Exhibit 1.1
PARETEUM CORPORATION
UNDERWRITING AGREEMENT
November 6, 2017
Xxxxxx Xxxxx Securities, Inc.
As Representative of the several Underwriters named on Schedule
1 attached hereto
0 Xxxxx Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Ladies and Gentlemen:
The undersigned, Pareteum
Corporation, a corporation formed under the laws of the State of Delaware (the “Company”), hereby confirms its
agreement (this “Agreement”) with Xxxxxx Xxxxx Securities, Inc. (the “Representative”) and
with the other underwriters, if any, named on Schedule 1 hereto for which the Representative is acting as representative
(the Representative and such other underwriters, if any, being collectively called the “Underwriters” or, individually,
an “Underwriter”) as follows:
1. Purchase
and Sale of Shares and Warrants.
(a) Firm
Shares and Firm Warrants.
(i) Nature
and Purchase of Common Stock.
(A) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an aggregate of (a) 13,043,478 shares of common stock (“Firm
Shares”) of the Company, par value $.00001 per share (the “Common Stock”), and (b) 6,521,739 five-year
warrants to purchase one share of Common Stock at an exercise price of $1.05 per share (the “Firm Warrants”
and, collectively with the Firm Shares, the “Closing Securities”). To the extent that the purchase of Firm Shares
would cause the beneficial ownership of a purchaser in the Offering, together with its affiliates and certain related parties,
to exceed 4.99% of the shares of Common Stock, the Company agrees to issue the Underwriters, for delivery to such purchasers, a
number shares of the Company’s Series B Preferred Stock (the “Preferred Shares”), which is initially convertible
on a 1-for-1,000 basis into shares of Common Stock, in lieu of the Firm Shares. The Firm Shares or Preferred Shares, as applicable,
and the Warrants (as defined below), as well as the Common Stock issuable upon exercise of the Warrants (the “Warrant
Shares”) or conversion of the Preferred Shares, are hereinafter referred to together as the “Firm Securities.”
(B)
The Underwriters, severally and not jointly, agree to purchase from the Company (a) the number of Firm Shares (or Preferred Shares)
set forth opposite their respective names on Schedule 1 and (2) Firm Warrants to purchase up to the number of shares of Common
Stock set forth opposite their respective names on Schedule 1 attached hereto. The combined purchase price for one share
of Common Stock and a Warrant to purchase 0.5 Warrant Shares shall be $0.8464 (92% of the public offering price) which shall be
allocated as $0.8418 per share of Common Stock (the “Share Purchase Price”) and $0.0046 per 0.5 Warrant (or
$0.0092 per full Warrant) (the “Warrant Purchase Price”). The Shares and Warrants are to be offered initially
to the public at the offering prices set forth on the cover page of the Prospectus (as defined in Section 2(a)(i)(A) hereof).
(ii) Share
and Warrants - Payment and Delivery.
(A) Delivery
and payment for the Firm Shares (or Preferred Shares) and Firm Warrants shall be made on or prior to 1:00 p.m., Eastern time, on
the third (3rd) Business Day following the effective date (the “Effective Date”) of the Registration
Statement (as defined in Section 2(a)(i)(A) below) if the Registration Statement is declared effective on or after 4:01 p.m., Eastern
time (or the second (2nd) Business Day following the Effective Date if the Registration Statement is declared effective
prior to 4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the
offices of Xxxxxx Xxxxxx LLP, 000 X Xxxxxx XX, Xxxxx 000, Xxxxxxxxxx XX 00000 (“Representative Counsel”), or
at such other place (or by electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and
date of delivery and payment for the Firm Shares (or Preferred Shares) and Firm Warrants is called the “Closing Date.”
(B) Payment
for the Firm Shares (or Preferred Shares) and Firm Warrants shall be made on the Closing Date by wire transfer in federal (same
day) funds, payable to the order of the Company upon delivery of the Firm Shares (or Preferred Shares) and Firm Warrants (in form
and substance satisfactory to the Underwriters) (or through the facilities of the Depository Trust Company (“DTC”)),
for the account of the Underwriters. The Firm Shares (or Preferred Shares) and Firm Warrants shall be registered in such name or
names and in such authorized denominations as the Representative may request in writing at least one (1) Business Day prior to
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.
(b) Over-Allotment
Option.
(i) Option
Securities. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares
(or Preferred Shares) and Firm Warrants, the Representative is hereby granted an option (the “Over-Allotment Option”)
to purchase, in the aggregate, (a) up to 1,956,522 shares of Common Stock (15% of the Firm Shares or Preferred Shares) at a purchase
price per share of $0.8418 (92% of the public offering price allocated to each Firm Share) (the “Option Shares”
and together with the Firm Shares and Preferred Shares, the “Shares”), and/or (b) warrants to purchase up to
978,261 shares of Common Stock (15% of the Firm Warrants) at a purchase price of $0.0092 per warrant (92% of the public offering
price allocated to each Firm Warrant) (for a full share of Common Stock) (the “Option Warrants” and together
with the Firm Warrants, the “Warrants”), which may be purchased in any combination of Option Shares and/or the
Option Warrants. The Option Shares and the Option Warrants, as well as the Common Stock issuable upon exercise of the Option Warrants,
are hereinafter referred to as the “Option Securities.” The Firm Securities and the Option Securities are collectively
referred to as the “Public Securities.” The Public Securities shall be issued directly by the Company and shall
have the rights and privileges described in the Registration Statement, the Pricing Disclosure Package and the Prospectus referred
to below. The offering and sale of the Public Securities is hereinafter referred to as the “Offering.”
(ii) Exercise
of Option. The Over-Allotment Option granted pursuant to this Section 1(b) may be exercised by the Representative as to all
(at any time) or any part (from time to time) of any combination of the Option Securities within 45 days after the execution date
of this Agreement. An Underwriter will not be under any obligation to purchase any Option Securities prior to the exercise of the
Over-Allotment Option by the Representative. The Over-Allotment Option granted hereby may be exercised by the giving of oral notice
to the Company from the Representative, which must be confirmed in writing by overnight mail or by electronic transmission setting
forth the number of Option Shares and/or Option Warrants to be purchased and the date and time for delivery of and payment for
the Option Shares and/or Option Warrants (each, an “Option Closing Date”), which will not be earlier than two
(2) Business Days nor later than three (3) full Business Days after the date of the notice or such other time as shall be agreed
upon by the Company and the Representative, at the offices of the Representative Counsel, or at such other place (including remotely
by electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the
Option Securities does not occur on the Closing Date, each Option Closing Date will be as set forth in the notice. Upon exercise
of the Over-Allotment Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions
set forth herein, the Underwriters will become obligated to purchase, the number of Option Securities specified in such notice.
The Representative may cancel the Over-Allotment Option at any time prior to the expiration of the Over-Allotment Option by written
notice to the Company (except to the extent the Representative has exercised the Over-Allotment Option in accordance herewith).
(iii) Payment
and Delivery. Payment for the Option Securities shall be made on the Option Closing Date by wire transfer in Federal (same
day) funds, payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters)
representing the Option Securities (or through the facilities of DTC) for the account of the Underwriters. The Option Securities
shall be registered in such name or names and in such authorized denominations as the Representative may request in writing prior
to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Securities except upon tender of payment
by the Representative for applicable Option Securities. The Option Closing Date may be simultaneous with, but not earlier than,
the Closing Date.
(c) Representative’s
Warrant.
(i) Representative’s
Warrant. The Company hereby agrees to issue to the Representative (and /or its designees) on the Closing Date a warrant (the
“Representative’s Warrant”) for the purchase of a number of shares of Common Stock equal to 5% of the
number of Shares issued in the Offering, pursuant to a warrant agreement in the form attached hereto as Exhibit A (the “Representative’s
Warrant Agreement”), at an initial exercise price of $1.15, which is equal to 125% of the public offering price per Share.
The Representative’s Warrant and the shares of Common Stock issuable upon exercise of the Representative’s Warrant
are hereinafter referred to together as the “Representative’s Securities.” The Representative understands
and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s
Warrant and the underlying securities during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof
shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant, or any portion thereof,
or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition
of such securities for a period of one hundred eighty (180) days following the Effective Date to anyone other than (i) an Underwriter
or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such
Underwriter or selected dealer; or as otherwise expressly permitted by Rule 5110(g), and only if any such transferee agrees to
the foregoing lock-up restrictions.
(ii) Delivery.
Delivery of the Representative’s Warrant Agreement shall be made on the Closing Date or Option Closing Date, as applicable,
and shall be issued in the name or names and in such authorized denominations as the Representative may request.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined
below) and as of the Closing Date and as of the Option Closing Date, as follows:
(a) Filing
of Registration Statement.
(i) Pursuant
to the Securities Act.
(A) 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. 333-220754), including any related prospectus or prospectuses, for
the registration of the Public Securities and the Representative’s Securities under the Securities Act of 1933, as amended
(the “Securities Act”), which registration statement and amendment or amendments have been prepared by the Company
in conformity in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission
under the Securities Act (the “Securities Act Regulations”) and will contain all material statements that are
required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the context may
otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement
became effective (including the Preliminary Prospectus included in the registration statement, financial statements, schedules,
exhibits and all other documents filed as a part thereof or incorporated therein by reference and all information deemed to be
a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “Rule
430A Information”)), is referred to herein as the “Registration Statement.” If the Company files any
registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration
Statement” shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been
declared effective by the Commission on the date hereof.
(B) Each
prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information
that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary
Prospectus.” The Preliminary Prospectus, subject to completion, dated November 6, 2017, that was included in the Registration
Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final
prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.”
Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus
included in the Registration Statement.
(C) “Applicable
Time” means 4:30 p.m., Eastern time, on the date of this Agreement.
(D)
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule
433 of the Securities Act Regulations (“Rule 433”), including without limitation any “free writing prospectus”
(as defined in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed
with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule
433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant
to Rule 433(d)(5)(i) because it contains a description of the Public Securities or of the Offering that does not reflect the final
terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule 433(g).
(E) “Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution
to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona
Fide Electronic Road Show”), as evidenced by its being specified in Schedule 2-A hereto.
(F) “Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free
Writing Prospectus.
(G) “Pricing
Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, and
the Pricing Prospectus, all considered together.
(ii) Pursuant
to the Exchange Act. The Company has previously filed 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 Common Stock.
The registration of the Common Stock under the Exchange Act has been declared effective by the Commission. The Company has taken
no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act,
nor has the Company received any notification that the Commission is contemplating terminating such registration.
(b) Stock
Exchange Listing. The Common Stock (including any Common Stock underlying the Preferred Shares, Warrants and Representative’s
Warrant) have been approved for listing on The NYSE American (the “Exchange”) and the Company has taken no action
designed to, or likely to have the effect of, delisting the Common Stock from the Exchange, nor has the Company received any notification
that the Exchange is contemplating terminating such listing.
(c) No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any
order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
(d) Subsidiaries.
Each of the Company’s subsidiaries have been duly incorporated and are validly existing as entities in good standing under
the laws of jurisdictions of their respective organization, with power and authority to own, lease and operate their respective
properties and conduct their respective businesses as described in the Preliminary Prospectus, and have been duly qualified as
foreign corporations for the transaction of business and are in good standing under the laws of each other jurisdictions in which
they own or lease properties or conduct any business so as to require such qualification, except where the failure so to qualify
or be in good standing would not have a Material Adverse Change (as defined below); all of the issued and outstanding capital stock
(or other ownership interests) of such subsidiaries has been duly and validly authorized and issued, is fully paid and non-assessable
and is owned, directly and indirectly, by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. Unless otherwise set forth, all references in this Section 2 to the “Company” shall include references
to all such subsidiaries.
(e) Disclosures
in Registration Statement.
(i) Compliance
with Securities Act and 10b-5 Representation.
(A) Each
of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including
the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto,
and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of
the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection
with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(B) Neither
the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will
omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(C) The
Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date, did not, does not and
will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing
Prospectus does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with
the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon
and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly
for use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto.
The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the following
disclosure contained in the “Underwriting” section of the Prospectus:“– Discounts and Commissions”;
“– Underwriters’ Warrant”; “– Price Stabilization, Short Positions and Penalty Bids”;
and “– Electronic Offer” (the “Underwriters’ Information”); and
(D)
Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the
time of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes
or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to the Underwriters’ Information.
(ii) Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that
have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company
is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, and (ii) is material to the Company’s business, has been duly authorized and
validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and,
to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as
enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and
(z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in material
default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice,
or both, would constitute a material default thereunder, except as disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. To the Company’s knowledge, performance by the Company of the material provisions of such agreements
or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or business (each,
a “Governmental Entity”), including, without limitation, those relating to environmental laws and regulations.
(iii) Prior
Securities Transactions. Since the beginning of the last two full fiscal years, no securities of the Company have been sold
by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control
with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
(iv) Regulations.
The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal,
state, local and all foreign laws, rules and regulations relating to the Company’s business as currently contemplated are
correct in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus which are not so disclosed.
(f) Changes
After Dates in Registration Statement.
(i) No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse
change in the financial position or results of operations of the Company, nor any change or development that, singularly or in
the aggregate, would involve a material adverse change, in or affecting the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material
transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director
of the Company has resigned from any position with the Company.
(ii) Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities
(other than (i) grants under any stock compensation plan and (ii) shares of common stock issued upon exercise or conversion of
option, warrants or convertible securities described in the Registration Statement, the Pricing Disclosure Package and the Prospectus)
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.
(g) Independent
Accountants. To the knowledge of the Company, Squar Xxxxxx LLP (the “Auditor”), whose report is filed with
the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered
public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight
Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section
10A(g) of the Exchange Act.
(h) SEC
Reports; Financial Statements, etc. As of their respective dates, the reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively
referred to herein as the “SEC Reports”) complied as to form in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The financial statements, including the notes thereto and supporting schedules included in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, fairly present in all material respects the financial position and
the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have
been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis during the
periods involved (“GAAP”), consistently applied throughout the periods involved (provided that unaudited interim
financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not
contain all footnotes required by GAAP); and the supporting schedules included in the Registration Statement present fairly in
all material respects the information required to be stated therein. Except as included therein, no historical or pro forma financial
statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the
Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related
notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled
and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and present
fairly in all material respects the information shown therein, and the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All
disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation
G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may
have a material current or future effect on the Company’s financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of
business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital
stock, (c) there has not been any change in the capital stock of the Company (other than (i) grants under any stock compensation
plan and (ii) shares of common stock issued upon exercise or conversion of option, warrants or convertible securities described
in the Registration Statement, the Pricing Disclosure Package and the Prospectus), and (d) there has not been any Material Adverse
Change in the Company’s long-term or short-term debt.
(i) Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date
the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the
Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time, on the Closing Date and any Option
Closing Date, there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued
shares of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the Company, or
any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.
(j) Valid
Issuance of Securities, etc.
(i) 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, Company preferred stock (including the Preferred Shares) and other securities
of the Company to be outstanding upon consummation of the Offering conform in all material respects to all statements relating
thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the
outstanding shares of Common Stock were at all relevant times either registered under the Securities Act and the applicable state
securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such shares,
exempt from such registration requirements.
(ii) Securities
Sold Pursuant to this Agreement. The Public Securities and Representative’s Securities have been duly authorized for
issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are
not and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative’s
Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public
Securities and Representative’s Securities has been duly and validly taken; the shares of Common Stock issuable upon conversion
of the Preferred Shares and exercise of the Warrants and Representative’s Warrants (the “Underlying Common Stock”)
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 such Warrants or Representative’s Warrants or exercised on a cashless basis as set forth
in such Warrants or Representative’s Warrants, as the case may be, or upon conversion of the Preferred Shares, such shares
of Underlying Common Stock will be validly issued, fully paid and non-assessable; the Public Securities and Representative’s
Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the
Pricing Disclosure Package and the Prospectus.
(k) Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the
Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include
any such securities in a registration statement to be filed by the Company (except for any such rights that have been waived in
writing).
(l) Validity
and Binding Effect of Agreements. This Agreement, the Warrant Agreement by and between the Company and Continental Stock Transfer
and Trust (the “Warrant Agreement”), and the Representative’s Warrant Agreement have been duly and validly
authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any
indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy
of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(m) No
Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Warrant Agreement, the Representative’s
Warrant Agreement and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated
and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or
the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute
a material default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company is a party;
(ii) result in any violation of the provisions of the Company’s Certificate of Incorporation, including without limitation,
the certificate of designation for the Preferred Shares (as the same may be amended or restated from time to time, the “Charter”)
or the by-laws of the Company (as the same may be amended or restated from time to time, the “Bylaws”); or (iii)
violate in any material respect any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity
as of the date hereof.
(n) Regulatory.
Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or as would not reasonably
be expected to result, individually or in the aggregate, in a Material Adverse Change: (i) the Company is and has been in material
compliance with statutes, laws, ordinances, rules and regulations applicable to the Company (collectively, “Applicable
Laws”); (ii) the Company possesses all licenses, certificates, approvals, clearances, consents, authorizations, qualifications,
registrations, permits, and supplements or amendments thereto required by any such Applicable Laws and/or to carry on its businesses
as now conducted (“Authorizations”) and such Authorizations are valid and in full force and effect and the Company
is not in violation of any term of any such Authorizations; (iii) the Company has not received notice of any claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third party alleging
that any product, operation or activity is in violation of any Applicable Laws or Authorizations or has any knowledge that any
such Governmental Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or
proceeding, nor, to the best of the Company’s knowledge, has there been any material noncompliance with or violation of any
Applicable Laws by the Company that could reasonably be expected to require the issuance of any such communication or result in
an investigation, corrective action, or enforcement action by a Governmental Entity; and (iv) the Company has not received notice
that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations
or has any knowledge that any such Governmental Entity has threatened or is considering such action.
(o) No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by
which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not (i) in
violation of any term or provision of its Charter or Bylaws, or (ii) in violation of any franchise, license, permit, applicable
law, rule, regulation, judgment or decree of any Governmental Entity applicable to the Company.
(p) Corporate
Power; Licenses; Consents.
(i) Conduct
of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business
purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(ii) Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained.
No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid
issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated by this
Agreement, and the Representative’s Warrant and as contemplated by the Registration Statement, the Pricing Disclosure Package
and the Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations of the Financial
Industry Regulatory Authority, Inc. (“FINRA”).
(q) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
as supplemented by all information concerning the Company’s directors, officers and principal stockholders as described in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided to the Underwriters, is true and correct
in all material respects and the Company has not become aware of any information which would cause the information disclosed in
the Questionnaires to become materially inaccurate and incorrect.
(r) Litigation;
Governmental Proceedings. There is no material action, suit, proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus which is required to be disclosed.
(s) Good
Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under the laws
of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to
qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
(t) Insurance.
The Company carries or is entitled to the benefits of insurance, with, to the Company’s knowledge, reputable insurers, and
in such amounts and covering such risks which the Company believes are reasonably adequate, and all such insurance is in full force
and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material Adverse Change.
(u) Transactions
Affecting Disclosure to FINRA.
(i) Finder’s
Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims,
payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee
by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements
or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’
compensation, as determined by FINRA.
(ii) Payments
Within Six (6) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct
or indirect affiliation or association with any FINRA member, within the six (6) months prior to the initial filing of the Registration
Statement, other than the payment to the Underwriters as provided hereunder in connection with the Offering.
(iii) 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.
(iv) FINRA
Affiliation. There is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class of the Company's
securities or (iii) beneficial owner of the Company's unregistered equity securities which were acquired during the 180-day period
immediately preceding the filing of the Registration Statement that, in each case, 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).
(v) Information.
All information provided by the Company’s officers and directors in the FINRA Questionnaire to Representative Counsel specifically
for use by Representative Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is
true, correct and complete in all material respects.
(v) Foreign
Corrupt Practices Act. Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or
affiliate of the Company or any other person acting on behalf of the Company, has, directly or indirectly, given or agreed to give
any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who
was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed
transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation
or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if not continued in the
future, might adversely affect the assets, business, operations or prospects of the Company. The Company has taken reasonable steps
to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with
the Foreign Corrupt Practices Act of 1977, as amended.
(w) Compliance
with OFAC. Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of
the Company or any other person acting on behalf of the Company, is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), and the Company will not,
directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds
to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(x) Money
Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”);
and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company, threatened.
(y) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
(z) Lock-Up
Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers and directors (collectively,
the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties to deliver to the Representative
an executed Lock-Up Agreement, in the form attached hereto as Exhibit B (the “Lock-Up Agreement”),
prior to the execution of this Agreement.
(aa) Related
Party Transactions. There are no business relationships or related party transactions involving the Company or any other person
required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described
as required.
(bb) Board
of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing
Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members and
the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Xxxxxxxx-Xxxxx Act of 2002
and the rules promulgated thereunder (the “Xxxxxxxx-Xxxxx Act”) applicable to the Company and the current 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.
(cc) Xxxxxxxx-Xxxxx
Compliance.
(i) 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 applicable to it, 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.
(ii) Compliance.
The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Xxxxxxxx-Xxxxx
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions
of the Xxxxxxxx-Xxxxx Act.
(dd) Accounting
Controls. The Company maintains systems of “internal control over financial reporting” (as defined under Rules
13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act and have been designed
by, or under the supervision of, its principal executive and principal financial officers, or persons performing similar functions,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company is not aware of any material weaknesses in its internal controls. The Auditors and the Audit Committee of the Board
of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses, if any, 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, if any, 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.
(ee) No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
(ff) No
Labor Disputes. No material labor dispute with the employees of the Company exists or, to the knowledge of the Company, is
imminent.
(gg) Intellectual
Property Rights. To the Company’s knowledge, the Company has, or can acquire on reasonable terms, ownership of and/or
license to, or otherwise has the right to use, all inventions, know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), patents and patent rights trademarks, service marks and trade
names, copyrights, (collectively “Intellectual Property”) material to carrying on its business as described
in the Pricing Prospectus. The Company has not received any correspondence relating to any Intellectual Property, including notice
of: (A) infringement or misappropriation of, or conflict with, any Intellectual Property of a third party; (B) asserted rights
of others with respect to any Intellectual Property of the Company; (C) assertions that any Intellectual Property of the Company
is invalid or otherwise inadequate to protect the interest of the Company, that in each case (if the subject of any unfavorable
decision, ruling or finding), individually or in the aggregate, would have or would reasonably be expected to have a Material Adverse
Change. There are no third parties who have been able to establish any material rights to any Intellectual Property, except for
the retained rights of the owners or licensors of any Intellectual Property that is licensed to the Company. There is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the validity, enforceability
or scope of any Intellectual Property of the Company or (B) challenging the Company’s rights in or to any Intellectual Property
or (C) that the Company materially infringes, misappropriates or otherwise violates or conflicts with any Intellectual Property
or other proprietary rights of others. The Company has complied in all material respects with the terms of each agreement described
in the Registration Statement, Pricing Disclosure Package or Prospectus pursuant to which any Intellectual Property is licensed
to the Company, and all such agreements related to products currently made or sold by the Company, or to product candidates currently
under development, are in full force and effect. All patents issued in the name of, or assigned to, the Company, and all patent
applications made by or on behalf of the Company (collectively, the “Company Patents”) have been duly and properly
filed. The Company is not aware of any material information that was required to be disclosed to the United States Patent and Trademark
Office (the “PTO”) but that was not disclosed to the PTO with respect to any issued Company Patent, or that
is required to be disclosed and has not yet been disclosed in any pending application in the Company Patents and that would preclude
the grant of a patent on such application. To the Company’s knowledge, the Company is the sole owner of the Company Patents.
(hh) Taxes.
The Company has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof
or has duly obtained extensions of time for the filing thereof. The Company has paid all taxes (as hereinafter defined) shown as
due on such returns that were filed and has paid all taxes imposed on or assessed against the Company, except for such exceptions
as could not be expected, individually or in the aggregate, to have a Material Adverse Change. The provisions for taxes payable,
if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and
unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements.
Except as disclosed in writing to the Underwriters, (i) no issues have been raised (and are currently pending) by any taxing authority
in connection with any of the returns or taxes asserted as due from the Company, 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. 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 “returns”
means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
(ii) Employee
Benefit Laws. To the extent applicable, the operations of the Company and its subsidiaries are and have been conducted at all
times in material compliance with the Employee Retirement Income Security Act of 1974, as amended, the rules and regulations thereunder
and any applicable related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Employee Benefit Laws”) and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or its subsidiaries with respect to the Employee Benefit Laws
is pending or, to the knowledge of the Company, threatened.
(jj) Compliance
with Laws. The Company: (A) is and at all times has been in compliance with all Applicable Laws, except as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any correspondence from any
Governmental Entity alleging or asserting noncompliance with any Applicable Laws or any Authorizations; (C) possesses all material
Authorizations and such Authorizations are valid and in full force and effect and the Company is not in material violation of any
term of any such Authorizations, in each case except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Change; (D) has not received written notice of any claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any Governmental Entity or third party alleging that any product operation or activity
is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental Entity or third party
is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received written
notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations;
and (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents,
forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material
respects on the date filed (or were corrected or supplemented by a subsequent submission).
(kk) Ineligible
Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness
of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities and at
the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account
of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible
issuer.
(ll) Industry
Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and
accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
(mm) Website.
To the knowledge of the Company, none of the information on (or hyperlinked from) the Company’s website at xxx.xxxxxxxx.xxx
includes or constitutes a “free writing prospectus” as defined in Rule 405 under the Securities Act.
(nn) Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without
a reasonable basis or has been disclosed other than in good faith.
(oo) 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 Underlying Common Stock to be considered a “purpose credit” within the meanings of Regulation
T, U or X of the Federal Reserve Board.
(pp) Integration.
Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering
to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of
any such securities under the Securities Act.
(qq) Confidentiality
and Non-Competition. To the Company’s knowledge, no director, officer, key employee or consultant of the Company is subject
to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer or prior employer
that could reasonably be expected to materially affect his ability to be and act in his respective capacity of the Company or be
expected to result in a Material Adverse Change.
(rr) Smaller
Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting company,”
as defined in Rule 12b-2 of the Exchange Act Regulations.
3. Covenants
of the Company. The Company covenants and agrees as follows:
(a) Amendments
to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to
the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement
to which the Representative shall reasonably object in writing; provided however, that this Section 3(a) shall not be applicable
with respect to any supplements to the Registration Statement filed solely for the purpose of supplementing the Registration Statement
or Prospectus with a report filed with the Commission by the Company pursuant to the Exchange Act.
(b) Federal
Securities Laws.
(i) Compliance.
The Company shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will notify the Representative
promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become
effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt of any comments from
the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public Securities and Representative’s
Securities for offering or sale in any jurisdiction, or of the initiation or, to the Company’s knowledge, threatening, of
any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning
the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities
Act in connection with the Offering of the Public Securities and Representative’s Securities. The Company shall effect all
filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule
424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company shall use its best efforts to prevent the issuance of any stop order,
prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
(ii) Continued
Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange
Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and
in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to
the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company,
to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;
(ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or
the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to
a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus,
as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company
will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies
of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company
shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably
object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters
may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the
Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice of its
intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full or expiration
of the Over-allotment Option specified in Section 1(b) hereof and will furnish the Representative with copies of the related document(s)
a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which
the Representative or counsel for the Underwriters shall reasonably object.
(iii) Exchange
Act Registration. Until the date on which no Warrants are outstanding, the Company shall use its commercially reasonable efforts
to maintain the registration of the Common Stock under the Exchange Act.
(iv) Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall
not make, prior to the Closing Date (or, if applicable, the Option Closing Date), any offer relating to the Public Securities that
would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,”
or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided
that the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus and any “road
show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representative.
The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed
consented to, by the Underwriters as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied
and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission
where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred
or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing
at that subsequent time, not misleading, the Company will promptly notify the Underwriters and will promptly amend or supplement,
at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(c) Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally
filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and
each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each
Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by
Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) Events
Requiring Notice to the Representative. The Company shall notify the Representative immediately and confirm the notice in writing:
(i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission
of any stop order or of the initiation, or to the Company’s knowledge, the threatening, of any proceeding for that purpose;
(iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the
Public Securities for offering or sale in any jurisdiction or of the initiation, or to the Company’s knowledge, the threatening,
of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement
to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information
from the Commission; and (vi) of the happening of any event during the period described in this Section 3(e) that, in the
judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package
or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements
therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall
enter a stop order or suspend such qualification at any time, the Company shall make every reasonable effort to obtain promptly
the lifting of such order.
(f) Listing.
The Company shall use its commercially reasonable efforts to maintain the listing of the shares of Common Stock on the Exchange
until the date that no Warrants are outstanding.
(g) Transfer
Agent. The Company shall maintain a transfer agent and registrar for the Common Stock.
(h) Payment
of Expenses. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, to the extent not paid
at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including,
but not limited to: (a) all filing fees and communication expenses relating to the registration of the Public Securities to be
sold in the Offering with the Commission; (b) all actual Public Offering Filing System filing fees associated with the review of
the Offering by FINRA; (c) all fees and expenses relating to the listing of the Common Stock on the Exchange; (d) all fees, expenses
and disbursements relating to the registration or qualification of the Public Securities under the “blue sky” securities
laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all
filing and registration fees, and the reasonable fees and disbursements of “blue sky” counsel, not to exceed $25,000);
(e) all actual fees, expenses and disbursements relating to the registration, qualification or exemption of the Public Securities
under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (f) the costs of all mailing
and printing of the Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary
and final Prospectuses as the Representative may reasonably deem necessary; (g) transfer and/or stamp taxes, if any, payable upon
the transfer of securities from the Company to the Underwriters; (h) the fees and expenses of the Company’s accountants;
and (i) “road show” expenses, diligence expenses and legal fees of Xxxxxx’x counsel not to exceed in the aggregate
$125,000. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or any
Option Closing Date, if any, the expenses set forth herein (as limited by sub-Section 3(h)(i)) to be paid by the Company to the
Underwriters, provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters
pursuant to Section 8(c) hereof.
(i) Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
(j) Rule
158. The Company will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available
to its security holders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the
benefits contemplated by, Rule 158(a) under Section 11(a) of the Securities Act.
(k) Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent of the Representative)
has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Public Securities.
(l) 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.
(m) Accountants.
The Company shall retain an independent registered public accounting firm reasonably acceptable to the Representative, and the
Company shall continue to retain a nationally recognized independent registered public accounting firm for a period of at least
three (3) years after the date of this Agreement. The Representative acknowledges that the Auditors are acceptable to the Representative.
(n) FINRA.
For a period of 90 days from the later of the Closing Date or the Option Closing Date, the Company shall advise the Representative
(who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii)
any beneficial owner of 5% or more of any class of the Company's securities or (iii) any beneficial owner of the Company's unregistered
equity securities which were acquired during the 180 days immediately preceding the filing of the Registration Statement is or
becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the
rules and regulations of FINRA).
(o) No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in
a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this Agreement.
(p) Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that it will not, for a period
of 90 days after the date of this Agreement (the “Lock-Up Period”), without the prior written consent of the
Representative (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of
any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company other than the filing of a Registration Statement on Form S-8; (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; or (iv) publicly announce an intention to effect any transaction
specified in clause (i), (ii) or (iii). The restrictions contained in this section shall not apply to (i) offerings by the Company
on its existing shelf registration statement, (ii) a financing undertaken by the Company whereby it issues equity securities in
order to address its shareholder deficit as a part of shareholders’ equity and balance sheet clean up, (iii) any capital
raising efforts related to the restructuring of senior secured debt or conversion of existing debt, (iv) the issuance of shares
to vendors at a price not below the then current market price for the Company’s common stock, (v) investments in the Company
by certain European investors affiliated with the Company and/or its directors, and (vi) a capital infusion by a strategic investor.
(q) Blue
Sky Qualifications. The Company shall use its reasonable best efforts, in cooperation with the Underwriters, if necessary,
to qualify the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to
complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise
so subject.
(r) Reporting
Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations.
Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under
Rule 463 under the Securities Act Regulations.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided
herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof
and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the
following conditions:
(a) Regulatory
Matters.
(i) 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 the Representative,
and, at each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereto shall have been issued under the Securities Act, no order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus shall have been issued and no proceedings for any of those purposes 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.
(ii) FINRA
Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount
of compensation allowable or payable to the Underwriters as described in the Registration Statement.
(iii) Exchange
Stock Market Clearance. On the Closing Date, the Common Stock shall have been approved for listing on the Exchange, subject
only to official notice of issuance. On each Option Closing Date (if any), the Option Shares shall have been approved for listing
on the Exchange, subject only to official notice of issuance.
(b) Company
Counsel Matters.
(i) Closing
Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion and negative assurance
letter of Sichenzia Xxxx Xxxxxxx Xxxxxx LLP, counsel to the Company, dated the Closing
Date and addressed to the Representative, substantially in form and substance reasonably satisfactory to the Representative.
(ii) Option
Closing Date Opinion of Counsel. On each Option Closing Date, if any, the Representative shall have received the favorable
opinion of Sichenzia Xxxx Xxxxxxx Xxxxxx LLP, dated the Option Closing Date, addressed
to the Representative and in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing
Date, the statements made by such counsel in its respective opinions delivered on the Closing Date.
(iii) Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of
other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to
the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Representative Counsel if requested.
(c) Comfort
Letters.
(i) Comfort
Letter. At the time this Agreement is executed the Representative shall have received a cold comfort letter from the Auditor
containing statements and information of the type customarily included in accountants’ comfort letters with respect to the
financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to the Representative
and to the Auditor, dated as of the date of this Agreement.
(ii) Bring-down
Comfort Letter. At the Closing Date and each Option Closing Date, if any, the Representative shall have received from the Auditor
a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that such Auditor reaffirms the
statements made in the letter furnished pursuant to Section 4(c)(i), except that the specified date referred to shall be a date
not more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.
(d) Officers’
Certificates.
(i) Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing
Date (if such date is other than the Closing Date), of its President and Chief Executive Officer, and its Chief Financial Officer
stating on behalf of the Company and not in an individual capacity that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration
Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date and any Option Closing Date (if such
date is other than the Closing Date), did not include any untrue statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package,
as of the Applicable Time and as of the Closing Date and any Option Closing Date (if such date is other than the Closing Date),
any Issuer Free Writing Prospectus as of its date and as of the Closing Date the Prospectus and each amendment or supplement thereto,
as of the respective date thereof and as of the Closing Date and any Option Closing Date (if such date is other than the Closing
Date), did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective
date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the
Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to their knowledge after reasonable investigation,
as of the Closing Date and any Option Closing Date (if such date is other than the Closing Date), the representations and warranties
of the Company in this Agreement are true and correct in all material respects (except for those representations and warranties
qualified as to materiality, which shall be true and correct in all respects and except for those representations and warranties
which refer to facts existing at a specific date, which shall be true and correct as of such date) and the Company has complied
with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing
Date and any Option Closing Date (if such date is other than the Closing Date), and (iv) there has not been, subsequent to the
date of the most recent audited financial statements included in the Pricing Disclosure Package, any Material Adverse Change in
the financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate,
would involve a Material Adverse Change, in or affecting the condition (financial or otherwise), results of operations, business,
assets or prospects of the Company, except as set forth in the Prospectus.
(ii) Secretary’s
Certificate. At each of the Closing Date and any Option Closing Date, the Representative 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) the good standing of
the Company; 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.
(e) No
Material Changes. Prior to and on each of the Closing Date and each Option Closing Date: (i) there shall have been no
Material Adverse Change or development involving a prospective Material Adverse Change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration
Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall
have been pending or threatened against the Company or any Insider before or by any court or federal or state commission, board
or other administrative agency wherein an unfavorable decision, ruling or finding would reasonably be expected to result in a Material
Adverse Change, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no
stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened
by the Commission; and (iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments
or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities
Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and
the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any
amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not
misleading.
(f) Delivery
of Agreements.
(i) Lock-Up
Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the Company’s directors and officers.
(ii) Warrant
Agreement. On the Closing Date, the Company shall have delivered to the Representative an executed copy of the Warrant Agreement.
(iii) Representative’s
Warrant Agreement. On the Closing Date and at each Option Closing Date, the Company shall have delivered to the Representative
executed copies of the Representative’s Warrant Agreement.
(g) Additional
Documents. At the Closing Date and at each Option Closing Date, Representative Counsel shall have been furnished with such
documents and opinions as they may require in order to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance
and sale of the Public Securities and the Representative’s Securities as herein contemplated shall be satisfactory in form
and substance to the Representative and Representative Counsel.
5. Indemnification.
(a) Indemnification
of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates and each person controlling
such Underwriter (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of
each Underwriter, its affiliates and each such controlling person (each Underwriter, and each such entity or person hereafter is
referred to as an “Indemnified Person”) from and against any losses, claims, damages, judgments, assessments,
costs and other liabilities (collectively, the “Liabilities”), and shall reimburse each Indemnified Person for
all fees and expenses (including the reasonable fees and expenses of counsel for the Indemnified Persons, except as otherwise expressly
provided in this Agreement) (collectively, the “Expenses”) and agrees to advance payment of such Expenses as
they are incurred by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified
Person is a party thereto, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained
in (i) the Registration Statement, the Pricing Disclosure Package, the Preliminary Prospectus, the Prospectus or in any Issuer
Free Writing Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided
to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road
show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application
or other document or written communication (in this Section 5, collectively called “application”) executed by the Company
or based upon written information furnished by the Company in any jurisdiction in order to qualify the Public Securities and Representative’s
Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange
or any other national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading,
unless such statement or omission was made in reliance upon, and in conformity with, the Underwriters’ Information. The Company
also agrees to reimburse each Indemnified Person for all Expenses as they are incurred in connection with such Indemnified Person's
enforcement of his or its rights under this Agreement.
(b) Procedure.
Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to which indemnity
may reasonably be expected to be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing;
provided that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any obligation or liability
which the Company may have on account of this Section 5 or otherwise to such Indemnified Person, except to the extent the Company
is materially prejudiced as a proximate result of such failure. The Company shall have the right to assume the defense of any such
action (including the employment of counsel designated by the Company and reasonably satisfactory to the Representative). Any Indemnified
Person shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to
assume the defense and employ counsel reasonably satisfactory to the Representative for the benefit of the Underwriters and the
other Indemnified Persons or (ii) such Indemnified Person shall have been advised that in the opinion of counsel that there is
an actual or potential conflict of interest that prevents (or makes it imprudent for) the counsel engaged by the Company for the
purpose of representing the Indemnified Person, to represent both such Indemnified Person and any other person represented or proposed
to be represented by such counsel. The Company shall not be liable for the fees and expenses of more than one separate counsel
(together with local counsel), representing all Indemnified Persons who are parties to such action), which counsel (together with
any local counsel) for the Indemnified Persons shall be selected by the Representative. The Company shall not be liable for any
settlement of any action effected without its written consent (which shall not be unreasonably withheld). In addition, the Company
shall not, without the prior written consent of the Underwriters, settle, compromise or consent to the entry of any judgment in
or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification
or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination (i) includes an unconditional release of each Indemnified Person, from all Liabilities arising out of such
action for which indemnification or contribution may be sought hereunder and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Person. The advancement, reimbursement,
indemnification and contribution obligations of the Company required hereby shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as every Liability and Expense is incurred and is due and payable, and in such
amounts as fully satisfy each and every Liability and Expense as it is incurred (and in no event later than 30 days following the
date of any invoice therefore).
(c) 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 Liabilities, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing
Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict
conformity with, the Underwriters’ Information. In case any action shall be brought against the Company or any other person
so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or
any amendment or supplement thereto or in any application, and in respect of which indemnity may be sought against any Underwriter,
such Underwriter shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall
have the rights and duties given to the several Underwriters by the provisions of Section 5(b). The Company agrees promptly to
notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors
or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, in connection with the issuance and sale of the Public Securities or in connection with the Registration Statement, the Pricing
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus; provided that failure by the Company so to notify the
Representative shall not relieve any Underwriter from any obligation or liability which such Underwriter may have on account of
this Section 5 or otherwise to the Company, except to the extent such Underwriter is materially prejudiced as a proximate result
of such failure.
(d) Contribution.
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(a) or 5(c) in respect of any Liabilities and Expenses 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 Liabilities and Expenses, (i) in such proportion as shall be appropriate to reflect the relative benefits received
by the Company, on the one hand, and each of the Underwriters, on the other hand, from the Offering, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on
the other hand, in connection with the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect
to such Offering shall be deemed to be in the same proportion as the total proceeds from the Offering purchased under this Agreement
(before deducting expenses) received by the Company bear to the total underwriting discount and commissions actually received by
the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company, on the one hand, and the Underwriters, on the other, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand, or the Underwriters, on the other, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement, omission, act or
failure to act; provided that the parties hereto agree that the written information furnished to the Company through the Representative
by or on behalf of any Underwriter for use in any Preliminary Prospectus, any Registration Statement or the Prospectus, or in any
amendment or supplement thereto, consists solely of the Underwriters’ Information. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take
into account the equitable considerations referred to above in this subsection (d). Notwithstanding the above, no person guilty
of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from
a party who was not guilty of fraudulent misrepresentation.
(e) Limitation.
The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant
to this Agreement, the transactions contemplated thereby or any Indemnified Person's actions or inactions in connection with any
such advice, services or transactions, except to the extent that a court of competent jurisdiction has made a finding that Liabilities
(and related Expenses) of the Company have resulted primarily from such Indemnified Person's gross negligence or willful misconduct
in connection with any such advice, actions, inactions or services.
(f) Survival.
The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 5 shall remain in full force and
effect regardless of any termination of, or the completion of any Indemnified Person's services under or in connection with, this
Agreement.
6. Default
by an Underwriter.
(a) Default
Not Exceeding 10% of Securities. If any Underwriter or Underwriters shall default in its or their obligations to purchase the
Closing Securities or the Option Securities, if the Over-allotment Option is exercised hereunder, and if the number of the Closing
Securities or Option Securities with respect to which such default relates does not exceed in the aggregate 10% of the number of
Closing Securities or Option Securities that all Underwriters have agreed to purchase hereunder, then such Closing Securities or
Option Securities to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective
commitments hereunder.
(b) Default
Exceeding 10% of Securities. In the event that the default addressed in Section 6(a) relates to more than 10% of the Closing
Securities or Option Securities, the Representative may in its discretion arrange for itself or for another party or parties to
purchase such Closing Securities or Option Securities to which such default relates on the terms contained herein. If, within one
(1) Business Day after such default relating to more than 10% of the Closing Securities or Option Securities, the Representative
does not arrange for the purchase of such Closing Securities or Option Securities, then the Company shall be entitled to a further
period of one (1) Business Day within which to procure another party or parties satisfactory to the Representative to purchase
said Closing Securities or Option Securities on such terms. In the event that neither the Representative nor the Company arrange
for the purchase of the Closing Securities or Option Securities to which a default relates as provided in this Section 6, this
Agreement will automatically be terminated by the Representative or the Company without liability on the part of the Company (except
as provided in Sections 3(h) and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however,
that if such default occurs with respect to the Option Securities, this Agreement will not terminate as to the Closing Securities;
and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters
and to the Company for damages occasioned by its default hereunder.
(c) Postponement
of Closing Date. In the event that the Closing Securities or Option Securities to which the default relates are to be purchased
by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the
Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event
exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement,
the Pricing Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly
any amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for
the Underwriter may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include
any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement with respect
to such Securities.
7. Additional
Covenants.
(a) Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st)
Business Day following the forty-fifth (45th) day after the Closing Date, other than normal and customary releases issued
in the ordinary course of the Company’s business
(b) Tail
Financing. The Representative shall be entitled to the compensation set forth herein with respect to any public or private
offering or other financing or capital-raising transaction of any kind (“Tail Financing”) to the extent that
such Tail Financing is provided to the Company by any investors in this offering, if such Tail Financing is consummated at any
time within the 6-month period following the Closing Date.
8. Effective
Date of this Agreement and Termination Thereof.
(a) Effective
Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
(b) Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic
or international event or act or occurrence has materially disrupted, or in Representative’s opinion will in the immediate
future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange
or the NASDAQ Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or
any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war
or an increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority;
or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States
securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in Representative
opinion, make it inadvisable to proceed with the delivery of the Closing Securities; or (vii) if the Company is in material
breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become
aware after the date hereof of such a Material Adverse Change in the conditions or prospects of the Company, or such adverse material
change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering,
sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for the sale of the Public Securities.
Section 5 of this Agreement shall survive any termination of this Agreement.
(c) Expenses.
Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters pursuant to Section
6(b) above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein
or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable and upon demand; provided,
that the fees and expenses shall not exceed the amounts set forth in Section 3(h); and provided, however, that such expense cap
in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any
advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with
FINRA Rule 5110(f)(2)(C).
(d) 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.
(e) Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9. Miscellaneous.
(a) 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), or personally delivered and shall be deemed given when so delivered or if mailed,
two (2) days after such mailing.
If to the Representative:
Xxxxxx Xxxxx Securities, Inc.
0 Xxxxx Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
If to the Company:
Pareteum Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
(b) 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.
(c) Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
(d) 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.
(e) Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
each Indemnified Person referred to in Section 5, the Company and the controlling persons, directors and officers referred to in
Section 5 hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any
provisions herein contained. The term “successors and assigns” shall not include a purchaser, in its capacity as such,
of securities from any of the Underwriters.
(f) Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that
any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced
in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to
such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9(a) hereof. Such mailing shall be deemed personal service and shall be legal
and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating
to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
(g) Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by email/pdf transmission shall constitute
valid and sufficient delivery thereof.
(h) Waiver,
etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof
or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance
or non-fulfillment.
[Signature Page Follows]
If the foregoing correctly sets forth the
understanding between the Underwriters and the Company, please so indicate in the space provided below.
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Very truly yours, |
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Pareteum Corp. |
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By: |
/s/ Xxxxxx X. Xxxxxx |
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Name: Xxxxxx X. Xxxxxx |
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Title: Executive Chairman |
Confirmed as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on Schedule 1 hereto: |
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Xxxxxx Xxxxx Securities, Inc. |
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By: |
/s/ Xxxxxx X. Xxxxxx, Xx. |
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Name: Xxxxxx X. Xxxxxx, Xx. |
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Title: Chief Executive Officer |
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On behalf of each of the Underwriters |
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[Signature
Page]
Pareteum Corp. –
Underwriting Agreement
SCHEDULE 1
Underwriter | |
Total Number of Shares to be Purchased | | |
Number of Shares to be Purchased if the Over- Allotment Option is Fully Exercised | | |
Total Number of Warrants to be Purchased | | |
Number of Warrants to be Purchased if the Over-Allotment Option is Fully Exercised | |
| |
| | |
| | |
| | |
| |
Xxxxxx Xxxxx Securities, Inc. | |
| 9,782,609 | | |
| 11,250,000 | | |
| 4,891,304 | | |
| 5,625,000 | |
Viewtrade Securities, Inc. | |
| 3,260,869 | | |
| 3,750,000 | | |
| 1,630,435 | | |
| 1,875,000 | |
Total | |
| 13,043,478 | | |
| 15,000,000 | | |
| 6,521,739 | | |
| 7,500,000 | |
SCHEDULE 2-A
Issuer General Use Free Writing Prospectuses
None.
EXHIBIT A
Form of Representative’s Warrant
Agreement
THE REGISTERED HOLDER
OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT
AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR
HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
OTHER THAN (I) XXXXXX XXXXX SECURITIES, INC. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A
BONA FIDE OFFICER OR PARTNER OF XXXXXX XXXXX SECURITIES, INC OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT
IS NOT EXERCISABLE PRIOR TO [●], 2018. VOID AFTER 5:00 P.M., EASTERN TIME, [●], 2022.
COMMON STOCK PURCHASE WARRANT
For the Purchase of [●] Shares of
Common Stock
of
PARETEUM CORP.
1. Purchase
Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of XXXXXX XXXXX SECURITIES, INC (“Holder”),
as registered owner of this Purchase Warrant, to PARETEUM CORP., a Delaware corporation (the “Company”), Holder
is entitled, at any time or from time to time from [●], 2018 (the “Commencement Date”), and at or before
5:00 p.m., Eastern time, [●], 2022 (the ”Expiration Date”), but not thereafter, to subscribe
for, purchase and receive, in whole or in part, up to [●] shares of common stock of the Company, par value $0.0001 per share
(the “Shares”), subject to adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which
banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which
is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not
to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable at $[●] per
Share; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights
granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise,
shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the
adjusted exercise price, depending on the context.
2. Exercise.
2.1 Exercise
Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and
delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased
payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or
official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time,
on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented
hereby shall cease and expire.
2.2 Cashless
Exercise. In lieu of exercising this Purchase Warrant by payment of cash or check payable to the order of the Company
pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or
the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form attached
hereto, in which event the Company will issue to Holder Shares in accordance with the following formula:
Where, |
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X |
= |
The number of Shares to be issued to Holder; |
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Y |
= |
The number of Shares for which the Purchase Warrant is being exercised; |
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A |
= |
The fair market value of one Share; and |
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B |
= |
The Exercise Price. |
For purposes of this
Section 2.2, the fair market value of a Share is defined as follows:
| (i) | if the Company’s common stock is traded on a
national securities exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being
submitted in connection with the exercise of the Purchase Warrant; or |
| (ii) | if the Company’s common stock is actively traded
over-the-counter, the value shall be deemed to be the closing bid prior to the exercise form being submitted in connection with
the exercise of the Purchase Warrant; if there is no active public market, the value shall be the fair market value thereof, as
determined in good faith by the Company’s Board of Directors. |
2.3 Legend.
Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities
have been registered under the Securities Act of 1933, as amended (the “Act”):
“The securities
represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”),
or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the 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 commencement of sales in the public offering referenced in the Underwriting Agreement (defined below) (the “Effective
Date”) to anyone other than: (i) Xxxxxx Xxxxx Securities, Inc. (“Xxxxxx”) or an underwriter or a selected
dealer participating in the Offering, or (ii) a bona fide officer or partner of Xxxxxx 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). 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 Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company
has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration
under the 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 Xxxxxx Xxxxxx LLP shall be deemed satisfactory evidence of the availability
of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration Statement relating to the
offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange Commission
(the “Commission”) and compliance with applicable state securities law has been established. The Company
acknowledges that this Purchase Warrant and the Shares have been registered pursuant to the Registration Statement (as defined
in the Underwriting Agreement).
4. Registration
Rights.
4.1 Grant
of Right. The Holder shall have the right to include 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.
4.2 Terms.
The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to this Section 4 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 ten (10) 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 registered for resale under the Act
or 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; provided, however, that such “piggy-back” registration rights shall terminate
on the fifth anniversary of the Effective Date in accordance with FINRA Rule 5110(f)(2)(G)(v).
4.3 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 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 Act, the Exchange Act or otherwise, arising from such registration
statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify
the Underwriters contained in Section 9 of the Underwriting Agreement between Xxxxxx and the Company, dated as of [●], 2017
(the “Underwriting Agreement”). 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 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 9 of the Underwriting
Agreement pursuant to which Xxxxxx has agreed to indemnify the Company.
4.3 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.
4.4 Documents
Delivered to Holders. The Company shall deliver promptly to each Holder participating in the offering requesting the correspondence
and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and
the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to
the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities
to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable
times, during normal business hours, as any such Holder shall reasonably request.
4.5 Underwriting
Agreement. If the Company shall enter into an underwriting agreement, pursuant to which Registrable Securities of a Holder
are being registered, such Holders shall not be required to make any representations or warranties to or agreements with the Company
or the underwriters except as they may relate to such Holders, their Shares and their intended methods of distribution.
4.6 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.
4.7 Damages.
Should the Company fail to comply with the provisions of this Section 4, 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
Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver
a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
6. Adjustments.
6.1 Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall
be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Share
Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding
Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective
day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares,
and the Exercise Price shall be proportionately decreased.
6.1.2 Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares
is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date
thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and
the Exercise Price shall be proportionately increased.
6.1.3 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than
a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share
reconstruction or amalgamation or consolidation or merger of the Company with or into another corporation (other than a consolidation
or share reconstruction or amalgamation or merger in which the Company is the continuing corporation and that does not result in
any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation
or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of
this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately
prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such
sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately
prior to such event; and if any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such
adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly
apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other
transfers.
6.1.4 Changes
in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section
6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated
in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase
Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the
Commencement Date or the computation thereof.
6.2 Substitute
Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation or merger of the
Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation or merger 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 or merger, 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 or merger, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which
shall be identical to the adjustments provided for in this Section 6. The above provision of this Section shall similarly apply
to successive consolidations or share reconstructions or amalgamations.
6.3 Elimination
of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the
exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may
be, to the nearest whole number of Shares or other securities, properties or rights.
7. Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose
of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of
the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall
be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company
further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares
and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject
to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially
reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice
of issuance) on all national securities exchanges (or, if applicable, quoted on the OTC Bulletin Board or any successor trading
market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.
8. Certain
Notice Requirements.
8.1 Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to
receive notice as a 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 ten (10) 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:
Xxxxxx Xxxxx Securities, Inc.
0 Xxxxx Xxxxxxx Xxxxxxx – 5th Floor
Xxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
If to the Company:
Pareteum Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
9. Miscellaneous.
9.1 Amendments.
The Company and Xxxxxx 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 Xxxxxx may xxxx necessary or desirable and that the Company and Xxxxxx xxxx 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 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 Xxxxxx 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 [●], 2017.
[Form to be used to exercise Purchase
Warrant]
Date: __________, 20___
The undersigned hereby
elects irrevocably to exercise the Purchase Warrant for ______ shares of common stock, par value $0.0001 per share (the “Shares”),
of Pareteum Corp., a Delaware corporation (the “Company”), and hereby makes payment of $____ (at the rate of
$____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is
exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of
Shares for which this Purchase Warrant has not been exercised.
or
The undersigned
hereby elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares,
as determined in accordance with the following formula:
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The undersigned
agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with
respect to the calculation shall be resolved by the Company in its sole discretion.
Please issue
the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a
new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES |
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NOTICE: The signature
to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership
on a registered national securities exchange.
[Form to be used to assign Purchase Warrant]
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED,
__________________ does hereby sell, assign and transfer unto the right to purchase shares of Common Stock, par value $0.0001 per
share, of Pareteum Corp., a Delaware corporation (the “Company”), evidenced by the Purchase Warrant and does
hereby authorize the Company to transfer such right on the books of the Company.
Dated: __________, 20__
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must
be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national
securities exchange.
EXHIBIT B
Form of Lock-Up Agreement
Lock-Up Agreement
November 6, 2017
Xxxxxx Xxxxx Securities, Inc.
0 Xxxxx Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands
that Xxxxxx Xxxxx Securities, Inc. (the “Representative”) proposes to enter into an Underwriting Agreement (the
“Agreement”) with Pareteum Corporation, a Delaware corporation (the “Company”), providing
for the public offering (the “Public Offering”) of securities of the Company, including shares (the “Shares”)
of the Company’s common stock, par value $0.0001 per share (the “Common Stock”).
To induce the Representative
to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent
of the Representative, the undersigned will not, during the period commencing on the date hereof and ending 90 days after the date
of the final prospectus (the “Prospectus”) relating to the Public Offering (the “Lock-Up Period”),
(1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Common
Stock, any securities convertible into or exercisable or exchangeable for Common Stock, whether now owned or hereafter acquired
by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the
“Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise
any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer,
sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the
prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open
market transactions after the completion of the Public Offering; provided that no filing under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall be required or shall be voluntarily
made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up
Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of a family member (for
purposes of this lock-up agreement, “family member” means any relationship by blood, marriage or adoption, not more
remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; or (d) if the undersigned,
directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers
of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the
case may be; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such
transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up
agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 16(a) of the Exchange Act
shall be required or shall be voluntarily made. The undersigned also agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except
in compliance with this lock-up agreement.
Any release or waiver
granted by the Representative hereunder to any officer or director shall only be effective two (2) business days after the publication
date of a press release announcing such release or waiver. The provisions of this paragraph will not apply if (a) the release or
waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in
writing to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain
in effect at the time of such transfer.
No provision in this
agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities exercisable
or exchangeable for or convertible into Common Stock, as applicable; provided that the undersigned does not transfer the
Common Stock acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to
the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or
modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in
such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period).
The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors and assigns.
The undersigned understands
that, if the Agreement is not executed by November 15, 2017, or if the Agreement (other than the provisions thereof which survive
termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, then this
lock-up agreement shall be void and of no further force or effect.
Whether or not the
Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made
pursuant to an Agreement, the terms of which are subject to negotiation between the Company and the Representative.
[SIGNATURE PAGE TO FOLLOW]
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(Signature) |
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(Name of Signatory, in the case of entities - Please Print) |
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(Title of Signatory, in the case of entities - Please Print) |
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