Exhibit 1.1
UNDERWRITING AGREEMENT
between
XXXXXX PHARMACEUTICALS, INC.
and
AEGIS CAPITAL CORP.,
as Representative of the Several Underwriters
XXXXXX PHARMACEUTICALS, INC.
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, Xxxxxx
Pharmaceuticals, Inc., a corporation formed under the laws of the State of Delaware (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:
1.1 Firm
Shares.
1.1.1. Nature
and Purchase of Firm Shares.
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an aggregate of [•] shares (“Firm Shares”)
of the Company’s common stock, par value $0.001 per share (the “Common Stock”).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their
respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $[•] per share (93% of
the per Firm Share offering price). The Firm Shares 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); provided, however, that the purchase price to be paid by
the Underwriters for any Firm Shares purchased by existing stockholders, officers or directors of the Company (“Company’s
Insiders”) shall be $[•] per share (96% of the per Firm Share offering price).
1.1.2. Shares
Payment and Delivery.
(i) Delivery
and payment for the Firm Shares 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 Xxxxxxxxx Traurig, LLP, The MetLife Building, 000 Xxxx 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 Shares is called the “Closing Date.”
(ii) Payment
for the Firm Shares 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 Shares
(or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The
Firm Shares 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 Shares except upon tender of payment by the Representative for all of the Firm Shares. 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. Option
Shares. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares, the
Company hereby grants to the Underwriters an option to purchase up to [•] additional shares of Common Stock, representing
fifteen percent (15%) of the Firm Shares sold in the offering, from the Company (the “Over-allotment Option”).
Such [•] additional shares of Common Stock, the net proceeds of which will be deposited with the Company’s account,
are hereinafter referred to as “Option Shares.” The purchase price to be paid per Option Share shall be equal
to the price per Firm Share set forth in Section 1.1.1 hereof. The Firm Shares and the Option Shares are hereinafter referred to
together as the “Public Securities.” The offering and sale of the Public Securities is hereinafter referred
to as the “Offering.”
1.2.2. Exercise
of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Option Shares within 45 days after the Effective Date. The Underwriters
shall not be under any obligation to purchase any Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed
in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares to be purchased
and the date and time for delivery of and payment for the Option Shares (the “Option Closing Date”), which 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 Representative Counsel or at such other place (including remotely by facsimile
or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for
the Option Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise
of the Over-allotment Option with respect to all or any portion of the Option Shares, subject to the terms and conditions set forth
herein, (i) the Company shall become obligated to sell to the Underwriters the number of Option Shares specified in such notice
and (ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of Option
Shares then being purchased as set forth in Schedule 1 opposite the name of such Underwriter.
1.2.3. Payment
and Delivery. Payment for the Option Shares 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 Option Shares (or through the facilities of DTC) for the account of the Underwriters. The Option Shares shall
be registered in such name or names and in such authorized denominations as the Representative may request in writing at least
two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Shares
except upon tender of payment by the Representative for applicable Option Shares.
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
(“Representative’s Warrant”) for the purchase of an aggregate of [•] shares of Common Stock,
representing 4.0% of the Firm Shares (excluding the Option Shares), 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 125.0% of the initial public offering price of the Firm Shares. The Representative’s Warrant and the shares of Common
Stock issuable upon exercise thereof are 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 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, 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. 333-202924), 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 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 [•], 2015, that was
included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.”
The final prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.”
Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus
included in the Registration Statement.
“Applicable
Time” means [TIME] [a.m./p.m.], Eastern time, on the date of this Agreement.
“Issuer Free
Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined
in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the
Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule
433(d)(5)(i) because it contains a description of the Public Securities or of the Offering that does not reflect the final terms,
in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g).
“Issuer General
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona Fide Electronic
Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer Limited
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
“Pricing
Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the
Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant
to the Exchange Act. The Company has filed with the Commission a Form 8-A[/A] (File Number 000-[•]) providing for the
registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
of the shares of Common Stock. The registration of the shares of Common Stock under the Exchange Act has been declared effective
by the Commission on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the shares of Common Stock under the Exchange Act, nor has the Company received any notification
that the Commission is contemplating terminating such registration.
2.2 Stock
Exchange Listing. The shares of Common Stock have been approved for listing on The NASDAQ Capital Market (the “Exchange”),
and the Company has taken no action designed to, or likely to have the effect of, delisting the shares of Common Stock from the
Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing except as described
in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.3 No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any
order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) 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, 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: (i) the table showing
the number of securities to be purchased by each Underwriter, (ii) the fourth full paragraph under the caption “Underwriting”,
(iii) the second and third sentences of the second paragraph under the heading “Discount” under the caption “Underwriting”
and (iv) the sections titled “Discretionary Accounts”, “Electronic Offer, Sale and Distribution of Securities”,
“Stabilization” and “Passive Market Making” under the capital “Underwriting” (the “Underwriters’
Information”).
(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 that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus 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 material
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 material 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 or regulatory agency, body or court, domestic or foreign, having jurisdiction
over the Company or any of its assets or business (each, a “Governmental Entity”), including, without limitation,
those relating to environmental laws and regulations.
2.4.3. Prior
Securities Transactions. Since January 1, 2012, no securities 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 laws, rules and regulations relating to the Company’s business as currently conducted or contemplated
are correct and complete in all material respects and no other such laws, rules or regulations are required to be disclosed in
the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed.
2.4.5. No
Other Distribution of Offering Materials. The Company has not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than any Preliminary Prospectus, any Issuer Free Writing Prospectus,
the Prospectus and other materials, if any, permitted under the Securities Act and consistent with Section 3.2 below.
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, 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,
other than shares of Common Stock issuable upon the exercise or conversion of then outstanding options, warrants and convertible
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 Reserved.
2.7 Independent
Accountants. To the knowledge of the Company, Xxxxx Xxxxxxx XxXxxx P.C. (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 included in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, fairly present in all material respects 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). Except as included therein, no historical or pro forma financial
statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the
Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related
notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled
and prepared in all material respects in accordance with the applicable requirements of the Securities Act and the Securities Act
Regulations and present fairly in all material respects 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
in all material respects 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)
the Company has not 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, (d) other
than in the ordinary course of business, the Company has not made any grants under any stock compensation plan, and (e) 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 contractual rights
of rescission or the ability to force the Company to repurchase such securities with respect thereto, and are not subject to personal
liability by reason of being such holders; and except as disclosed in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, none of such securities were issued in violation of the preemptive rights, rights of first refusal or rights
of participation 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, options, warrants
and other rights to purchase or exchange such securities for shares of the 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 of Common Stock, exempt from such registration requirements. The description of
the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder,
as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, accurately and fairly present, in
all material respects, the information required to be shown with respect to such plans, arrangements, options and rights.
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. All corporate action required to be taken for the authorization, issuance and sale
of the Representative’s Warrant has been duly and validly taken; the shares of Common Stock issuable upon exercise of the
Representative’s Warrant have been duly authorized and reserved for issuance by all necessary corporate action on the part
of the Company and when paid for and issued in accordance with the Representative’s Warrant and the Representative’s
Warrant Agreement, such shares of Common Stock will be validly issued, fully paid and non-assessable; the holders thereof are not
and will not be subject to personal liability by reason of being such holders; and such shares of Common Stock are not and will
not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by
the Company.
2.11 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 options, warrants, rights or other securities 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 the Registration Statement or any other registration statement to
be filed by the Company.
2.12 Validity
and Binding Effect of Agreements. The execution, delivery and performance of this 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 and the Representative’s Warrant
Agreement, 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 indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument to
which the Company is a party or as to which any property of the Company is a party; (ii) result in any violation of the provisions
of the Company’s Certificate of Incorporation (as the same have been 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 (including, without limitation, those promulgated by the Food and Drug Administration
of the U.S. Department of Health and Human Services (the “FDA”) or by any foreign, state or local Governmental
Entity performing functions similar to those performed by the FDA), except in the cases of clauses (i) and (iii) for such breaches,
conflicts or violations which would not reasonably be expected to have a Material Adverse Change.
2.14 No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by
which the Company may be bound or to which any of the properties or assets of the Company is subject. Except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not (i) in violation of any term or provision
of its Charter or by-laws, or (ii) in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or
decree of any Governmental Entity, except in the cases of clause (ii) for such violations which would not reasonably be expected
to have a Material Adverse Change.
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 (as defined below) of and from all Governmental
Entities
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 Authorizations required in connection therewith have been obtained. No Authorization of, and no
filing with, Governmental Entity is required for the valid issuance, sale and delivery of the Public Securities and the consummation
of the transactions and agreements contemplated by this Agreement and the 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 Financial Industry Regulatory Authority, Inc. (“FINRA”).
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 and officers as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus 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
inaccurate and incorrect in any material respect.
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 which is required to be disclosed.
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, 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 (including, without limitation, as to directors and officers insurance
coverage), 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 reasonable basis 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 stockholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.20.2. Payments
Within Six (6) 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 six (6) months prior to the initial filing of the Registration Statement, 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) to the Company’s knowledge, beneficial owner of
5% or more of any class of the Company's securities or (iii) to the Company’s knowledge, beneficial owner of the Company's
unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration
Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance
with the rules and regulations of FINRA).
2.20.5. 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. Neither the Company or, to the Company’s knowledge, any director, officer, agent, employee or
affiliate of the Company or any other person acting on behalf of the Company, 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 material 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. Neither the Company or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of
the Company or any other person acting on behalf of the Company, 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 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 Regulatory.
All preclinical and clinical studies conducted by or on behalf of the Company that are material to the Company have been
adequately described in the Registration Statement, the Pricing Disclosure Package and the Prospectus in all material
respects. The clinical and preclinical studies conducted by or on behalf of the Company that are described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, or the results of such studies which are referred
to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, were and, if still ongoing, are
being conducted in material compliance with all laws and regulations applicable thereto in the jurisdictions in which they
are being conducted and with all laws and regulations applicable to preclinical and clinical studies from which data will be
submitted to support marketing approval. The descriptions in the Registration Statement, the Pricing Disclosure Package
and the Prospectus of the results of such studies are accurate and complete in all material respects and fairly present the
data derived from such studies, and the Company has no knowledge of, or reasonable basis to believe that, any large
well-controlled clinical study the aggregate results of which are inconsistent with or otherwise call into question the
results of any clinical study conducted by or on behalf of the Company that are described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or the results of which are referred to in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. Except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, the Company has not received any written notices or statements from the FDA,
the European Medicines Agency (“EMA”) or any other governmental agency or authority imposing, requiring,
requesting or suggesting a clinical hold, termination, suspension or material modification for or of any clinical or
preclinical studies that are described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or
the results of which are referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not
received any written notices or statements from the FDA, the EMA or any other governmental agency, and otherwise has no
knowledge of, or reason to believe that, (i) any investigational new drug application for potential product of the Company is
or has been rejected or determined to be non-approvable or conditionally approvable; and (ii) any license, approval, permit
or authorization to conduct any clinical trial of any potential product of the Company has been, will be or may be suspended,
revoked, modified or limited.
2.25 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.
2.26 Lock-Up
Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors and each
owner 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.
2.27 Subsidiaries.
The Company has no subsidiaries.
2.28 Related
Party Transactions.
2.28.1 Business
Relationships. 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.
2.28.2 No
Relationships with Customers and Suppliers. No relationship, direct or indirect, exists between or among the Company, on the
one hand, and the directors, officers, stockholders,
customers or suppliers of the Company,
or any of the Company’s affiliates, on the other hand, which is required to be described in the Pricing Disclosure Package
and the Prospectus and which is not so described.
2.28.3 No
Unconsolidated Entities. There are no transactions, arrangements or other relationships between and/or among the Company, any
of its Subsidiaries or affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s liquidity or the availability of or requirements for its capital resources required to be described
in the Pricing Disclosure Package and the Prospectus which have not been described as required.
2.28.4 No
Loans or Advances to Affiliates. There are no outstanding loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors
of the Company or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
2.29 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 rules and regulations of the Commission promulgated thereunder
(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 Exchange. 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 and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors
qualify as “independent,” as defined under the listing rules of the Exchange.
2.30 Xxxxxxxx-Xxxxx
Compliance.
2.30.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply in all material
respects with Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure
that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the
preparation of the Company’s Exchange Act filings and other public disclosure documents.
2.30.2. 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.
2.31 Accounting
Controls. The Company maintains systems of “internal control over financial reporting” (as defined under Rules
13a-15 and 15d-15 under the Exchange Act Regulations) that comply in all material respects 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’s 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.
2.32 No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.33 No
Labor Disputes. No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent.
The Company is not aware that any key employee or significant group of employees of the Company plans to terminate employment with
the Company.
2.34 Intellectual
Property Rights. The Company 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 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 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. The Company has not received any notice alleging any such infringement, fee or conflict
with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or
violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company in or to
any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such
claim, that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably be expected
to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the
Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction invalid
or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any
facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other
claims in this Section 2.34, reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or
otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written
notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that
would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably be expected to result
in a
Material Adverse Change;
and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect
of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of
such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed
with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To
the Company’s knowledge, all material technical information developed by and belonging to the Company which 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..
2.35 Taxes.
The Company has filed all material 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. The Company 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. 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, 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. There
are no tax liens against the assets, properties or business of the Company. 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.
2.36 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.
2.37 Compliance
with Laws. The Company: (A) is and at all times has been in compliance in all material respects 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 FDA Form 483, notice of adverse finding, warning letter, untitled letter
or other correspondence or notice from the U.S. Food and Drug Administration or any other governmental authority alleging or asserting
noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements
or amendments thereto required by any such Applicable Laws (“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 written 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 written notice that any governmental
authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge
that any such governmental authority is considering such action; (F) has filed, obtained, maintained or submitted all material
reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any
Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented
by a subsequent submission); and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to
be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor”
letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect
or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice
or action.
2.38 Environmental
Laws. The Company is in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use,
treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment
which are applicable to their businesses (“Environmental Laws”), except where the failure to comply would not,
singularly or in the aggregate, result in a Material Adverse Change. There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances
by, due to, or caused by the Company (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company
is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company, or upon any other property,
in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law,
statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or in the aggregate with all such violations and liabilities,
a Material Adverse Change; and there has been no disposal, discharge, emission or other release of any kind onto such property
or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which
the Company has knowledge, except for any such disposal, discharge, emission, or other release of any kind which would not have,
singularly or in the aggregate with all such discharges and other releases, a Material Adverse Change. In the ordinary course
of business, the Company conducts periodic reviews of the effect of Environmental Laws on its business and assets, in the course
of which they identify and evaluate associated costs and liabilities (including, without limitation, any capital or operating
expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or governmental permits issued thereunder, any related
constraints on operating activities and any potential liabilities to third parties). On the basis of such reviews, the Company
has reasonably concluded that such associated costs and liabilities would not have, singularly or in the aggregate, a Material
Adverse Change.
2.39 Real
Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
has good and marketable title in fee simple to, or has valid rights to lease or otherwise use, all items of real or personal property
which are material to the business of the Company, in each case free and clear of all liens, encumbrances, security interests,
claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company; and all of the leases and subleases material to the business
of the Company, and under which the Company holds properties described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, are in full force and effect, and the Company has not received any written notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the Company under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company to the continued possession of the leased or subleased premises under any
such lease or sublease, which would result in a Material Adverse Change.
2.40 Contracts
Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of
its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s liquidity or the availability of or requirements for its capital resources required to be described
in the Registration Statement, the Pricing Disclosure Package and the Prospectus which have not been described as required.
2.41 Loans
to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors of the
Company, or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package
and the Prospectus.
2.42 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.
2.43 Smaller
Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act Regulations.
2.44 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.
2.45 Reverse
Stock Split. The Company has taken all necessary corporate action to effectuate a reverse stock split of its shares of Common
Stock on the basis of one (1) such share for each seven and
fifteen one-hundredths
(7.15) shares issued and outstanding shares thereof (the “Reverse Stock Split”), such Reverse Stock Split to
be effective no later than the first trading day of the Firm Shares following the date hereof.
2.46 Emerging
Growth Company. From the time of the initial confidential submission of the Registration Statement to the Commission (or, if
earlier, the first date on which the Company engaged directly in or through any Person authorized to act on its behalf in any Testing-the
Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined
in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication”
means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
2.47 Testing-the-Waters
Communications. The Company has not (i) alone engaged in any Testing-the-Waters Communications, other than Testing-the-Waters
Communications with the written consent of the Representative and with entities that are qualified institutional buyers within
the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501
under the Securities Act and (ii) authorized anyone other than the Representative to engage in Testing-the-Waters Communications.
The Company confirms that the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters Communications.
The Company has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule 2-C hereto.
“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication
within the meaning of Rule 405 under the Securities Act.
2.48 Electronic
Road Show. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of the
Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities
Act Regulations) is required in connection with the Offering.
2.49 Margin
Securities. The Company does not own any “margin securities” as that term is defined in Regulation U of the Board
of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of 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.
2.50 Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without
a reasonable basis or has been disclosed other than in good faith.
2.51 Integration.
Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering
to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of
any such securities under the Securities Act.
2.52 Confidentiality
and Non-Competitions. To the Company’s knowledge, no director, officer, key employee or consultant of the Company is
subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer or prior
employer that could reasonably be expected to materially affect his ability to be and act in his respective capacity of the Company
or be expected to result in a Material Adverse Change.
2.53 Minute
Books. The Company has made available to the Underwriters and counsel for the Underwriters, copies of the minutes from all
meetings and all written consents describing all actions of the board of directors (including each board committee) and stockholders
of the Company (or analogous governing bodies and interest holders, as applicable), since the time of its incorporation through
the date of the latest meeting and action, which accurately reflect in all material respects all transactions referred to therein.
There are no material transactions, agreements, dispositions or other actions of the Company that are not properly approved and/or
accurately and fairly recorded in the minutes and written consents of the Company, as applicable.
2.54 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent of the Representative)
has taken, 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.
3.1 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 best efforts to prevent the issuance of any stop order,
prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2. Continued
Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange
Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and
in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to
the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in
connection with sales
of the Public Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement
will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in
order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing
Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the
Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare any
amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing
Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing
or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such
amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative
or counsel for the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any
filings made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company
shall give the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing
Date and the exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative
with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will
not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object, unless required
by law or the Exchange.
3.2.3. 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 the shares of Common Stock under the Exchange Act, provided that such provision shall not
prevent a sale, merger or similar transaction involving the Company. For a period of three (3) years after the date of this Agreement,
the Company shall not deregister the shares of Common Stock under the Exchange Act without the prior written consent of the Representative,
which consent shall not be unreasonably withheld, provided that such provision shall not prevent a sale, merger or similar transaction
involving the Company.
3.2.4. Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall
not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission
or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General
Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i)
that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such
free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto,
including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of
an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not
misleading, the Company
will promptly notify the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus
to eliminate or correct such conflict, untrue statement or omission.
3.2.5. Testing-the-Waters
Communications. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or
occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an
untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company shall promptly notify
the Representative and shall promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to
eliminate or correct such untrue statement or omission.
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally
filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and
each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each
Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by
Rule 172 of the Securities Act Regulations, would be) required to be delivered under the Securities Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
3.5 Effectiveness
and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement
to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative
immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto;
(ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that
purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification
of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for
that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration
Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission;
and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company,
makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue
or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading,
or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend
such qualification at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.
3.6 Review
of Financial Statements. For a period of three (3) 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,
provided that such provision shall not prevent a sale, merger or similar transaction involving the Company.
3.7 Listing.
For a period of three (3) years after the date of this Agreement, the Company shall use its reasonable best efforts to maintain
the listing of the shares of Common Stock (including the Public Securities) on the Exchange or another national securities exchange
for at least three years from the date of this Agreement, provided that such provision shall not prevent a sale, merger or similar
transaction involving the Company.
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 Xxxxxxx/Xxxxxxxxx & Associates, 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, provided that such provision shall not prevent a sale, merger or similar transaction involving the Company.
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, at the Representative’s request, 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; (v) a copy of each report or other communication furnished to stockholders
and (vi) such additional documents and information with respect to the Company and the affairs of any future subsidiaries of the
Company as the Representative may from time to time reasonably request; provided the Representative shall sign, if requested by
the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and Representative
Counsel in connection with the Representative’s receipt of such information. Documents filed with the Commission pursuant
to its XXXXX system or otherwise publicly filed or made available 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; provided that such provision
shall not prevent a sale, merger or similar transaction involving the Company. Corporate Stock Transfer, Inc. is acceptable to
the Representative to act as Transfer Agent for the shares of Common Stock.
3.9.3. Trading
Reports. For a period of three (3) years after the date of this Agreement, the Company shall provide to the Representative,
at the Company’s expense, such reports published by Exchange relating to price trading of the Public Securities, as the Representative
shall reasonably request,
provided that such provision
shall not prevent a sale, merger or similar transaction involving the Company.
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 shares of Common Stock to be sold in the Offering (including the Option Shares) with the Commission; (b) all Public Filing
System filing fees associated with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such
Public Securities on the Exchange 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, and the reasonable
fees and disbursements of “blue sky” counsel, it being agreed that such fees and expenses will be limited to if the
Offering is commenced on the Over the Counter Bulletin Board, the Company shall make a payment of up to $10,000 to such counsel
upon the commencement of “blue sky” work by such counsel and an additional payment of $5,000 to such counsel at Closing
to cover such counsel’s fees and expenses); (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 a 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 (up to $2,500) associated with one set of bound
volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or
its designee shall provide within a reasonable time after the Closing Date in such quantities as the Representative may reasonably
request; (m) the fees and expenses of the Company’s accountants; (n) the fees and expenses of the Company’s legal counsel
and other agents and representatives; (o) the fees and expenses of the Underwriter’s legal counsel not to exceed $50,000,
but only if the gross proceeds to the Company from the Offering equal or exceed $25 million; (p) the $21,775 cost associated with
the Underwriter’s use of Ipreo’s book-building, prospectus tracking and compliance software for the Offering; and (q)
upon the successful completion of this Offering, up to $20,000 of the Underwriter’s actual accountable “road show”
expenses for the Offering. Notwithstanding the foregoing, the Company’s obligations to reimburse the Representative for any
out-of-pocket expenses actually incurred as set forth in the preceding sentence shall not exceed $125,000.00 in the aggregate,
including but not limited to the reasonable legal fees and road show expenses as described therein. 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, less the Advance (as such term is defined in Section 8.3 hereof).
3.10.2. Non-accountable
Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date
it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense
allowance equal to one
percent (1%) of the gross proceeds received by the Company from the sale of the Firm Shares (excluding the Option Shares), 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 in all material
respects 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 stockholders (without the consent of the Representative)
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, as required by the
Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board, 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; provided that such provision shall not prevent a sale,
merger or similar transaction involving the Company. The Representative acknowledges that the Auditor is acceptable to the Representative.
3.16 FINRA.
For a period of 90 days from the later of the Closing Date or the Option Closing Date, 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. 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 180 days after the date of this Agreement (the “Lock-Up
Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company; (ii) file or 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 other than a registration statement on Form S-4 or S-8; 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 shares of Common Stock to be sold hereunder, (ii) the issuance by the Company
of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date
hereof, of which the Representative has been advised in writing, (iii) the issuance by the Company of any security under any equity
compensation plan of the Company, (iv) the issuance of securities in connection with mergers, acquisitions, joint ventures, licensing
arrangements or any other similar non-capital raising transactions or (v) the issuance by the Company of shares of Common Stock
to consultants in the Company’s ordinary course of business; provided that, prior to the issuance of any such stock options
or shares of capital stock of the Company that are vested or vest during the Lock-Up Period, each recipient thereof shall sign
and deliver a Lock-Up Agreement.
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 2.26 hereof for an officer or director of the Company and provide the Company with
notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver,
the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C
hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20 Blue
Sky Qualifications. The Company shall use its reasonable best efforts, in cooperation with the Underwriters, if necessary,
to qualify the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to
complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise
so subject.
3.21 Reporting
Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations.
Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under
Rule 463 under the Securities Act Regulations.
3.22 Emerging
Growth Company Status. The Company shall promptly notify the Representative if the Company ceases to be an Emerging Growth
Company at any time prior to the later of (i) completion of the distribution of the Public Securities within the meaning of the
Securities Act and (ii) fifteen (15) days following the completion of the Lock-Up Period.
3.23 Press
Releases. Prior to the Closing Date and any Option Closing Date, the Company shall not issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the Representative is notified), without the prior written consent
of the Representative, which consent shall not be unreasonably withheld, unless in the judgment of the Company and its counsel,
and after notification to the Representative, such press release or communication is required by law.
3.24 Xxxxxxxx-Xxxxx.
The Company shall at all times comply with all applicable provisions of the Xxxxxxxx-Xxxxx Act in effect from time to time.
3.25 IRS
Forms. The Company shall deliver to each Underwriter (or its agent), prior to or at the Closing Date, a properly completed
and executed Internal Revenue Service (“IRS”) Form W-9 or an IRS Form W-8, as appropriate, together with all
required attachments to such form.
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 in all material respects
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 in all material respects
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 shall have become effective not later than 5:30
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 shall have been issued under the Securities Act, no order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus shall have been issued and no proceedings for any of those purposes shall 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. A 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. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount
of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange
Stock Market Clearance. On the Closing Date, the Company’s Common Stock, including the Firm Shares, shall have been
approved for listing on the Exchange, subject only to official notice of issuance. On the first Option Closing Date (if any), the
Company’s Common Stock, including the Option Shares, shall have been approved for listing on the Exchange, subject only to
official notice of issuance.
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 Xxxx Xxxxx LLP,
counsel to the Company, dated the Closing Date and addressed to the Representative, in form and substance reasonably satisfactory
to the Representative.
4.2.2. Opinion
of Special Intellectual Property Counsel for the Company. On the Closing Date, the Representative shall have received the opinion
of Xxxxxx Martens Xxxxx & Bear LLP, special intellectual property counsel for the Company, dated the Closing Date and
addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
4.2.3. Option
Closing Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable
opinions of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and
in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made
by such counsels in their respective opinions delivered on the Closing Date.
4.2.4. Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws
of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of
other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact,
to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Representative Counsel if requested.
4.3 Comfort
Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed the Representative 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 the Representative and to Representative
Counsel from 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 Chief Executive Officer or President, and its Chief Financial Officer
stating on behalf of the Company and not in an individual capacity that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration
Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such
date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package,
as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date),
any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other
than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the
Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective
date of the Registration Statement, no event has occurred which 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 in all material respects (except for those representations
and warranties qualified as to materiality, which shall be true and correct in all respects and except for those representations
and warranties which refer to facts existing at a specific date, which shall be true and correct as of such date) 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 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 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 on behalf of the Company and not in an individual capacity: (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 in the condition or prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and
the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the
Company or any Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding 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 No
Material Misstatement or Omission. The Underwriters shall not have discovered and disclosed to the Company on or prior to the
Closing Date and any Option Closing Date that the Registration Statement or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading,
or that the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any
amendment or supplement thereto contains an untrue statement of fact which, in the opinion of such counsel, is material or omits
to state any fact which, in the opinion of such counsel, is material and is necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading.
4.7 Corporate
Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of each of
this Agreement, the Representative’s Warrant Agreement, the Registration Statement, the Pricing Disclosure Package, each
Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal matters relating to this Agreement, the Representative’s
Warrant Agreement and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects
to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
4.8 Delivery
of Agreements.
4.8.1. Lock-Up
Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.8.2. Representative’s
Warrant Agreement. On the Closing Date, the Company shall have delivered to the Representative executed copies of the Representative’s
Warrant Agreement.
4.9 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.
4.10 Reverse
Stock Split. Not later than the first trading day of the Firm Shares following the date hereof, the Reverse Stock Split shall
be effective.
5.1 Indemnification
of the Underwriters.
5.1.1. General.
The Company shall 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, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication (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 Exchange or any other
national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless
such statement or omission was made in reliance upon, and in conformity with, the Underwriters’ Information. 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 be entitled to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense of such action, 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 been
advised by its counsel 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 Parties
who are party to such action (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, shall 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, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication.
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 each of the Underwriters, on the other hand, from the Offering, 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 proceeds from the Offering purchased
under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discount and commissions
received by the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company, on the one hand, and the Underwriters, on the other, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand, or the Underwriters, on the other, the intent of
the parties and their relative knowledge, access to information and opportunity to correct or prevent such
untrue statement, omission,
act or failure to act; provided that the parties hereto agree that the written information furnished to the Company through the
Representative by or on behalf of any Underwriter for use in any Preliminary Prospectus, any Registration Statement or the Prospectus,
or in any amendment or supplement thereto, consists solely of the Underwriters’ Information. 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 or by any other method of allocation that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss, claim, damage, expense, liability, action, investigation
or proceeding referred to above in this Section 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, preparing to defend or defending
against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage,
expense, liability, action, investigation or proceeding. Notwithstanding the provisions of this Section 5.3.1 no Underwriter shall
be required to contribute any amount in excess of the total discount and commission received by such Underwriter in connection
with the Offering less the amount of any damages which such Underwriter has otherwise paid or becomes liable to pay by reason of
any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or failure to act or alleged failure to
act. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent misrepresentation.
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 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. The Underwriters’ obligations to contribute as provided in this Section 5.3 are several and in
proportion to their respective underwriting obligation, and not joint.
6.1 Default
Not Exceeding 10% of Firm Shares or Option Shares. If any Underwriter or Underwriters shall default in its or their obligations
to purchase the Firm Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of the
Firm Shares or Option Shares with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm
Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Option Shares to which
the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Shares or Option Shares. In the event that the default addressed in Section 6.1 relates to more than
10% of the Firm Shares or Option Shares, you may in your discretion arrange for yourself or for another party or parties to purchase
such Firm Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1) Business Day
after such default relating to more than 10% of the Firm Shares or Option Shares, you do not arrange for the purchase of such Firm
Shares or Option Shares, then the Company shall be entitled to a further period of
one (1) Business Day
within which to procure another party or parties satisfactory to you to purchase said Firm Shares or Option Shares on such terms.
In the event that neither you nor the Company arrange for the purchase of the Firm Shares or Option Shares to which a default relates
as provided in this Section 6, this Agreement will automatically be terminated by you or the Company without liability on the part
of the Company (except as provided in Sections 3.9 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof);
provided, however, that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the Firm
Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other
Underwriters and to the Company for damages occasioned by its default hereunder.
6.3 Postponement
of Closing Date. In the event that the Firm Shares or Option Shares to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the
right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business
Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package
or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration
Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made
necessary. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section
6 with like effect as if it had originally been a party to this Agreement with respect to such shares of Common Stock.
7.1 Board
Composition and Board Designations. The Company shall ensure as of the Closing Date and the Option Closing Date, if any, 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, the Exchange Act and the listing rules of the Exchange or any other national securities exchange,
as the case may be, in the event the Company seeks to have any of its securities listed on another exchange or quoted on an automated
quotation system, and (ii) if applicable, at least one member of the Audit Committee of the Board of Directors qualifies as
an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st)
Business Day following the 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 Shares 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 twelve (12)
months after the Effective Date, to act as sole book-runner and/or sole placement agent, at the Representative’s sole and
exclusive direction, for each and every future public or private equity or debt offering, including all equity linked financings
(each, a “Subject Transaction”), during such twelve (12) month period, of the Company, or any successor to or
subsidiary of the Company, on terms and conditions customary to the Representative for such Subject Transactions. The Representative
shall have the sole right to determine whether or not any other broker dealer shall have the right to participate in any such Subject
Transaction and the economic terms of any such participation; provided, however, that at least two (2) co-managers chosen by the
Company and reasonably satisfactory to the Representative may participate in any underwritten public offering with substantially
the same economics to the underwriters as the Offering. For the avoidance of any doubt, the Company shall not retain, engage or
solicit any additional investment banker, book-runner, financial
advisor, underwriter
and/or placement agent in a Subject Transaction during the twelve (12) month period referred to above without the express written
consent of the Representative. The Company shall notify the Representative of its intention to pursue a Subject Transaction, including
the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the
Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction
within ten (10) Business Days after the mailing of such written notice, then the Representative shall have no further claim or
right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise
its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative
shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subject Transaction during
the twelve (12) month period agreed to above. 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.
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 on the New York Stock Exchange or the Nasdaq
Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government
authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major
hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a
moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets;
or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage
or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable
to proceed with the delivery of the Firm Shares or Option Shares; or (vii) if the Company is in material breach of any of
its representations, warranties or covenants hereunder; 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 reasonable
fees and disbursements of Representative Counsel not to exceed $50,000.00) up to $100,000, inclusive of the $25,000 advance for
accountable expenses previously paid by the Company to the Representative (the “Advance”) and upon demand the
Company shall pay the full amount thereof to the Representative on behalf of the Underwriters; provided,
however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement.
Notwithstanding the foregoing,
any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance
with FINRA Rule 5110(f)(2)(C).
8.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and
shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part
hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be
deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
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:
Xxxxxxxxx Traurig, LLP
The MetLife Building
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Fax No.: 000-000-0000
If to the Company:
Xxxxxx Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxx Xxxx #0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Step
Fax No: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx-Xxxxxx Xxxxxx, Esq.
Fax No: 000-000-0000
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
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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XXXXXX PHARMACEUTICALS, INC. |
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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: |
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AEGIS CAPITAL CORP.
[Signature
Page]
Xxxxxx
Pharmaceuticals, Inc. – Underwriting Agreement
SCHEDULE 1
Underwriter | |
Total Number of
Firm Shares to be Purchased
| | |
Number of Additional Shares to be Purchased if the Over-Allotment Option is Fully Exercised | |
Aegis Capital
Corp. | |
| | | |
| | |
| |
| | | |
| | |
| |
| | | |
| | |
| |
| | | |
| | |
TOTAL | |
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SCHEDULE 2-A
Pricing Information
Number of Firm Shares: [•]
Number of Option Shares: [•]
Public Offering Price per Share: $[•]
Underwriting Discount per Share: $[•]
Proceeds to Company per Share (before expenses, excluding the
Company’s Insiders’ participation): $[•]
Underwriting Non-accountable expense allowance per Share: $[•]
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
[None.]
SCHEDULE 2-C
Written Testing-the-Waters Communications
[None.]
SCHEDULE 3
List of Lock-Up Parties
1. Xxxxxxx
X. Step
2. Xxxxxx
X. Xxxxxx
3. Xxx X.
Xxxxxx
4. Xxxxxx
X. Xxxx
5. Xxxx Xxxxx
6. Xxxxxxx
X. Xxxxx
7. Xxxx X.
Xxxxx
8. Xxxxxx
X. Xxxxxx
9. 1998 Xxxxxx
Family Revocable Trust
10. Xxxxx
Xxxxxx
11. Xxxxx
Xxxxxxxx
12. Xxxxxx
and Ori Tzadik
13. Xxxx X.
Xxxxxxxx
14. Xxxx Xxxxxx
15. Xxxxx
Xxxxxxx
16. Xxxxx
Xxxxx
17. Xxxxxxx
X. Best and Xxxxxxx X. Best
18. Xxxxx
Xxxxxx
19. Xxxxx
Xxxxxxx
20. Xxxxx
Xxxxxxx
21. Defined
Benefits Pension Plan and Trust of Xxxx X. Xxxxxx
22. Xxxxxx
Xxxxxxxx
23. Xxxxx
Xxx
24. Elan Capital
LLC
25. Xxxxxx
Xxxxx and Xxxxx Xxxxx Revocable Living Trust dated January 14, 2008
26. Xxxxx
Xxxxxx
27. Xxxxx
Xxxxxx
28. Xxxxxx
Xxxx
29. Xxxxxx
X. Xxxx and A. Xxxxxx Xxxx Revocable Trust, October 18, 1985
30. Xxxxx
X. Xxxxxx
31. Javelin
Venture Partners I SPV I, LLC
32. Javelin
Venture Partners, L.P.
33. Xxxx Xxxxxxxxx
Survivor Trust of the Xxxxxxxxx Revocable Trust
34. Xxxxxx
Milken
35. Xxxxx
Xxxxxx and Xxx Xxxxxx
36. Xxx Xxxxx
37. Xxxx Xxxxxxx |
38. Xxxxxxx
Xxxxxx
39. Kola Xxxxxx
00. Little
Apple Inc. Retired Trust
41. Xxxx X.
Xxxxx Prod. Inc. Profit Sharing Plan
42. Paffendorf
Family Trust
43. Xxxxxxx
Xxxxxxxx
44. Xxxxx
Xxxxxxxxx
45. Xxxxxx
Xxxxxxx
46. SJ Investment
Company LLC
47. SM Associates
48. Xxxxx
and Xxxxx Xxxx
49. Xxxxxx
X. Xxxxxxxxx 1999 Trust
50. Stonehenge
Partners LLC
51. The Xxxxx
XxXxxxxxx Family Trust
52. Xxx Xxxxxxx
Xxxxxxx and Xxxxxxxx X. Xxxxxxx
53. Xxxx Xxxxxxxxxxx
54. Xxxxxx
Xxxxxxxxx
55. Xxxxxxx
X. Xxxxx
56. WS Investment
Company LLC
|
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
XXXXXX PHARMACEUTICALS, INC.
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 Xxxxxx Pharmaceuticals, Inc., a Delaware corporation (the “Company”), Holder is
entitled, at any time or from time to time from [________________] [DATE THAT IS ONE YEAR FROM THE EFFECTIVE DATE OF THE OFFERING]
(the “Commencement Date”), and at or before 5:00 p.m., Eastern time, [____________] [DATE THAT IS FIVE
YEARS FROM THE EFFECTIVE DATE OF THE OFFERING] (the ”Expiration Date”), but not thereafter, to
subscribe for, purchase and receive, in whole or in part, up to [____] shares of common stock of the Company, par value $0.001
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 which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees
not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable at $[___] per
Share [125% of the public offering price of the Firm 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. The term “Effective Date” shall mean [ ], the date on which the Registration Statement on Form
S-1 (File No. 333-202924) of the Company was declared effective by the
Securities and Exchange Commission.
2. Exercise.
2.1 Exercise
Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and
delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased
payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or
official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time,
on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented
hereby shall cease and expire.
2.2 Cashless
Exercise. If at any time after the Commencement Date there is no effective registration statement registering, or no
current prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment
of cash or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares
equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to
the Company, together with the exercise form attached hereto, in which event the Company shall issue to Holder, Shares in accordance
with the following formula:
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 price 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 “Securities Act”):
“The securities
represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities
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 Xxxxxxxxx Xxxxxxx, LLP shall be deemed
satisfactory evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the
Registration Statement relating to the offer and sale of such securities has been filed by the Company and declared effective by
the U.S. Securities and Exchange Commission (the “Commission”) and compliance with applicable state securities
law has been established.
4. Registration Rights.
4.1 Demand Registration.
4.1.1 Grant of
Right. The Company, upon written demand (a “Demand Notice”) of the Holders 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 Holders 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 Holders; 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 stockholders
of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration
statement filed pursuant to the demand right granted under Section 4.1.1 to remain effective for a period of at least twelve (12)
consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first
given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell
the shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if
the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding
the provisions of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one
(1) occasion and such demand registration right shall terminate on the fifth anniversary of the Effective Date in accordance with
FINRA Rule 5110(f)(2)(G)(iv).
4.2 “Piggy-Back”
Registration.
4.2.1 Grant of
Right. In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right, for
a period of no more than seven (7) years from the Effective Date in accordance with FINRA Rule 5110(f)(2)(G)(v), to include the
Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction
contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided,
however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the
managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares of Common Stock
which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion
hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the
Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by
such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration
Statement or are not entitled to pro rata inclusion with the Registrable Securities.
4.2.2 Terms.
The Company shall bear all fees and expenses attendant to registering the
Registrable Securities pursuant to Section
4.2.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration,
the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice
prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for
each registration statement filed by the Company 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 Holders 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 [___________], 2015. The Holders 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 Holders 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 Holders. Each of the Holders 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 Holders shall, in addition to any other legal or other relief available to
the Holders, 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 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 stockholder. 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 stockholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts
to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all
national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares
issued to the public in the Offering may then be listed and/or quoted.
8. 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 stockholder for the election of directors or any other matter, or as having any rights whatsoever as a stockholder
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 (the “Notice
Date”) for the determination of the stockholders 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 stockholders of the Company at the same time and in the same
manner that such notice is given to the stockholders.
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 (1) when hand delivered, (2) when mailed by express mail or private courier service or (3) when
the event requiring notice is disclosed in all material respects and filed in a current report on Form 8-K or in a definitive proxy
statement on Schedule 14A prior to the Notice Date: (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:
Xxxxxxxxx Traurig, LLP
The MetLife Building
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Fax No.: 000-000-0000
If to the Company:
Xxxxxx Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxx Xxxx #0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Step
Fax No: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx-Xxxxxx Xxxxxx, Esq.
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 _______, 2015.
XXXXXX PHARMACEUTICALS,
INC.
[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 Xxxxxx Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and hereby makes payment of $____ (at
the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase
Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the
number of Shares for which this Purchase Warrant has not been exercised.
or
The undersigned
hereby elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares,
as determined in accordance with the following formula:
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The number of Shares to be issued to Holder; |
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The number of Shares for which the Purchase Warrant is being exercised; |
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The fair market value of one Share which is equal to $_____; and |
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The Exercise Price which is equal to $______ per share |
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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.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name: |
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NOTICE: The signature
to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership
on a registered national securities exchange.
[Form to be used to assign Purchase Warrant]
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED, __________________
does hereby sell, assign and transfer unto the right to purchase shares of common stock, par value $0.001 per share, of Xxxxxx
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), evidenced by the Purchase Warrant and does hereby
authorize the Company to transfer such right on the books of the Company.
Dated: __________, 20__
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
[•], 0000
Xxxxx Capital Corp.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands
that Aegis Capital Corp. (the “Representative”) proposes to enter into an Underwriting Agreement (the “Underwriting
Agreement”) with Xxxxxx Pharmaceuticals, Inc., a Delaware corporation (the “Company”), providing for
the public offering (the “Public Offering”) of shares of common stock, par value $0.001 per share, of the Company
(the “Shares”).
To induce the Representative
to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent
of the Representative, the undersigned will not, during the period commencing on the date hereof and ending 180 days after the
date of the final prospectus (the “Prospectus”) relating to the Public Offering (the “Lock-Up Period”),
(1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares
or any securities convertible into or exercisable or exchangeable for Shares, whether now owned or hereafter acquired by the undersigned
or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up
Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect
to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition,
or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing,
and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative
in connection with (a) transactions relating to Lock-Up Securities acquired in the Public Offering or in open market transactions
after the completion of the Public Offering; provided that no filing under Section 16(a) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), shall be required or shall be voluntarily made in connection with
subsequent sales of Lock-Up Securities acquired in the Public Offering or such open market transactions; (b) transfers of Lock-Up
Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of the undersigned or
a family member (for purposes of this lock-up agreement, “family member” means any relationship by blood, marriage
or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; (d)
if the undersigned is a corporation, partnership, limited liability company or other business entity, (i) any transfers of Lock-Up
Securities to another corporation, partnership or other business entity that controls, is controlled by or is under common control
with the undersigned or (ii) distributions of Lock-Up Securities to current or former members, partners, stockholders, subsidiaries
or affiliates (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned or to any investment
fund or other entity that controls or manages the undersigned (including, for the avoidance of doubt, a fund managed by the same
manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common
control with such manager or managing member or general partner or management company as the undersigned or who shares a common
investment advisor with the undersigned); (e) if the undersigned is a trust, to a trustee or beneficiary of the trust; provided
that in the case of any transfer pursuant to the
foregoing clauses (b), (c) (d) or
(e), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative
a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 16(a) of the Exchange
Act shall be required or shall be voluntarily made; (f) the receipt by the undersigned from the Company of Shares upon the vesting
of restricted stock awards or stock units or upon the exercise of options to purchase the Company’s Common Stock (the “Plan
Shares”) or the transfer of Shares or any securities convertible into Shares to the Company upon a vesting event of the
Company’s securities or upon the exercise of options to purchase the Company’s securities, in each case on a “cashless”
or “net exercise” basis or to cover tax obligations of the undersigned in connection with such vesting or exercise,
but only to the extent such right expires during the Lock-up Period, provided that no filing under Section 16(a) of the
Exchange Act shall be required or shall be voluntarily made within 30 days after the date of the Prospectus, and after such 30th
day, if the undersigned is required to file a report under Section 16(a) of the Exchange Act reporting a reduction in beneficial
ownership of Shares during the Lock-Up Period, the undersigned shall include a statement in such report to the effect that the
purpose of such transfer was to cover tax withholding obligations of the undersigned in connection with such vesting or exercise
and, provided further, that the Plan Shares shall be subject to the terms of this lock-up agreement; (g) the transfer
of Lock-Up Securities pursuant to agreements under which the Company has the option to repurchase such securities or a right of
first refusal with respect to the transfer of such securities; (h) the establishment of a trading plan pursuant to Rule 10b5-1
under the Exchange Act for the transfer of Lock-Up Securities, provided that (i) such plan does not provide for the transfer
of Lock-Up Securities during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act,
if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such
plan, such public announcement or filing shall include a statement to the effect that no transfer of Lock-Up Securities may be
made under such plan during the Lock-Up Period; (i) the conversion of the outstanding preferred stock of the Company into Shares,
provided that such Shares remain subject to the terms of this agreement; (j) the transfer of Lock-Up Securities that occurs
by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, provided
that the undersigned shall use its reasonable best efforts to cause the transferee to sign and deliver a lock-up agreement substantially
in the form of this lock-up agreement for the balance of the Lock-Up Period, and provided further, that any filing
under Section 16(a) of the Exchange Act that is required to be made during the Lock-Up Period as a result of such transfer shall
include a statement that such transfer has occurred by operation of law; and (k)the transfer of Lock-Up Securities pursuant to
a change of control of the Company; provided that in the event that the change of control is not completed, the Lock-Up
Securities owned by the undersigned shall remain subject to the restrictions contained in this lock-up agreement. For purposes
of clause (k) above, “change of control” shall mean the consummation of any bona fide third party tender offer, merger,
consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3)
of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act)
of a majority of total voting power of the voting stock of the Company. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s
Lock-Up Securities except in compliance with this lock-up agreement.
If the undersigned
is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable
to any issuer-directed or “friends and family” Shares that the undersigned may purchase in the Public Offering; (ii)
the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing
restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release
or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press
release through a major news service at least two (2) business days before the effective date of the release or waiver. Any release
or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days
after the publication
date of such press release. The provisions
of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not
for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this lock-up agreement
to the extent and for the duration that such terms remain in effect at the time of such transfer.
The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors and assigns.
The undersigned understands
that, if the Underwriting Agreement is not executed by September 30, 2015, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold
thereunder, then this lock-up agreement shall be void and of no further force or effect.
Whether or not the
Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.
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Very truly yours, |
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(Name of Signatory, in the case of entities - Please Print) |
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(Title of Signatory, in the case of entities - Please Print) |
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EXHIBIT C
Form of Press Release
XXXXXX PHARMACEUTICALS, INC.
[Date]
Xxxxxx Pharmaceuticals, Inc. (the “Company”)
announced today that Aegis Capital Corp., acting as representative for the underwriters in the Company’s recent public offering
of _______ shares of the Company’s common stock, is [waiving] [releasing] a lock-up restriction with respect to _________
shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company.
The [waiver] [release] will take effect on _________, 20___, and the shares may be sold on or after such date.
This press release is not an offer or
sale of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities
may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act
of 1933, as amended.