Exhibit 1.1
JERASH HOLDINGS (US), INC.
UNDERWRITING AGREEMENT
March 15, 2018
Network 1 Financial Securities, Inc.
Galleria, Penthouse
0 Xxxxxx Xxxxxx, Xxxxxxxx 0
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Jerash Holdings (US), Inc., a corporation organized and existing
under the laws of State of Delaware (the “Company”), proposes to issue and sell to the purchasers, pursuant
to the terms and conditions of this Underwriting Agreement (this “Agreement”) and the Subscription Agreements
in the form of Exhibit A attached hereto (the “Subscription Agreement”) entered into with the
purchasers identified therein (each a “Purchaser” and collectively, the “Purchasers”), a
minimum amount (the “Minimum Amount”) of 715,000 shares of common stock, par value $0.001 per share (the “Common
Stock”), of the Company up to a maximum amount (the “Maximum Amount”) of 1,430,000 shares of Common
Stock (the “Securities”) pursuant to a Registration Statement on Form S-1 declared effective by the United States
Securities and Exchange Commission (the “Commission”). The Company hereby confirms its agreement with Network
1 Financial Securities, Inc. (“Network 1” or the “Underwriter”) concerning the purchase and
sale of the Securities as follows:
1.1.1. Nature
and Purchase of Securities.
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company hereby engages and authorizes Network 1 to act as the Company’s exclusive agent on a “best efforts,”
mini/max basis only, to solicit offers for the purchase of the Securities to the Purchasers in connection with the proposed offering
of the Securities (the “Offering”). Until the Closing Date (as defined in Section 1.1.2(ii) hereof) or
earlier upon termination of this Agreement pursuant to Section 7.2, the Company shall not, without the prior written consent
of Network 1, solicit or accept offers to purchase the Securities otherwise than through Network 1. Under no circumstances will
Network 1 be obligated to underwrite or purchase any of the Securities for its own account or otherwise provide any financing.
Network 1 shall have the right to enter into selected dealer agreements with other broker-dealers participating in the Offering
(each dealer being referred to herein as a “Dealer” and said dealers being collectively referred to herein as
the “Dealers”).
(ii) The
Underwriter agrees to exercise its best efforts to arrange for the purchase by the Purchasers from the Company the Securities at
a purchase price of $7.00 per share (the “Purchase Price”). The Securities are to be offered initially to the
public at the Purchase Price.
1.1.2. Placement
Share Payment and Delivery.
(i) Prior
to the Closing Date (as defined below), (i) each Purchaser will execute a Subscription Agreement and deliver it to the Underwriter
for forwarding to the Company; (ii) the Company will execute each such Subscription Agreement and will forward a copy thereof to
the Escrow Agent; (iii) each Purchaser will transfer to the Escrow Account funds in an amount equal to the Purchase Price multiplied
by the number of Securities to which such Purchaser has subscribed; (iv) in the event that the Underwriter or any subagent receives
subscription funds, such funds will be promptly transmitted to the Escrow Account in compliance with Rule 15c2-4 of the Securities
Exchange Act of 1934, as amended; and (v) the Escrow Agent will notify the Company and the Underwriter promptly in writing
when the balance of the Escrow Account contains at least the Minimum Amount.
(ii) If
the Escrow Agent shall have received at least the Minimum Amount on or before 5:00 p.m., New York City time, on May 31,
2018 (the “Termination Date”), the Escrow Agent will release the balance of the Escrow Account for
collection by the Company and the Underwriter as provided in the Escrow Agreement and the Company shall deliver the Securities
being purchased on the Closing Date to Underwriter, through the facilities of the Depository Trust Company (“DTC”),
and such Securities shall be registered in such name or names and shall be in such denominations, as the Underwriter may request
by written notice to the Company at least two (2) full Business Days prior to the Closing (the “Closing”). The
cost of original issue tax stamps and other transfer taxes, if any, in connection with the issuance and delivery of the Securities
by the Company to the respective Purchasers shall be borne by the Company. The date on which the Escrow Agent releases the balance
of the Escrow Account for collection by the Company and the Underwriter against delivery of the Securities to the Underwriter as
described above, is hereinafter referred to as the “Closing Date.” 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.
(iii)
If the Minimum Amount has not been received by the Escrow Agent on or before the Termination Date, the Offering will be deemed
terminated, the Escrow Agent will promptly return the funds to the Purchasers without interest and the Underwriter shall not
be entitled to any compensation hereunder.
1.1.3. Exclusive
Agency. During the Offering Period, the Company will not sell or agree to sell any of its debt or equity securities otherwise
than through Network 1. Subject to Network 1’s commitment to arrange for the sale of the Securities on a best efforts, minimum/maximum
basis as provided herein, nothing in this Agreement shall prevent Network 1 from entering into an agency agreement, underwriting
or placement agreement, or other similar agreement governing the offer and sale of securities with any other issuer of securities,
and nothing contained herein shall be construed in any way as precluding or restricting Network 1’s right to sell or offer
for sale securities issued by any other person, including securities similar to, or competing with, the Securities. It is understood
between the parties that there is no firm commitment by Underwriter or for the Underwriter to arrange for the purchase of any or
all of the Securities.
1.1.4. Obligation
to Offer Shares. The Company hereby acknowledges that the Underwriter has agreed, as agent of the Company, to use its best
efforts to solicit offers to purchase the Securities from the Company on the terms and subject to the conditions set forth in the
Prospectus (as defined below). The Underwriter shall use its best efforts to assist the Company in obtaining performance by each
Purchaser whose offer to purchase Securities has been solicited by the Underwriter and accepted by the Company, but the Underwriter
shall not, except as otherwise provided in this Agreement, be obligated to disclose the identity of any potential purchaser or
have any liability to the Company in the event any such purchase is not consummated for any reason. Under no circumstances will
the Underwriter be obligated to underwrite or purchase any Securities for its own account and, in soliciting purchases of the Securities,
the Underwriter shall act solely as the Company’s agent and not as principal.
1.1.5. Offering
Termination Date. The “Offering Period” shall commence on the day that the Prospectus is first made available
to prospective investors in connection with the Offering and shall continue until the “Offering Termination Date,”
which shall be the earliest of (i) a date mutually acceptable to the Company and Network 1 after which at least the Minimum Amount
of Securities are sold at the Purchase Price; (ii) such time as the Maximum Amount of Securities are sold at the Purchase Price;
and (iii) the close of business on the Termination Date. The Company and Network 1 agree that unless at least the Minimum Amount
of Securities are sold on or before the Offering Termination Date, all funds that have been sent to the Escrow Account (as hereinafter
defined) for the Securities will be returned to the subscribers, without charge, interest or deduction. The parties agree that
if the Minimum Amount of Securities is sold by the Termination Date, the Offering Termination Date may be extended by the mutual
agreement of the Underwriter and the Company for period up to 90 days.
1.1.6. Escrow
Agent.
(i) The
Company and the Underwriter intend to enter into an escrow agreement substantially in the form included as an exhibit to the Registration
Statement (the “Escrow Agreement”) with Continental Stock Transfer & Trust Company (the “Escrow
Agent”), pursuant to which the Escrow Agent will establish an escrow account, at the Company’s expense, for the
benefit of the Purchasers (the “Escrow Account”).
(ii) Prior
to the sale of any of the Securities, all funds received from purchasers of the Securities shall be placed in the Escrow Account
with the Escrow Agent by noon of the next business day following receipt thereof, pursuant to the Escrow Agreement, and all payments
of, from or on account of such funds shall be made pursuant to the Escrow Agreement. In the event that fewer than the Minimum Amount
of Securities are subscribed for on the Offering Termination Date, all funds then held in the Escrow Account shall be returned
promptly to the respective investors as provided in the Escrow Agreement.
(iii) The
Escrow Agent may not utilize sweep arrangements. All participating broker dealers (members of FINRA, or the “Members”)
shall confirm, via the selected dealer agreement or similar agreement that it will comply with rule 15c2-4. As per rule 15c2-4
and FINRA notice to members 84-7 (the “Rule”), all checks that are accompanied by a subscription agreement will
be promptly sent along with the subscription agreements to the escrow account by noon the next business day. In regards to monies
being wired from an investor’s bank account, the Members shall request the investors send their wires to the Escrow Agent
by the next business day. Funds in customer accounts with the Underwriter or participating broker-dealers will be transmitted to
the Escrow Agent by noon of the next business day.
1.2.1. Underwriter’s
Commissions. As compensation for services rendered, on each Closing Date, the Company shall pay to the Underwriter, by wire
transfer of immediately available funds on the Closing Date, a selling commission computed at the rate of seven and one-half
percent (7.5%) of the gross proceeds of the Securities sold in that Closing (the “Selling Commission”).
The foregoing fee shall be paid to the Underwriter and split among selected dealers and the Underwriter in such amounts as agreed
to among them pursuant to a selected dealers’ agreement. The foregoing fee in no way limits or impairs the indemnification
and contribution provisions of this Agreement. The Underwriter shall furnish the Company with wire instructions and amounts payable
to each participating broker-dealers.
1.2.2. Underwriter’s
Warrants. In addition to the Selling Commission, on each Closing Date, the Company shall issue and sell to the Underwriter
(and/or its designees) for $10.00 a warrant (“Underwriter’s Warrant”) for the purchase of an aggregate
number of shares of Common Stock of the Company equal to four percent (4.0%) of the Securities sold in that Closing.
Pursuant to the Underwriter’s Warrant agreement, in the form attached hereto as Exhibit B (the “Underwriter’s
Warrant Agreement”), the Underwriter’s Warrant shall be exercisable, in whole or in part, commencing one hundred
eighty (180) days after the Closing Date it is issued and expiring on the five-year anniversary of the Effective Date at an initial
exercise price per share of Common Stock equal to one hundred twenty-five percent (125.0%) of the Purchase Price
of the Securities in the Offering. The Underwriter’s Warrant Agreement and the shares of Common Stock issuable upon exercise
thereof are hereinafter referred to together as the “Underwriter’s Securities.” The Underwriter understands
and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Underwriter’s Warrant
Agreement and the underlying shares of Common Stock 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 Underwriter’s Securities,
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 Underwriter or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up
restrictions.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriter as of the Closing Date, as follows:
2.1.1. Pursuant
to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission
”) a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-222596) including any related
prospectus or prospectuses, for the registration of the Securities and the Underwriter’s Securities under the Securities
Act of 1933, as amended (the “Securities Act”), which registration statement and amendment or amendments have
been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and
regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and will contain all
material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations.
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.
“Effective Date”
means March 14, 2018, the date the Registration Statement was declared effective under the Securities Act by the
Commission.
“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 1 hereto.
“Issuer Limited Use Free Writing Prospectus”
means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
2.1.2. Pursuant
to the Exchange Act. Prior to the initial Closing Date, the Company will file with the Commission a Form 8-A 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 will be declared effective
by the Commission on or prior to the initial Closing Date. 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. Prior to the initial Closing Date, 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 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 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. The Prospectus, including the prospectus
filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, at each time
it was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities
Act Regulations. 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 Closing Date, contained, contains or will
contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein
or necessary to make the statements therein, in 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 Underwriter by the Underwriter expressly for use
in the Registration Statement, the Prospectus or any amendment thereof or supplement thereto (any such statement or omission, the
“Underwriter’s Information”); and
(iii) 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 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 Underwriter’s Information.
2.4.2. Disclosure
of Agreements. The agreements and documents described in the Registration Statement 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 and the Prospectus or to be filed with the
Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument
(however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that
is referred to in the Registration Statement and the Prospectus, or (ii) is material to the Company’s business, has been
duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against
the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally,
(y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws,
and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought. Except as disclosed in the Registration
Statement and the Prospectus, none of such agreements or instruments has been assigned by the Company, and neither the Company
nor, to the Company’s knowledge, any other party is in default thereunder and, no event has occurred that, with the lapse
of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge,
performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any of its assets or businesses (each, a “Governmental Entity”), including, without limitation,
those relating to environmental laws and regulations.
2.4.3. Prior
Securities Transactions. Except as disclosed in the Registration Statement, during the period commencing six months prior to
the date the Company initially filed the Registration Statement with the Commission (or submitted on a confidential basis) until
the date the Registration Statement is declared effective by the Commission, no securities of the Company have been sold by the
Company by on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control with the
Company.
2.4.4. Regulations.
The disclosures in the Registration Statement and the Prospectus concerning the effects of federal, state, local and all foreign
regulation on the Offering and the Company’s business as currently contemplated are correct in all material respects and
no other such regulations are required to be disclosed in the Registration Statement and the Prospectus which are not so disclosed.
2.5.1. No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement 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 reasonably be
expected to involve a material adverse change in or affecting the financial condition, results of operations, business, assets
or properties of the Company (a “Material Adverse Change”); (ii) there have been no material transactions entered
into by the Company, other than in the ordinary course of business or as contemplated pursuant to the Registration Statement; and
(iii) no officer or director of the Company has resigned or has notified the Company of their intent to resign 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
and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement
and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent,
for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
2.6. Independent
Accountants. To the knowledge of the Company, Xxxxxxxx, LLP (the “Auditor”) whose report is filed with the
Commission as part of the Registration Statement 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 and the Prospectus, provided to the
Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
2.7. Financial
Statements, etc. The financial statements, including the notes thereto and supporting schedules, if any, included in the Registration
Statement and the Prospectus, fairly present the financial position and the results of operations of the Company at the dates and
for the periods to which they apply; and such financial statements have been prepared in conformity with U.S. generally accepted
accounting principles (“GAAP”), consistently applied throughout the periods involved (provided that unaudited
interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and
do not contain all footnotes required by GAAP); and the supporting schedules, if any, included in the Registration Statement present
fairly the information required to be stated therein. Except as included therein, no historical or pro forma financial statements
are required to be included in the Registration Statement 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
and the Prospectus have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act
and the Securities Act Regulations and present fairly the information shown therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred
to therein. All disclosures contained in the Registration Statement or the Prospectus regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act
and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement 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 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 or, other than in the course of business, any grants under any stock compensation plan, and (d) there has not been
any material adverse change in the Company’s long-term or short-term debt.
2.8. Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement and the Prospectus, the
duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated in the Registration
Statement 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 and the Prospectus, on the Effective Date, on the Closing Date,
there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued shares
of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the Company, or any contracts
or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.
2.9. Valid
Issuance of Securities, etc.
2.9.1. Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted
by the Company. The authorized shares of Common Stock conform in all material respects to all statements relating thereto contained
in the Registration Statement and the Prospectus. The offers and sales of the outstanding shares of Common Stock were at all relevant
times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in
part on the representations and warranties of the purchasers of such shares, exempt from such registration requirements.
2.9.2. Securities
Sold Pursuant to this Agreement. The 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 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 Securities has been duly and validly taken. The Securities and Underwriter’s
Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement and
the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the Underwriter’s Warrant
Agreement has been duly and validly taken; the shares of Common Stock issuable upon exercise of the Underwriter’s Warrant
have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and when paid
for and issued in accordance with the Underwriter’s Warrant and the Underwriter’s Warrant Agreement, such shares of
Common Stock will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders; and such shares of Common Stock are not and will not be subject to the preemptive rights
of any holders of any security of the Company or similar contractual rights granted by the Company.
2.10. Registration
Rights of Third Parties. Except as set forth in the Registration Statement and the Prospectus, no holders of any securities
of the Company or any rights exercisable for or convertible into or exchangeable for securities of the Company have the right to
require the Company to register any such securities of the Company under the Securities Act or to include any such securities in
a registration statement to be filed by the Company.
2.11. Validity
and Binding Effect of Agreements. This Agreement and the Underwriter’s Warrant Agreement have been duly and validly authorized
by the Company, and, when executed and delivered, will constitute, the valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification
or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
2.12. No
Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Underwriter’s Warrant Agreement
and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance
by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time
or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default
under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to the terms of any agreement or instrument to which the Company or its Subsidiaries is a party;
(ii) result in any violation of the provisions of the Company’s Certificate of Incorporation (as the same may be amended
or restated from time to time, the “Charter”) or the by-laws of the Company or the equivalent documents of any
of its Subsidiaries; or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental
Entity as of the date hereof.
2.13. No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or its Subsidiaries may be bound or to which any of the properties or assets of the Company
of Subsidiaries is subject. The Company is not in violation of any term or provision of its Charter or by-laws, nor are any of
the Subsidiaries in violation of their respective charter documents, or they in violation of any material franchise, license, permit,
that alone or in the aggregate would have a Material Adverse Change on the business or operations of the Company, or any applicable
law, rule, regulation, judgment or decree of any Governmental Entity.
2.14. Corporate
Power; Licenses; Consents.
2.14.1. Conduct
of Business. Except as described in the Registration Statement and the Prospectus, the Company and its Subsidiaries have all
requisite corporate power and authority, and have all necessary authorizations, approvals, orders, licenses, certificates and permits
of and from all governmental regulatory officials and bodies that they need as of the date hereof to conduct their business purpose
as described in the Registration Statement and the Prospectus, except for such Permits, the absence of which would not reasonably
be expected to result in a Material Adverse Change.
2.15. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained.
No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid
issuance, sale and delivery of the Securities and the consummation of the transactions and agreements contemplated by this Agreement
and the Underwriter’s Warrant Agreement and as contemplated by the Registration Statement and the Prospectus, except with
respect to applicable federal and state securities laws and the rules and regulations of FINRA.
2.16. Director
and Officer Questionnaires. The Company has provided the Underwriter with director and officer questionnaires gathered and
used by the Company (each, a “D&O Questionnaire”) for each member of the Company’s Board of Directors
and senior management listed in the Prospectus. To the knowledge of the Company, each D&O Questionnaire is complete
and accurate in all material respects and does not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein not misleading as of the date hereof and at
the Closing. The Company agrees to promptly inform the Underwriter at any time when it (or any officer or director thereof) should
learn of any fact that would cause any such D&O Questionnaire to not be complete and accurate in all material respects
or to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading as of the date hereof and at the Closing. The Company’s duty to inform the
Underwriter shall be satisfied if the Company publicly discloses such information via press release or Form 8-K, or successor form,
filed on the Commission’s XXXXX system or successor system. For purposes of this Section 2.16, the knowledge of a
director or officer, as the case may be, with respect to his or her own D&O Questionnaire shall not be imputed to the Company.
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 Subsidiaries or, to the
Company’s knowledge, any executive officer or director which has not been disclosed in the Registration Statement and the
Prospectus or in connection with the Company’s listing application for the listing of the Securities on the Exchange.
2.18. Subsidiaries.
Other than the Subsidiaries listed on Exhibit 21 to the Registration Statement (each a “Subsidiary,” and together
the “Subsidiaries”), there are no other partially or wholly-owned Subsidiaries of the Company.
2.19. Good
Standing. The Company and each Subsidiary has been duly organized and is validly existing as a corporation or equivalent in
the case of a Non-US Subsidiary and is in good standing (or equivalent in the case of a Non-US jurisdiction) under the laws of
the state of its incorporation as of the date hereof, and is duly qualified to do business and is in good standing in each other
jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the
failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.20. Insurance.
The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe
that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not reasonably be expected to result in a Material Adverse Change.
2.21. Transactions
Affecting Disclosure to FINRA.
2.21.1. Finder’s
Fees. Except as described in the Registration Statement 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 Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the
Company’s knowledge, any of its shareholders that may affect the Underwriter’s compensation, as determined by FINRA.
2.21.2. Payments
Within Eighteen (18) Months. Except as described in the Registration Statement and the Prospectus and except for payments made
to Maxim Group, LLC or its affiliates or employees, 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 eighteen
(18) months prior to the Effective Date, other than the payment to the Underwriter as provided hereunder in connection with the
Offering.
2.21.3. 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.
2.21.4. FINRA
Affiliation. Except for shares held directly or indirectly by affiliates and employees of Maxim Group, LLC and except as disclosed
in the Registration Statement, there is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class
of the Company's securities or (iii) beneficial owner of the Company's unregistered equity securities which were acquired during
the one hundred eighty (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).
2.21.5. Information.
All information provided by the Company to Underwriter Counsel specifically for use by Underwriter Counsel in connection with its
Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.
2.22. No
Unlawful Contributions or Other Payments. Neither the Company nor any of its Subsidiaries nor, to the best knowledge of the
Company, any director, officer, agent, employee, Affiliate or other person associated with or acting on behalf of the Company or
any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government or regulatory
official or employee; (iii) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment; or
(iv) violated or is in violation of any provision of (x) the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the "FCPA"), (y) any applicable law or regulation implementing the
OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or (z) any non-U.S. anti-bribery
or anti-corruption statute or regulation to which the Company is subject. The Company and its Subsidiaries have instituted and
maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption
laws.
2.23. Economic
Sanctions.
2.23.1. Neither
the Company nor any of its Subsidiaries, nor any director officer, employee thereof, nor to the to the Company’s knowledge,
any director, officer, agent, employee, affiliate or representative of the Company or any of its Subsidiaries, is an individual
or entity (“Person”) that is, or is owned 50% or more or controlled by a person that is:
(i) currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury’s
Office of Foreign Affairs (OFAC), nor any Hong Kong sanctions administered by the Hong Kong Monetary Authority (HKMA), or other
relevant sanctions authority (collectively, “Sanctions”); nor
(ii) located, organized or resident in a country or territory that is the subject of comprehensive Sanctions (including, without limitation,
Crimea, Cuba, Iran, North Korea and Syria).
2.23.2. The
Company will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, joint venture partner or other Person:
(i) to
fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding
or facilitation, is the subject of Sanctions; or
(ii) in
any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or otherwise).
2.23.3. For
the past five years, the Company and its Subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings
or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject
of Sanctions.
2.24. Money
Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the applicable anti-money laundering statutes of all jurisdictions where the Company or any
of its Subsidiaries conduct business, the applicable rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any Governmental Entity, including but not limited to, the (Chapter 455 of the
Laws of Hong Kong), the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (Chapter
615 of the Laws of Hong Kong), the Drug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong
Kong), the United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong) (collectively, the “Anti-Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority
or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
2.25. Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to Network 1 or to Underwriter
Counsel shall be deemed a representation and warranty by the Company to the Underwriter 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 5% or more of the Company’s outstanding shares of Common Stock (or securities convertible or exercisable
into shares of Common Stock) (collectively, the “Affiliate Lock-Up Parties”). The Company has caused each of
the Affiliate Lock-Up Parties to deliver to the Underwriter an executed Lock-Up Agreement, in the form attached hereto as Exhibit
C-1 (the “Affiliate Lock-Up Agreement”), prior to the execution of this Agreement. Schedule 3
hereto also contains a complete and accurate list of each beneficial owner of at less than 5% of the Company’s outstanding
shares of Common Stock (or securities convertible or exercisable into shares of Common Stock) (collectively, the “Non-Affiliate
Lock-Up Parties”). The Company has caused each Non-Affiliate Lock-Up Parties to deliver to the Underwriter an executed
Lock-Up Agreement, in the form attached hereto as Exhibit C-2 (the “Non-Affiliate Lock-Up Agreement”).
2.27. Related
Party Transactions. There are no business relationships or related party transactions involving the Company or any other person
required to be described in the Registration Statement and the Prospectus that have not been described as required.
2.28. Board
of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Prospectus
captioned “Management.” Except as described in the Registration Statement and the Prospectus, the qualifications of
the persons serving as board members and the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations,
the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder (the “Xxxxxxxx-Xxxxx Act”) applicable to
the Company and the listing rules of the 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.
2.29. Xxxxxxxx-Xxxxx
Compliance.
2.29.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15
or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information
concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure documents.
2.29.2. Compliance.
The Company is, or on the Closing Date will be, in material compliance with the provisions of the Xxxxxxxx-Xxxxx Act applicable
to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s future compliance
(not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Xxxxxxxx-Xxxxx
Act.
2.30. Accounting
Controls. The Company is relying on a transition period for newly public companies to maintain systems of “internal control
over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with
in all material respects with the requirements of the Exchange Act. Once the transition period ends, the Company will maintain
such systems 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 and
the Prospectus, the Company is not aware of any material weaknesses in its internal controls. Once required, the Company’s
auditors and the Audit Committee of the Board of Directors of the Company will be advised of: (i) all significant deficiencies
and material weaknesses in the design or operation of internal controls over financial reporting which are known to the Company’s
management and that have adversely affected or are reasonably likely to adversely affect the Company’ ability to record,
process, summarize and report financial information; and (ii) any fraud known to the Company’s management, whether or not
material, that involves management or other employees who have a significant role in the Company’s internal controls over
financial reporting.
2.31. No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement and the Prospectus, will not be, required to register as an “investment
company,” as defined in the Investment Company Act of 1940, as amended.
2.32. No
Labor Disputes. No material labor dispute with the employees of the Company exists or, to the knowledge of the Company, is
imminent.
2.33. 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 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 2.32, 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 2.32,
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 2.32, 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 and the Prospectus and are
not described therein in all material respects. None of the technology employed by the Company has been obtained or is knowingly
being used by the Company in material 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 material violation of the rights of any persons.
2.34. Taxes.
The Company and its Subsidiaries have filed all returns (as hereinafter defined) required to be filed with taxing authorities prior
to the date hereof or has duly obtained extensions of time for the filing thereof. The Company and its Subsidiaries have paid all
taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against
the Company or its Subsidiaries. The provisions for taxes payable, if any, shown on the financial statements filed with or as part
of the Registration Statement are reasonably 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 Underwriter,
(i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes
asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns
or collection of taxes have been given by or requested from the Company of its Subsidiaries. The term “taxes” mean
all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any
interest and any penalties, additions to tax or additional amounts with respect thereto. The term “return” means all
returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
2.35. ERISA
Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company or its ERISA Affiliates (as defined below) are in compliance in all material respects
with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations described
in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company is a member. No “reportable event” (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained
by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company
or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded
benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably
expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee
benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established
or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which would cause
the loss of such qualification.
2.36. Compliance
with Laws. The Company and its Subsidiaries: (A) are and at all times has been in compliance with all statutes, rules, or regulations
applicable to the ownership, 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) have not received
any correspondence from any governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses,
certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable
Laws (“Authorizations”) that would reasonably be expected to result in a Material Adverse Change; (C) possess
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) have not received notice of any claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any governmental authority or third party alleging that any product operation or
activity is in violation of any Applicable Laws or Authorizations and have no knowledge that any such governmental authority or
third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding that if brought could
reasonably be expected to result in a Material Adverse Change; (E) have not received notice that any governmental authority has
taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any
such governmental authority is considering such action; and (F) have 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).
2.37. Ineligible
Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness
of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Securities and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any
determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
2.38. Industry
Data. The statistical and market-related data included in each of the Registration Statement 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.
2.39. 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,
or successor section of the Securities Act, as may be amended from time to time.
2.40. 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 Underwriter 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 Underwriter to engage in Testing-the-Waters Communications. The Company
confirms that the Underwriter 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 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.
2.41. 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.
2.42. Margin
Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used, directly
or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the shares
of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve
Board.
2.43. No
Foreign Filing Requirements. To the Company’s knowledge, it is not necessary that this Agreement, the Registration Statement,
the Prospectus or any other document be filed or recorded with any court, regulatory body, administrative agency or other governmental
authority outside of the United States.
2.44. No
Immunity. Neither the Company nor any of its Subsidiaries nor any of its or their respective properties or assets has any immunity
from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution or otherwise) under the laws of the United States; and, to the extent that the Company, any Subsidiary
of the Company or any of their respective properties or assets may have or may hereafter become entitled to any such right of immunity
in any such court in which proceedings may at any time be commenced, each of the Company and its Subsidiaries waives or will waive
such right to the extent permitted by law and has consented to such relief and enforcement.
3.1. Amendments
to Registration Statement. The Company shall deliver to the Underwriter, 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 Underwriter shall reasonably object in writing.
3.2. Federal
Securities Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply in all material respects with the requirements of Rule 430A of the Securities
Act Regulations, and will notify the Underwriter 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 the Prospectus, or of the suspension of the qualification of the Securities and Underwriter’s Securities
for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of
any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company
becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Securities and
Underwriter’s Securities. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations,
in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps
as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received
for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its
commercially reasonable 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 in all material respects 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 Securities as contemplated
in this Agreement and in the Registration Statement and the Prospectus. If at any time when a prospectus relating to the 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 Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for the Underwriter 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 in the light
of the circumstances under which they were made; (ii) amend or supplement the Prospectus in order that 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 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 Underwriter 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
or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the
Underwriter 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 Underwriter or counsel for the Underwriter
shall reasonably object. The Company will furnish to the Underwriter such number of copies of such amendment or supplement as the
Underwriter may reasonably request. The Company has given the Underwriter notice of any filings made pursuant to the Exchange Act
or the Exchange Act Regulations within 48 hours prior to the Closing Date. The Company shall give the Underwriter notice of its
intention to make any such filing from the date hereof until the Closing Date and will furnish the Underwriter 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 Underwriter or counsel for the Underwriter shall reasonably object.
3.2.3. Exchange
Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its commercially
reasonable efforts to maintain the registration of the shares of Common Stock under the Exchange Act. The Company shall not deregister
the shares of Common Stock under the Exchange Act without the prior written consent of the Underwriter. Notwithstanding the foregoing,
the provisions of this Section 3.2.3 shall not apply to the deregistration of the Common Stock of the Company under the
Exchange Act in connection with a Business Combination. As used herein, the term “Business Combination” shall mean
effecting a merger, consolidation, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses involving the Company.
3.2.4. Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Underwriter, it shall not
make any offer relating to the 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 Underwriter 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 Underwriter. 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 Underwriter 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
Underwriter 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 Underwriter 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 Underwriter of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Underwriter and counsel for the Underwriter, 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 Underwriter, without charge, a conformed copy of the Registration Statement as originally filed and
each amendment thereto (without exhibits). The copies of the Registration Statement and each amendment thereto furnished to the
Underwriter 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 Underwriter of Prospectuses. The Company has delivered or made available or will deliver or make available to the Underwriter,
without charge, as many copies of the 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 the Underwriter, without charge, during
the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required
to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as the Underwriter
may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriter 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 Underwriter. The Company shall notify the Underwriter 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 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 prospectus
delivery period that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements
therein not misleading, or (b) in 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 use its commercially reasonable efforts to obtain promptly the lifting of such order.
3.6. Review
of Financial Statements. For as long as the securities of the Company are registered under the Exchange Act, the Company, at
its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s
financial statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7. Listing.
The Company shall use its commercially reasonable efforts to maintain the listing of the shares of Common Stock (including the
Securities) on the Exchange for at least two (2) years from the date of this Agreement unless such listing is terminated as a result
of a transaction approved by the holders of a majority of the voting securities of 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 Underwriter and the Company, 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 Underwriter for a period of not less than one (1) year after the Effective Date.
3.9. Reports
to the Underwriter.
3.9.1. Periodic
Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish to the Underwriter
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 Underwriter: (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) a copy of each registration statement filed by the Company under
the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of any future
Subsidiaries of the Company as the Underwriter may from time to time reasonably request; provided the Underwriter shall sign, if
requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Underwriter
and Underwriter Counsel in connection with the Underwriter’s receipt of such information. Documents filed with the Commission
pursuant to its XXXXX system shall be deemed to have been delivered to the Underwriter pursuant to this Section 3.9.1.
3.9.2. Transfer
Agent; Transfer Sheets. For a period of twenty-four (24) months after the date of this Agreement, the Company shall retain
a transfer agent and registrar acceptable to the Underwriter (the “Transfer Agent”) and, for a period of six
(6) months after the date of this Agreement, shall furnish to the Underwriter at the Company’s sole cost and expense such
transfer sheets of the Company’s securities as the Underwriter may reasonably request, including the daily and monthly consolidated
transfer sheets of the Transfer Agent and DTC. V Stock Transfer, LLC is acceptable to the Underwriter to act as Transfer Agent
for the shares of Common Stock.
3.10. Payment
of Expenses. Subject to the provisions of Section 3.10.3, the Company hereby agrees to pay
on the Closing Date, an amount equal to the sum of all documented out-of-pocket and other 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 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
Securities on the Exchange and such other stock exchanges as the Company and the Underwriter together determine; (d) all fees,
expenses and disbursements relating to background checks of the Company’s officers, directors and entities in an amount not
to exceed $15,000 in the aggregate; (e) all fees, expenses and disbursements relating to the registration or qualification, if
required, of the Securities under the “blue sky” securities laws of such states and other jurisdictions as the Underwriter
may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements
of “blue sky” counsel in an amount not to exceed $10,000; the parties recognize, however, that the Underwriter will
incur no such blue sky counsel fees if and to the extent the Securities are listed on the Exchange); (f) all fees, expenses and
disbursements relating to the registration, qualification or exemption of the Securities under the securities laws of such foreign
jurisdictions, if required as reasonably designated by the Underwriter and agreed by the Company; (g) the costs of all printing
and mailing the underwriting documents (including, without limitation, the Underwriting Agreement and the Selected Dealers’
Agreement), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary
and final Prospectuses as the Underwriter 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 Securities; (j) fees and expenses of the Transfer
Agent for the Securities as well as for the clearing firms that will transfer the Securities to the investors therein; (k) any
stock transfer and/or stamp taxes; (l) to the extent approved by the Company in writing, the costs associated with post-Closing
advertising the Offering in the national editions of the Wall Street Journal and New York Times; (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) up to $25,000 of the Underwriter’s actual accountable “road show” expenses for the Offering; (p) the reasonable
fees and expenses of the Underwriter’s legal counsel not to exceed $75,000; (q) reasonable travel expenses; and (r) reasonable
clearing DTC charges provided, however, that the accountable expenses to be reimbursed shall not exceed $75,000 in the aggregate.
The Underwriter may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, the expenses set forth
herein to be paid by the Company to the Underwriter, less the Advance (as defined in Section 7.3) which shall be credited
against the out-of-pocket expenses incurred by the Underwriter in compliance with FINRA Rule 5110(f)(2)(C).
3.11. Non-Accountable
Expense Allowance. The Company agrees that on each Closing Date, it shall pay, in addition to the Selling Commission, to the
Underwriter by deduction from the net proceeds of the Offering contemplated herein, a fee equal to two percent (2.0%)
of the gross proceeds received by the Company from the sale of the Securities on such Closing Date (the “Non-Accountable
Expense Allowance”).
3.12. Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement and the Prospectus.
3.13. Delivery
of Earnings Statements to Security Holders. The Company shall make generally available (which includes any filing pursuant
to the Exchange Act made publicly through the XXXXX system) to its security holders as soon as practicable, but not later than
the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an earnings statement (which need
not be certified by independent registered public accounting firm unless required by the Securities Act or the Securities Act Regulations,
but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least
twelve (12) consecutive months beginning after the date of this Agreement.
3.14. Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Underwriter)
has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
3.15. 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.
3.16. Accountants.
As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable
to the Underwriter, and the Company shall continue to retain a nationally recognized independent registered public accounting firm
for a period of at least three (3) years after the date of this Agreement. The Underwriter acknowledges that the Auditor is acceptable
to the Underwriter.
3.17. FINRA.
The Company shall advise the Underwriter (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).
3.18. No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriter’s responsibility to the Company is solely
contractual in nature and that none of the Underwriter or its affiliates or any Underwriter shall be deemed to be acting in a fiduciary
capacity with respect to, 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.
3.19. Company
Lock-Up Agreements.
3.19.1. 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 Underwriter, 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, excluding a registration statement on Form S-8 under the Securities Act covering the 1,484,250 shares of common stock
reserved for issuance under the Company’s 2018 Stock Incentive Plan; 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, or (iii) the issuance by the Company of stock
options or shares of capital stock of the Company under any equity compensation plan of the Company.
3.20. Blue
Sky Qualifications. The Company shall use its commercially reasonable efforts, in cooperation with the Underwriter, if necessary,
to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Underwriter may designate and to maintain such qualifications in effect so long as required to complete the
distribution of the 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. The
parties acknowledge and agree that, to the extent the Securities are listed on the Exchange, no such blue-sky filings will be required.
3.21. Reporting
Requirements. The Company, during the period when a prospectus relating to the Securities is (or, but for the exception afforded
by Rule 172, would be) required to be delivered under Section 174(d) of the Securities Act, will use its commercially reasonable
efforts to 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.
3.22. Emerging
Growth Company Status. The Company shall promptly notify the Underwriter 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 Securities within the meaning of the Securities Act
and (ii) fifteen (15) days following the completion of the Lock-Up Period.
4. Conditions
of Underwriter’s Obligations. The obligations of the Underwriter to solicit Purchasers to buy the Securities, as provided
herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof
and as of the Closing Date; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof;
(iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:
4.1. Regulatory
Matters.
4.1.1. Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:00 p.m.,
Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by Network 1, and,
at the Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto
has been issued under the Securities Act, no order preventing or suspending the use the Prospectus has been issued and no proceedings
for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission.
The Company has complied with each request (if any) from the Commission for additional information. The Prospectus containing the
Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b)
(without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared
effective by, the Commission in accordance with the requirements of Rule 430A.
4.1.2. FINRA
Clearance. On or before the date of this Agreement, the Underwriter shall have received clearance from FINRA as to the amount
of compensation allowable or payable to the Underwriter as described in the Registration Statement.
4.1.3. Exchange
Stock Market Clearance. On the Closing Date, the Company’s shares of Common Stock, including the Securities, 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 Underwriter shall have received the favorable opinion of Xxxxxx
Xxxxxxx & Xxxxx, LLP, counsel to the Company, and 10b-5 letter of negative assurance, in each case dated the Closing
Date and addressed to the Underwriter, substantially in the form of Exhibit D and Exhibit E, respectively,
attached hereto.
4.2.2. 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 Underwriter) of other
counsel reasonably acceptable to the Underwriter, familiar with the applicable laws; (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 Underwriter Counsel if requested; and (iii) otherwise as set forth
on Exhibit D attached hereto.
4.3. Comfort
Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed Network 1 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 and the Prospectus, addressed to the Underwriter and
in form and substance satisfactory in all respects to Network 1 and to the Auditor, dated as of the date of this Agreement. All
costs associated with providing this letter, including auditor’s consents, shall be borne by the Company.
4.3.2. Bring-down
Comfort Letter. On the Closing Date, the Underwriter shall have received from the Auditor a letter, dated as of the Closing,
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. All costs associated
with providing this letter, including auditor’s consents, shall be borne by the Company.
4.4. Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the Underwriter a certificate, dated the Closing Date, of its Chief Executive
Officer and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, any
Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto,
as of the Closing Date did not include any untrue statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not
misleading, and any Issuer Free Writing Prospectus as of its date and as of the Closing Date, the Prospectus and each amendment
or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has
occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus, (iii) to
their knowledge after reasonable investigation, as of the Closing Date, the representations and warranties of the Company in this
Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, and (iv) there has not been, subsequent to the date of the most
recent audited financial statements included or incorporated by reference in the Prospectus, any material adverse change in the
financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate,
would involve a Material Adverse Change or a prospective material adverse change, in or affecting the condition (financial or otherwise),
results of operations, business, assets or prospects of the Company, except as set forth in the Prospectus.
4.4.2. Secretary’s
Certificate. On the Closing Date, the Underwriter shall have received a certificate of the Company signed by the Secretary
of the Company, dated the Closing Date, certifying: (i) that each of the Charter and Bylaws is true and complete, has not been
modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering
are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between
the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred
to in such certificate shall be attached to such certificate.
4.5. No
Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Change of the Company from
the latest dates as of which such condition is set forth in the Registration Statement and the Prospectus; (ii) no action, suit
or proceeding, at law or in equity, shall have been pending or threatened against the Company or, to the Company’s knowledge,
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 cause a Material Adverse Change, except as set forth in the Registration Statement 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 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 nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4.6. Delivery
of Agreements.
4.6.1. Lock-Up
Agreements. On or before the date of this Agreement, the Company shall have delivered to the Underwriter executed copies of
the Affiliate Lock-Up Agreements or Non-Affiliate Lock-up Agreements from the persons listed in Schedule 3 hereto.
4.6.2. Underwriter’s
Warrant Agreement. On the Closing Date, the Company shall have delivered to the Underwriter executed copies of the Underwriter’s
Warrant Agreement.
4.7. Additional
Documents. At the Closing Date, Underwriter Counsel shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling Underwriter Counsel to deliver an opinion to the Underwriter, 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 Securities and the Underwriter’s Securities
as herein contemplated shall be satisfactory in form and substance to the Underwriter and Underwriter Counsel.
5. Indemnification.
5.1. Indemnification
of the Underwriter.
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the 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 Prospectus,
in any Issuer Free Writing Prospectus or in any Written Testing-the-Waters Communication (as from time to time each may be amended
and supplemented); (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 Securities and Underwriter’s Securities under the securities laws
thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities
exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, the Underwriter’s Information. With respect to any untrue statement or
omission or alleged untrue statement or omission made in the Prospectus, 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 Securities to such person as required
by the Securities Act and the Securities Act Regulations, and if the untrue statement or omission has been corrected in the Prospectus,
unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under Section
3.3 hereof.
5.1.2. Procedure.
If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to
the reasonable approval of such Underwriter Indemnified Party) and payment of actual expenses. Such Underwriter Indemnified Party
shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter Indemnified Party unless (i) the employment of such counsel at the expense of the Company shall
have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have
employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different from or additional to those available to the Company
(in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by
the Underwriter Indemnified Party (in addition to local counsel) shall be borne by the Company. Notwithstanding anything to the
contrary contained herein, if any Underwriter Indemnified Party shall assume the defense of such action as provided above, the
Company shall have the right to approve the terms of any settlement of such action, which approval shall not be unreasonably withheld.
5.2. Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the
foregoing indemnity from the Company to the several Underwriter, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in the Registration Statement or Prospectus or any amendment or supplement thereto
or in any application, in reliance upon, and in strict conformity with, the Underwriter’s Information. In case any action
shall be brought against the Company or any other person so indemnified based on the Registration Statement 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 Underwriter by the provisions of Section 5.1.2. The Company agrees promptly to
notify the Underwriter 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 Securities or in connection with the Registration Statement, 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 Section 5.2 in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriter, on the other, from the arrangement of the Offering of the Securities, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriter, 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 Underwriter, on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net
proceeds from the Offering of the Securities purchased under this Agreement (after deducting expenses) received by the Company,
as set forth in the table on the cover page of the Prospectus, on the one hand, and the Non-Accountable Expense Allowance, the
reimbursed Expenses and the total underwriting discounts and commissions received by the Underwriter with respect to the shares
of the Common Stock arranged to be purchased under this Agreement, as set forth in the table on the cover page of the Prospectus,
on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriter,
the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriter agree that it would not be just and equitable if contributions pursuant to this Section
5.3.1 were to be determined by pro rata allocation (even if the Underwriter were treated as one entity for such purpose) or
by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred
to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the Non-Accountable Expense Allowance, the reimbursed Expenses and the total underwriting discounts
and commissions received by such Underwriter with respect to the arrangement of the Offering of the Securities exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to
so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be
liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party
seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution
without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are
intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or
otherwise available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3 are several and not
joint.
6. Additional
Covenants.
6.1. Board
Composition and Board Designations. The Company shall ensure that, except as described in the Registration Statement and the
Prospectus: (i) the qualifications of the persons serving as members of the Board of Directors and the overall composition of the
Board comply with the Xxxxxxxx-Xxxxx Act, with the Exchange Act and with the listing rules of the Exchange or any other national
securities exchange, as the case may be, in the event the Company seeks to have its 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.
6.2. Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Underwriter’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 or as may be required to comply with applicable law or the requirements of the
Exchange.
7. Effective
Date of this Agreement and Termination Thereof.
7.1. Effective
Date. This Agreement shall become effective when both the Company and the Underwriter have executed the same and delivered
counterparts of such signatures to the other party.
7.2. Termination.
Either party 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 either party’s reasonable opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or the Nasdaq
Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government
authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major hostilities;
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. The Underwriter shall have the
right to terminate this Agreement at any time prior to any Closing Date, (i) 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 Network 1’s opinion, make it inadvisable to proceed with the delivery of the Securities;
or (ii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; or (iii) if the
Underwriter 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 Underwriter’s judgment would make it impracticable
to proceed with the offering, sale and/or delivery of the Securities or to enforce contracts made by the Underwriter for the sale
of the Securities.
7.3. Expenses.
Notwithstanding anything to the contrary in this Agreement, 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 Underwriter their actual and accountable out-of-pocket Expenses related to the transactions contemplated herein then
due and payable up to $75,000, inclusive of any advances for accountable expenses previously paid by the Company to the Underwriter
and any additional expenses previously reimbursed by the Company (the “Advance”) and upon demand the Company
shall pay the full amount thereof to the Underwriter on behalf of the Underwriter; 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 Underwriter will be reimbursed to the Company to the extent not actually incurred in compliance with
FINRA Rule 5110(f)(2)(C).
7.4. 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.
7.5. 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 Underwriters, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Securities.
8. Miscellaneous.
8.1. 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 Underwriter:
Network 1 Financial Securities, Inc.
Galleria, Penthouse
2 Xxxxxx Xxxxxx, Xxxxxxxx 0
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxxx, Director of Investment Banking
Fax No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx Law, LLC
2600 XX 0xx Xxx.
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Email: xxxxxx@xxxxxxxx.xxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Company:
Jerash Holdings (US), Inc.
140 X. 00xx Xxxxxx, Xxxx #0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chin Xxx Xxxx
Telephone: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx X. XxXxxxx, Esq.
Xxxxxx Xxxxxxx & Xxxxx LLP
1600 Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
8.2. 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.
8.3. Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
8.4. Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms
and conditions of that certain engagement letter between the Company and the Underwriter, dated December 6, 2017, shall remain
in full force and effect.
8.5. Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Underwriter, 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 Underwriter.
8.6. 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 8.1 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 the Underwriter 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.
8.7. Execution
in Counterparts. This Agreement may be executed in two 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.
8.8. 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 Underwriter and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute
a binding agreement between us.
|
Name: Xxxx Xxx Hung |
|
Title: President |
Confirmed as of the date first written above, on behalf of itself
as Underwriter:
NETWORK 1 FINANCIAL SECURITIES, INC.
By: |
/s/ Xxxxx X. Xxxxxxxxxx |
|
Name: Xxxxx X. Xxxxxxxxxx |
|
Title: Director of Investment Banking |
|
[SIGNATURE PAGE TO THE UNDERWRITING AGREEMENT]
SCHEDULE 1
Issuer General Use Free Writing Prospectuses
SCHEDULE 2
Written Testing-the-Waters Communications
SCHEDULE 3
List of Lock-Up Parties
Affiliate Lock-Up Parties
| 8. | Merlotte Enterprises Limited |
Non-Affiliate Lock-Up Parties
| 2. | Asset Intelligence Limited |
| 5. | HG Global Enterprises LLC |
| 7. | HSE Capital Partners, LLC |
| 9. | Xxx Amicus Investments, LLC |
| 15. | The Entrust Group Inc. |
EXHIBIT A
[Form of Subscription Agreement]
EXHIBIT B
[Form of Underwriter’s Warrant Agreement]
THE REGISTERED HOLDER OF THIS PURCHASE WARRANT,
BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE 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 CLOSING DATE OF THE OFFERING (DEFINED BELOW) TO ANYONE
OTHER THAN (I) NETWORK 1 FINANCIAL SECURITIES, INC. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR
(II) A BONA FIDE OFFICER OR PARTNER OF NETWORK 1 FINANCIAL SECURITIES, INC. OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR
TO [*] [DATE THAT IS SIX MONTHS FROM THE CLOSING DATE OF THE OFFERING]. VOID AFTER 5:00 P.M., EASTERN TIME, [*]
[DATE THAT IS FIFTH ANNIVERSARY OF EFFECTIVE DATE]
COMMON STOCK PURCHASE WARRANT
For the Purchase of [*]Shares of Common
Stock
of
JERASH HOLDINGS (US), INC.
1. Purchase
Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of [*] (“Holder”),
as registered owner of this Purchase Warrant, to Jerash Holdings (US), Inc., a Delaware corporation (the “Company”),
Holder is entitled, at any time or from time to time from [*] [DATE THAT IS 180 DAYS FROM THE CLOSING DATE OF THE OFFERING]
(the “Commencement Date”), and at or before 5:00 p.m., Eastern time, [DATE THAT IS FIFTH ANNIVERSARY OF
EFFECTIVE DATE] (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in
whole or in part, up to [*]shares (the “Warrant 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 $10.50
per Warrant Share (150% of the price of the shares of common stock sold in the proposed initial public offering of Shares
(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 Warrant Share and the number of Warrant
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”
means March 14, 2018, the date that the Company’s Registration Statement on Form S-1 (File No: 333-222596) was declared
effective under the Securities Act of 1933, as amended (the “Securities Act”), by the U.S. Securities and Exchange
Commission (the “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 Warrant 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 the time of exercise there is no effective registration statement, or the prospectus therein is not available
for the issuance, registering for resale the Warrant Shares, 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 Warrant Shares
equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to
the Company, together with the exercise form attached hereto, in which event the issue to Holder, Warrant Shares in accordance
with the following formula:
X = Y(A-B)/A
Where,
X = The number of Warrant Shares to be issued to Holder;
Y = The number of Warrant 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:
2.2.1. if
the Company’s Common Stock is traded on a securities exchange, the value shall be deemed to be the average of the closing
prices of the Shares on such exchange for the five (5) trading day period prior to the date the exercise form is submitted in connection
with the exercise of the Purchase Warrant;
2.2.2. if
the Company’s Common Stock is actively traded over-the-counter, the value shall be deemed to be the average of the closing
bid prices of the Shares for the five (5) trading day period prior to the date the exercise form is submitted in connection with
the exercise of the Purchase Warrant; or
2.2.3. 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.
Unless the Warrant Shares are registered under the Securities Act pursuant to an effective registration statement or issued pursuant
to an exemption from the registration requirements of the Securities Act, 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:
“The securities represented
by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or applicable
state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant
to an effective registration statement under the Securities Act, or pursuant to an exemption from registration under the Securities
Act and applicable state law which, in the opinion of counsel to the Company, is available.”
3. Transfer.
3.1. General
Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder
will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant for a period of one hundred eighty (180) days
following the Effective Date to anyone other than: (i) to an underwriter or a selected dealer participating in the Offering, or
(ii) a bona fide officer or partner of Network 1 Financial Securities, Inc. (“Network 1”) 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 Warrant Shares 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 Xxxxx Law, LLC 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 Commission and compliance with applicable
state securities law has been established.
4. Registration
Rights; Indemnification.
4.1. “Piggy-Back”
Registration.
4.1.1. Grant
of Right. The Holder shall have the right, for a period of no more than five (5) years from the Closing Date of the Offering
in accordance with FINRA Rule 5110(f)(2)(G)(v), to include all or any portion of the Shares underlying the Purchase Warrants (collectively,
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.
4.1.2. Terms.
The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.1.1 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 4.1.2; provided, however, that such registration rights shall terminate on the fifth anniversary of the Commencement
Date.
4.2. General
Terms.
4.2.1. Indemnification.
The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or
Section 20 (a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss,
claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with
the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriter contained in Section
5.1 of the Underwriting Agreement between the Underwriter and the Company, dated as of March 15, 2018. The Holder(s) of the
Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally,
and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable
attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from
information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in
such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the
Underwriting Agreement pursuant to which the Underwriter have agreed to indemnify the Company.
4.2.2. Exercise
of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise
their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
4.2.3. Documents
to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company
a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
4.2.4. Damages.
Should the Company fail to comply with such the provisions of Section 4.1, the Holder(s) shall, in addition to any other legal
or other relief available to the Holder(s), be entitled to seek 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
Warrant. 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 a change 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), 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, 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 such 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 Warrant Shares as
are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of
new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring
after the Commencement Date or the computation thereof.
6.2. Substitute
Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company
with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in
any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction
or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase
Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant)
to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable
upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such
Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale
or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided
for in this Section 6. The above provision of this Section shall similarly apply to successive consolidations or share reconstructions
or amalgamations.
6.3. Elimination
of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the
exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may
be, to the nearest whole number of Shares or other securities, properties or rights.
7. Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose
of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of
the Exercise Price therefor, in accordance with the terms hereof, all Shares and other securities issuable upon such exercise shall
be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the
Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable
upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on the Nasdaq Capital Market or any
other market on which the Shares issued to the public in the Offering may then be listed and/or quoted.
8. Certain
Notice Requirements.
8.1. Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to
receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder
of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event
at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination
of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of
the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder
a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is
given to the shareholders.
8.2. Events
Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following
events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings,
as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer
to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable
for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation
or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale
of all or substantially all of its property, assets and business shall be proposed.
8.3. Notice
of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to
Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall
describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the
Company’s Chief Financial Officer.
8.4. Transmittal
of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall
be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered
Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company,
to following address or to such other address as the Company may designate by notice to the Holders:
If to the Holder:
Network 1 Financial Securities, Inc.
Galleria, Penthouse
0 Xxxxxx Xxxxxx, Xxxxxxxx 0
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxxx, Director of Investment Banking
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx Law, LLC
0000 XX 0xx Xxx.
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Email: xxxxxx@xxxxxxxx.xxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Company:
Jerash Holdings (US), Inc.
000 X. 00xx Xxxxxx, Xxxx #0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chin Xxx Xxxx
Telephone: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx X. XxXxxxx, Esq.
Xxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
9. Miscellaneous.
9.1. Amendments.
The Company and Network 1 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 Network 1 may deem necessary or desirable and that the Company and Network 1 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 two 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 Network 1 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 _______, 2018.
|
Name: Xxxx Xxx Hung |
|
Title: President |
[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 Jerash Holdings (US),
Inc., a Delaware corporation (the “Company”), and hereby makes payment of $____ (at the rate of $10.50 per Share)
in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance
with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase
Warrant has not been exercised.
or
The undersigned hereby elects irrevocably to convert its right to
purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares, as determined in accordance with the following
formula:
X = Y(A-B)/A
Where,
X = The number of Shares to be issued to Holder;
Y = The number of Shares for which the Purchase Warrant
is being exercised;
A = The fair market value of one Share which is equal to
$_____; and
B = The Exercise Price which is equal to $______ per share
The undersigned agrees and acknowledges that the calculation set
forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by
the Company in its sole discretion.
Please issue the Shares as to which this Purchase Warrant is exercised
in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for
which this Purchase Warrant has not been converted.
Signature_____________________________________________
Signature Guaranteed____________________________________
INSTRUCTIONS FOR REGISTRATION OF SECURITIES:
Name: |
|
|
|
(Print in Block Letters) |
|
|
|
|
Address: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTICE: The signature to this form must correspond with the name
as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed
by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities
exchange.
[Form to be used to assign Purchase Warrant]
ASSIGNMENT
(To be executed by the registered Holder to
effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED, __________________ does hereby sell,
assign and transfer unto the right to purchase shares of common stock, par value $0.001 per share, of Jerash Holdings (US), 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__
Signature ____________________________________
Signature Guaranteed ___________________________
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must
be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national
securities exchange.
EXHIBIT C-1
[Form of Affiliate Lock-Up Agreement]
EXHIBIT C-2
[Form of Non-Affiliate Lock-Up Agreement]
EXHIBIT D
[Form of Opinion of Counsel]
EXHIBIT E
[Form of 10b-5 Letter]