit a public offering of the Firm Securities
or Additional Securities in any province or territory of Canada.
8. Effective
Date of this Agreement and Termination Thereof.
8.1 Effective
Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
8.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic
or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially
disrupt, general securities markets in the United States; or (ii) if trading or quotation on the New York Stock Exchange,
the Nasdaq Stock Market LLC or the OTCQB 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 your opinion,
make it inadvisable to proceed with the delivery of the Firm Securities or Additional Securities; 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 Securities or to enforce contracts made by the Underwriters for the sale
of the Public Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein
or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees
and disbursements of Representative Counsel) up to $100,000, inclusive of the $25,000 advance for out-of-pocket accountable expenses
previously paid by the Company to the Representative (the “Advance”) and upon demand the Company shall pay the
full amount thereof to the Representative on behalf of the Underwriters; provided,
however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement.
Notwithstanding the foregoing, any advance received by the Representative will be reimbursed to the Company to the extent not actually
incurred in compliance with FINRA Rule 5110(f)(2)(C).
8.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and
shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part
hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9. Miscellaneous.
9.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be
deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
Aegis Capital Corp.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxx Xxxxxx, Managing Director of Investment Banking
Fax No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx-Xxxxxx Xxxxxx, Esq.
Fax No.: 000-000-0000
If to the Company:
Vuzix Corporation
0000 Xxxxxxxx Xxxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, CEO
Fax No: 000-000-0000
with a copy (which shall not constitute notice) to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
00 Xxxxxxxx, 00x Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Fax No: 000-000-0000
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms
and conditions of that certain engagement letter between the Company and Aegis Capital Corp., dated October 1, 2012, as amended,
shall remain in full force and effect.
9.5 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors
and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.6 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that
any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced
in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to
such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal
and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating
to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
9.7 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission
shall constitute valid and sufficient delivery thereof.
9.8 Waiver,
etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof
or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance
or non-fulfillment.
[Signature Page
Follows]
If the foregoing correctly
sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
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Very truly yours, |
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VUZIX CORPORATION |
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By: |
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Name: |
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Title: |
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Confirmed as of the date first written above mentioned,
on behalf of itself and as Representative of the several Underwriters named on Schedule 1 hereto:
AEGIS CAPITAL CORP.
Very truly yours, |
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VUZIX CORPORATION |
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By: |
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Name: |
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Title: |
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[Signature
Page]
vuzix
Corporation – Underwriting Agreement
SCHEDULE 1
Underwriter |
Total Number of Firm Shares to be Purchased |
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Number of Additional Shares to be Purchased if the Over-Allotment Option is Fully Exercised |
Aegis Capital Corp. |
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TOTAL |
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Underwriter |
Total Number of Firm Warrants to be Purchased |
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Number of Additional Warrants to be Purchased if the Over-Allotment Option is Fully Exercised |
Aegis Capital Corp. |
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TOTAL |
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SCHEDULE 2-A
Pricing Information
Number of Firm Shares: [•]
Number of Firm Warrants: [•]
Number of Additional Warrants: [•]
Number of Additional Shares: [•]
Warrant Exercise Price: $[•]
Public Offering Price per Share: $[•]
Underwriting Discount per Share: $[•]
Underwriting Non-accountable expense allowance per Share: $[•]
Proceeds to Company per Share (before expenses): $[•]
Public Offering Price per Warrant: $[•]
Underwriting Discount per Warrant: $[•]
Proceeds to Company per Warrant (before expenses): $[•]
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
[None.]
SCHEDULE 3-A
List of Lock-Up Parties2
Xxxx Xxxxxxx
Grant Xxxxxxx
Xxxxxxx Xxx
Xxxxxxx Xxxxx
Xxxxxxxxx Ruchdaeschel
Xxxxxxx XxXxxxxxx
LC Capital Master Fund Ltd.
Kopin Corporation
Vast Technologies, Inc.
SCHEDULE 3-B
Lock-Up Issuances
[●] shares to be issued to Vast Technologies, Inc. pursuant
to [●]
[●] shares to be issued to Kopin Corporation pursuant
to [●]
[●] shares to be issued to LC Capital Master Fund Ltd.
pursuant to [●]
[●] shares to be issued to Xxxx Xxxxxxx (Note Conversions
and Deferred Compensation Payments) pursuant to [●]
[●] shares to be issued to Xxxxx Xxxxxxx (Deferred Compensation)
pursuant to [●]
[●] shares to be issued to Hillair Capital Investments
LP pursuant to [●]
EXHIBIT A
Form of Representative’s Warrant
Agreement
THE REGISTERED HOLDER
OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT
AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR
HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
OTHER THAN (I) AEGIS CAPITAL CORP. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE
OFFICER OR PARTNER OF AEGIS CAPITAL CORP. OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT
IS NOT EXERCISABLE PRIOR TO [________________] [DATE THAT IS ONE YEAR FROM THE EFFECTIVE DATE OF THE OFFERING]. VOID AFTER
5:00 P.M., EASTERN TIME, [___________________] [DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING].
COMMON STOCK PURCHASE WARRANT
For the Purchase of [_____] Shares of Common
Stock
of
VUZIX CORPORATION
1. Purchase
Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Aegis Capital Corp. (“Holder”),
as registered owner of this Purchase Warrant, to Vuzix Corporation, a Delaware corporation (the “Company”),
Holder is entitled, at any time or from time to time from [________________] [DATE THAT IS ONE YEAR FROM THE EFFECTIVE DATE
OF THE OFFERING] (the “Commencement Date”), and at or before 5:00 p.m.,
Eastern time, [____________] [DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING] (the ”Expiration Date”),
but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to [____] shares of common stock of the Company,
par value $0.001 per share (the “Shares”), subject to adjustment as provided in Section 6 hereof. If the Expiration
Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the
next succeeding day that is not such a day in accordance with the terms herein. During the period ending on the Expiration Date,
the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable
at $[___] per Share [125% of the price of the Shares sold in the Offering]; provided, however, that upon the
occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase Warrant, including the exercise
price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise
Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context.
2. Exercise.
2.1 Exercise
Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and
delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased
payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or
official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time,
on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented
hereby shall cease and expire.
2.2 Cashless
Exercise. If at any time after the Commencement Date there is no effective registration statement registering, or no
current prospectus available for, the resale of the Shares by the Holder, and so long as not prohibited by the rules and policies
of the TSX Venture Exchange or any other exchange on which the Company’s Shares are then
listed at such time, then in lieu of exercising this Purchase Warrant by payment of cash or check payable to the order of the Company
pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or
the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form attached
hereto, in which event the issue to Holder, Shares in accordance with the following formula:
X |
= |
Y(A-B) |
|
A |
|
Where, |
|
|
|
|
X |
= |
The number of Shares to be issued to Holder; |
|
Y |
= |
The number of Shares for which the Purchase Warrant is being exercised; |
|
A |
= |
The fair market value of one Share; and |
|
B |
= |
The Exercise Price. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
purposes of this Section 2.2, the fair market value of a Share is defined as follows:
| (i) | if the Company’s common stock is traded on a
securities exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being submitted
in connection with the exercise of the Purchase Warrant; or |
| (ii) | if the Company’s
common stock is actively traded over-the-counter, the value shall be deemed to be the closing bid prior to the exercise form being
submitted in connection with the exercise of the Purchase Warrant; if there is no active public market, the value shall be the
fair market value thereof, as determined in good faith by the Company’s Board of Directors. |
2.3 Legend.
Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities
have been registered under the Securities Act of 1933, as amended (the “Act”):
“The securities
represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”),
or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from registration
under the Securities Act and applicable state law which, in the opinion of counsel to the Company, is available.”
3. Transfer.
3.1 General
Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder
will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant for a period of one hundred eighty (180) days
following the Effective Date to anyone other than: (i) Aegis Capital Corp. (“Aegis”) or an underwriter or a
selected dealer participating in the Offering, or (ii) a bona fide officer or partner of Aegis or of any such underwriter or selected
dealer, in each case in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause this Purchase Warrant or the securities issuable
hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective
economic disposition of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(g)(2). On
and after 180 days after the Effective Date, transfers to others may be made subject to compliance with or exemptions from applicable
securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall
execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing
the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated
by any such assignment.
3.2 Restrictions
Imposed by the Securities Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until:
(i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption
from registration under the Securities Act and applicable state securities laws, the availability of which is established to the
reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Xxxx Xxxxx LLP shall be deemed satisfactory
evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration
Statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities
and Exchange Commission (the ”Commission”) and compliance with applicable state securities law has been
established.
4. Registration
Rights.
4.1 Demand
Registration.
4.1.1 Grant
of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the Purchase
Warrants and/or the underlying Shares (“Majority Holders”), agrees to register, on one occasion, all or any portion
of the Shares underlying the Purchase Warrants (collectively, the “Registrable Securities”). On such occasion,
the Company will file a registration statement with the Commission covering the Registrable Securities within sixty (60) days after
receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective promptly thereafter,
subject to compliance with review by the Commission; provided, however, that the Company shall not be required to
comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback
registration rights pursuant to Section 4.2 hereof and either: (i) the Holder has elected to participate in the offering covered
by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities
of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such
offering is consummated. The demand for registration may be made at any time during a period of four (4) years beginning on the
Commencement Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s)
to all other registered Holders of the Purchase Warrants and/or the Registrable Securities within ten (10) days after the date
of the receipt of any such Demand Notice.
4.1.2 Terms.
The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts
to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such
States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company be required
to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register
or license to do business in such State or submit to general service of process in such State, or (ii) the principal shareholders
of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration
statement filed pursuant to the demand right granted under Section 4.1.1 to remain effective for a period of at least twelve (12)
consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first
given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell
the shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if
the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding
the provisions of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one
(1) occasion and such demand registration right shall terminate on the fourth anniversary of the Commencement Date in accordance
with FINRA Rule 5110(f)(2)(H)(iv).
4.2 “Piggy-Back”
Registration.
4.2.1 Grant
of Right. In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right,
for a period of no more than six (6) years from the Commencement Date in accordance with FINRA Rule 5110(f)(2)(H)(v), to include
the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with
a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form);
provided, however, that if, solely in connection with any primary underwritten public offering for the account of
the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares
of Common Stock which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing
or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to
include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder
requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made
pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought
to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities
in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.
4.2.2 Terms.
The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.2.1 hereof,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company
shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to
the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration
statement filed by the Company until such time as all of the Registrable Securities have been sold by the Holder. The holders of
the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within
ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise
provided in this Purchase Warrant, there shall be no limit on the number of times the Holder may request registration under this
Section 4.2.2; provided, however, that such registration rights shall terminate on the sixth anniversary of the Commencement
Date.
4.3 General
Terms.
4.3.1 Indemnification.
The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder
and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a) of
the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or
liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise,
arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which
the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between the Underwriters
and the Company, dated as of [___________], 2013. The Holder(s) of the Registrable Securities to be sold pursuant to such registration
statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim,
damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act
or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for
specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section
5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
4.3.2 Exercise
of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise
their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
4.3.3 Documents
Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each
underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of
counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten
public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold
comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten
public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered
public accounting firm which has issued a report on the Company’s financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein)
and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in
underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering
requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence
between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or
its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary
to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties
and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent
and at such reasonable times as any such Holder shall reasonably request.
4.3.4 Underwriting
Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall be reasonably
satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder
and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other
terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to
any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that
any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be
made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended methods
of distribution.
4.3.5 Documents
to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company
a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
4.3.6 Damages.
Should the registration or the effectiveness thereof required by Sections 4.1 and 4.2 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to
the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened
breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the
necessity of posting bond or other security.
5. New
Purchase Warrants to be Issued.
5.1 Partial
Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in
whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation,
together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax
if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase
Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number
of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.
5.2 Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver
a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
6. Adjustments.
6.1 Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall
be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Share
Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding
Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective
day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares,
and the Exercise Price shall be proportionately decreased.
6.1.2 Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is decreased
by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the
number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and the Exercise
Price shall be proportionately increased.
6.1.3 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than
a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share
reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or
share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification
or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the
property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder
of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant)
to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization,
share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder
of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if
any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant
to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications,
reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.
6.1.4 Changes
in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1,
and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in
the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase
Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the
Commencement Date or the computation thereof.
6.2 Substitute
Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company
with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in
any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction
or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase
Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant)
to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable
upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such
Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale
or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided
for in this Section 6. The above provision of this Section shall similarly apply to successive consolidations or share reconstructions
or amalgamations.
6.3
Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required
to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities,
properties or rights.
7. Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose
of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of
the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall
be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company
further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares
and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject
to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially
reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice
of issuance) on all national securities exchanges (or, if applicable, on the OTCQB U.S. Marketplace or any successor trading market)
on which the Shares issued to the public in the Offering may then be listed and/or quoted.
8. Certain
Notice Requirements.
8.1 Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to
receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder
of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event
at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination
of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of
the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder
a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is
given to the shareholders.
8.2 Events
Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following
events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings,
as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer
to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable
for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation
or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale
of all or substantially all of its property, assets and business shall be proposed.
8.3 Notice
of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to
Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall
describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the
Company’s Chief Financial Officer.
8.4 Transmittal
of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall
be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered
Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company,
to following address or to such other address as the Company may designate by notice to the Holders:
If to the Holder:
Aegis Capital Corp.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxx Xxxxxx, Managing Director of Investment Banking
Fax No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx-Xxxxxx Xxxxxx, Esq.
Fax No.: 000-000-0000
If to the Company:
Vuzix Corporation
0000 Xxxxxxxx Xxxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, CEO
Fax No: 000-000-0000
with a copy (which shall not constitute notice) to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Fax No: 000-000-0000
9. Miscellaneous.
9.1 Amendments.
The Company and Aegis may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders
in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with
any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company
and Aegis may deem necessary or desirable and that the Company and Aegis deem shall not adversely affect the interest of the Holders.
All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement
of the modification or amendment is sought.
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase Warrant.
9.3. Entire
Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection
with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.4 Binding
Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and
their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed
to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions
herein contained.
9.5 Governing
Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought
and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served
upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall
be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing
party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees
and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby
irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.
9.6 Waiver,
etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not
be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or
any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase
Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be
effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver
is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any
other or subsequent breach, non-compliance or non-fulfillment.
9.7 Execution
in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and
the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and
delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic
transmission.
9.8 Exchange
Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any
time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and Aegis enter into an agreement (“Exchange
Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash
or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused
this Purchase Warrant to be signed by its duly authorized officer as of the ____ day of _______, 2013.
VUZIX CORPORATION
By:_________________________________
Name:
Title:
[Form to be used to exercise Purchase
Warrant]
Date:
__________, 20___
The undersigned
hereby elects irrevocably to exercise the Purchase Warrant for ______ shares of common stock, par value $0.001 per share (the “Shares”),
of Vuzix Corporation, a Delaware corporation (the “Company”), and hereby makes payment of $____ (at the rate
of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant
is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number
of Shares for which this Purchase Warrant has not been exercised.
or
The undersigned
hereby elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares,
as determined in accordance with the following formula:
|
X |
= |
Y(A-B) |
|
A |
|
Where, |
|
|
|
|
X |
= |
The number of Shares to be issued to Holder; |
|
Y |
= |
The number of Shares for which the Purchase Warrant is being exercised; |
|
A |
= |
The fair market value of one Share which is equal to $_____; and |
|
B |
= |
The Exercise Price which is equal to $______ per share |
|
|
|
|
|
|
|
The undersigned
agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with
respect to the calculation shall be resolved by the Company in its sole discretion.
Please issue
the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a
new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.
Signature
Signature Guaranteed
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name:
(Print in Block Letters)
Address:
NOTICE: The signature
to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership
on a registered national securities exchange.
[Form to be used to assign Purchase Warrant]
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED, __________________
does hereby sell, assign and transfer unto the right to purchase shares of common stock, par value $0.001 per share, of Vuzix Corporation,
a Delaware corporation (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company
to transfer such right on the books of the Company.
Dated: __________, 20__
Signature
Signature Guaranteed
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must
be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national
securities exchange.
EXHIBIT B
Form of Lock-Up Agreement
EXHIBIT C
Form of Press Release
VUZIX CORPORATION
[Date], 2013
Vuzix Corporation (the “Company”)
announced today that Aegis Capital Corp., acting as representative for the underwriters in the Company’s recent public offering
of _______ the Company’s common stock and warrants to purchase shares of the Company’s common stock, is [waiving]
[releasing] a lock-up restriction with respect to _________ shares of the Company’s common stock held by [certain officers
or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on _________, 2013,
and the shares may be sold on or after such date.
This press release is not an offer or
sale of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities
may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act
of 1933, as amended.
EXHIBIT D
Form of Opinion of
Counsel
EXHIBIT E
Form of Opinion of
Counsel