ISORAY, INC.
AMENDED and RESTATED UNDERWRITING AGREEMENT
August 28, 2013
Maxim Group LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
As the Representative of the
several underwriters, if any, named in Schedule I hereto
Ladies and Gentlemen:
The undersigned, Isoray,
Inc., a company incorporated under the laws of Minnesota (collectively with its subsidiaries and affiliates, the “Company”),
hereby confirms its agreement (this “Agreement”) with the several underwriters (such underwriters, including
the Representative (as defined below), the “Underwriters” and each an “Underwriter”) named
in Schedule I hereto for whom Maxim Group LLC is acting as representative to the several Underwriters (the “Representative”
and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the
term Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.
It is understood that
the several Underwriters are to make a public offering of the Public Securities as soon as the Representative deems it advisable
to do so. The Public Securities are to be initially offered to the public at the initial public offering price set forth in the
Prospectus Supplement. The Representative may from time to time thereafter change the public offering price and other selling terms.
It is further understood
that you will act as the Representative for the Underwriters in the offering and sale of the Closing Securities in accordance with
this Agreement.
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Action”
shall have the meaning ascribed to such term in Section 3.1(k).
“Affiliate”
means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or
is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities
Act.
“Base
Prospectus” means the prospectus in the form included in the Registration Statement.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.
“Closing”
means the closing of the purchase and sale of the Closing Securities pursuant to Section 2.1.
“Closing
Date” means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters’
obligations to pay the Closing Purchase Price and (ii) the Company’s obligations to deliver the Closing Securities, in each
case, have been satisfied or waived, but in no event later than 10:00 a.m. (New York City time) on the third Trading Day following
the date hereof or at such earlier time as shall be agreed upon by the Representative and the Company.
“Closing
Purchase Price” shall have the meaning set forth in Section 2.1(b).
“Closing
Securities” shall have the meaning ascribed to such term in Section 2.1(a)(ii).
“Closing
Shares” means the shares of Common Stock being sold hereunder.
“Conversion
Shares” means the Common Stock issuable upon conversion of the Series D Preferred Stock.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Closing Units” shall have the meaning ascribed to such term in Section 2.1(a)(i).
“Common
Stock” means the common stock of the Company, $0.001 par value per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“Company
Auditor” means DeCoria, Maichel & Xxxxxx, X.X., with offices located at 0000 X. Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx
00000.
“Company
Counsel” means Xxxxxx Xxxxxxxx P.L.C with offices located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx
00000-0000.
“Controlling
Person” shall have the meaning ascribed to such term in Section 6.1.
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Effective
Date” shall have the meaning ascribed to such term in Section 3.1(f).
“EGS”
means Ellenoff Xxxxxxxx & Schole LLP, with offices located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Execution
Date” shall mean the date on which the parties execute and enter into this Agreement.
“Exempt
Issuance” means the issuance of (a) Common Stock or options to employees, officers or directors of the Company pursuant
to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible
into Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since
the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion
price of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of
the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“FDA”
shall have the meaning ascribed to such term in Section 3.1(gg).
“FDCA”
shall have the meaning ascribed to such term in Section 3.1(gg).
“FINRA”
means the Financial Industry Regulatory Authority, Inc.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(i).
“Incorporated
Documents” shall be deemed to refer to and include the documents incorporated by reference in the Registration Statement,
the Base Prospectus or the Time of Sale Prospectus pursuant to Item 12 of Form S-3 which documents were filed under the Exchange
Act on or before the date of this Agreement, or the issue date of the Base Prospectus or the Time of Sale Prospectus, as the case
may be.
“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), and (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Iran
Sanctions” shall have the meaning ascribed to such term in Section 3.1(tt).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreements” shall mean the lock-up agreements, in the form of Exhibit A attached hereto, delivered at the Closing
by each of the Company’s officers and directors holding Common Stock or Common Stock Equivalents and each holder of Common
Stock and Common Stock Equivalents holding, on a fully diluted basis, more than five percent (5%) of the Company issued and outstanding
Common Stock.
“Material
Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets or business (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole or (iii) a material adverse effect on the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction Document.
“Material
Permit” shall have the meaning ascribed to such term in Section 3.1(n).
“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(mm).
“Offering”
shall have the meaning ascribed to such term in Section 2.1(c).
“Permitted
Free Writing Prospectus” shall have the meaning ascribed to such term in Section 4.2(d).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred
Closing Units” shall have the meaning ascribed to such term in Section 2.1(a)(ii).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“Prospectus
Supplement” means, if any, any supplement to the Base Prospectus or the Time of Sale Prospectus, as the case may be,
complying with Rule 424(b) of the Securities Act that is filed with the Commission.
“Public
Securities” means, collectively, the securities bundled as the Common Closing Units and Preferred Closing Units.
“Registration
Statement” means, collectively, the various parts of the registration statement prepared by the Company on Form S-3 (File
No. 333-188579) with respect to the Securities, each as amended as of the date hereof, including the Base Prospectus, Prospectus
Supplement, if any, the Time of Sale Prospectus and all Incorporated Documents.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“Sanctions”
shall have the meaning ascribed to such term in Section 3.1(rr).
“Xxxxxxxx-Xxxxx
Act” shall have the meaning ascribed to such term in Section 3.1(s).
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(i).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Selected
Dealer” shall have the meaning ascribed to such term in Section 6.1.
“Series
D Preferred Stock” means the Series D Convertible Preferred Stock of the Company, $0.001 par value per share, and any
other class of securities into which such securities may hereafter be reclassified or changed.
“Shares”
means, collectively, the shares of Common Stock and Series D Preferred Stock delivered to the Underwriters in accordance with Section
2.1(a)(i) and Section 2.2(a).
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company
formed or acquired after the date hereof.
“Time
of Sale Prospectus” means the preliminary prospectus, if any, together with the Permitted Free Writing Prospectus, if
any, used in connection with the Offering, including any documents incorporated by reference therein.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement and any other documents or agreements executed in connection with the transactions contemplated
hereunder.
“Transfer
Agents” means the current U.S. transfer agent of the Company and any successor transfer agent of the Company.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.20(b).
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the underwriters in accordance with Sections 2.1(a)(i) and
2.1(a)(ii), which Warrants shall be exercisable six months after the Closing Date at $0.535 per share, and have a term of 24 months.
“Warrant
Shares” means the Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
(a) Upon
the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate (i) 3,800,985 common closing
units (each a “Common Closing Unit”), each bundling one share of Common Stock together with .816 of a Warrant,
and (ii) 1,670 preferred closing units (each a “Preferred Closing Unit” and, together with the securities
bundled as Common Closing Units, the “Closing Securities”), each bundling one share of Series D Preferred Stock
together with 1,525.23 Warrants, and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the number
of Closing Securities set forth opposite the name of such Underwriter on Schedule I hereof; and
(b) The
aggregate purchase price for the Closing Securities, which represents the public offering price of Common Closing Unit or Preferred
Closing Unit, as applicable, net of the underwriting discounts and commissions appearing on the cover page of the Prospectus Supplement
(equal to five percent (5%) of the aggregate gross proceeds raised in the Offering) shall equal the amount set forth opposite the
name of each Underwriter on Schedule I hereto (the “Closing Purchase Price”). The public offering price
for one Common Closing Unit shall be $0.535 and the public offering price for one Preferred Closing Unit shall be $1,000.00; and
(c) On
the Closing Date, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer, immediately available
funds equal to such Underwriter’s Closing Purchase Price and the Company shall deliver to, or as directed by, such Underwriter
its respective Closing Securities and the Company shall deliver the other items required pursuant to Section 2.3 deliverable at
the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4, the Closing shall occur at the
offices of EGS or such other location as the Company and Representative shall mutually agree. The Public Securities are to be offered
initially to the public at the offering price set forth on the cover page of the Prospectus Supplement (the “Offering”).
2.2 [reserved]
2.3 Deliveries.
The Company shall deliver or cause to be delivered to each Underwriter (if applicable) the following:
(i) At
the Closing Date, the Closing Securities, of which the Common Stock shall be delivered via The Depository Trust Company Deposit
or Withdrawal at Custodian system for the accounts of the several Underwriters and of which the Series D Preferred Stock and Warrants
shall be delivered in certificated form to the Representative registered as directed by the Representative;
(ii) Contemporaneously
herewith, a legal opinion of Company Counsel addressed to the Underwriters, including, without limitation, a negative assurance
letter, and as to the Closing Date, a bring-down opinion from Company Counsel in form and substance reasonably satisfactory to
the Representative, including, without limitation, a negative assurance letter, addressed to the Underwriters and in form and substance
satisfactory to the Representative;
(iii) Contemporaneously
herewith, a cold comfort letter, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative
from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated as of the Closing
Date;
(iv) Contemporaneously
herewith, and on the Closing Date, the Company shall have furnished to the Representative a certificate of its Chief Executive
Officer and its Controller stating that (i) such officers have carefully examined the Registration Statement, the Base Prospectus
and any Prospectus Supplement, and, in their opinion, the Registration Statement and each amendment thereto, as supplemented or
amended by information in the Base Prospectus or Prospectus Supplement, as of the date of this Agreement and as of the Closing
Date did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, as of the Closing Date, the Prospectus Supplement and each amendment
or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has
occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus Supplement,
(iii) to the best of their knowledge after reasonable investigation, as of the Closing Date, the representations and warranties
of the Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing Date, and (iv) there has not been, subsequent to
the date of the most recent reviewed financial statements included in the Company’s Form 10-Q filed on May 14, 2013, included
or incorporated by reference in the Base Prospectus or Prospectus Supplement, as the case may be, 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 have a Material Adverse Effect on the results of operations, business or assets of the Company, except as set forth in the
Prospectus Supplement;
(v) On
the Closing Date, the duly executed and delivered Secretary’s Certificate, certifying: (i) that each of the Certificate
of Incorporation and Bylaws is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions
of the Company’s Board of Directors relating to the Offering are in full force and effect and have not been modified; (iii)
as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as
to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate;
and
(vi) Contemporaneously
herewith, the duly executed and delivered Lock-Up Agreements.
2.4 Closing
Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing are subject to the following
conditions being met:
(i) the
accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company
already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the
Company contained herein (unless as of a specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been
performed;
(iii) the
delivery by the Company of the items set forth in Section 2.3 of this Agreement;
(iv) the
Registration Statement shall be effective on the date of this Agreement and at the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be
pending or contemplated by the Commission and any request on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of the Representative;
(v) by
the Execution Date, if required by FINRA, the Underwriters shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriters as described in the Registration Statement;
(vi) application
for listing of the Closing Shares, Warrant Shares and Conversion Shares shall have been made on the Trading Market; and
(vii) prior
to and on each of the 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 and Prospectus Supplement; (ii) no action,
suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Affiliate of the Company
before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling
or finding may result in a Materially Adverse Effect in the business, operations, prospects or financial condition of the Company,
except as set forth in the Registration Statement and Prospectus Supplement; (iii) no stop order shall have been issued under
the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration
Statement, the Base Prospectus and the Prospectus Supplement 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 rules and regulations thereunder
and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder,
and neither the Registration Statement nor the Base 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.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules, the Company represents and warrants to the Underwriters as of the Execution Date and as of
the Closing Date, as follows:
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities. If the Company has no Subsidiaries, all other references to the Subsidiaries or
any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Public Securities and the consummation by it of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. As of the date of this Agreement and provided the Closing Shares and the Conversion Shares in the aggregate
do not exceed 20% of the outstanding shares of Common Stock on the Closing Date, except for the filings with NYSE MKT for the listing
of the Closing Shares, the Conversion Shares and the Warrant Shares for trading thereon in the time and manner required thereby,
the issuance and listing on NYSE MKT of the Closing Shares, Conversion Shares and Warrant Shares requires no further approvals,
including but not limited to, the approval of shareholders and the Company is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filing with the Commission of the Prospectus Supplement and (ii) such filings as are required to be made under
applicable state securities laws (collectively, the “Required Approvals”).
(f) Registration
Statement. The Company has filed with the Commission the Registration Statement under the Securities Act, which became effective
on June 14, 2013 (the “Effective Date”), for the registration under the Securities Act of the Public Securities.
At the time of such filing and as of the date of this Agreement, the Company met the requirements of Form S-3 under the Securities
Act. The Registration Statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with
said Rule and the Prospectus Supplement will meet the requirements set forth in Rule 424(b). The Company has advised the Representative
of all further information (financial and other) with respect to the Company required to be set forth in the Registration Statement
and Prospectus Supplement. Any reference in this Agreement to the Registration Statement, the Base Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form
S-3 which were filed under the Exchange Act, on or before the date of this Agreement, or the issue date of the Base Prospectus
or Prospectus Supplement, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue
date of the Base Prospectus or Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All references
in this Agreement to financial statements and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration Statement,
the Base Prospectus or Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration
Statement, the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the effectiveness of
the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement has been issued, and no proceeding for
any such purpose is pending or has been initiated or, to the Company's knowledge, is threatened by the Commission. For purposes
of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act
and the “Time of Sale Prospectus” means the preliminary prospectus, if any, together with the free writing prospectuses,
if any, used in connection with the Offering, including any documents incorporated by reference therein. The Company will not,
without the prior consent of the Representative, prepare, use or refer to, any free writing prospectus.
(g) Issuance
of Public Securities. The Public Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company. The Warrant Shares and Conversion Shares, when issued in accordance with the terms of the Series D Preferred Stock or
Warrants, as applicable, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.
The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant
to this Agreement. The holder of the Public Securities will not be subject to personal liability by reason of being such holders.
The Public 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. All corporate action required to be taken for the authorization, issuance and
sale of the Public Securities has been duly and validly taken. The Public Securities conforms in all material respects to all statements
with respect thereto contained in the Registration Statement.
(h) Capitalization.
The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set
forth in the SEC Reports and as set forth in the Disclosure Schedules and as a result of the purchase and sale of the Closing Securities,
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. Except as set
forth in the Disclosure Schedules, the issuance and sale of the Closing Securities will not obligate the Company to issue shares
of Common Stock or other securities to any Person (other than the Underwriters) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. The authorized shares of the Company conform in all material respects
to all statements relating thereto contained in the Registration Statement, the Base Prospectus and the Prospectus Supplement.
The offers and sales of the Company’s securities were at all relevant times either registered under the Securities Act and
the applicable state securities or Blue Sky laws or, based in part on the representations and warranties of the purchasers, exempt
from such registration requirements. No further approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Public Securities. There are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.
(i) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Base Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and
documents described in the Registration Statement, the Base Prospectus, the Prospectus Supplement and the SEC Reports conform to
the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the
rules and regulations thereunder to be described in the Registration Statement, the Base Prospectus, the Prospectus Supplement
or the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described
or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it
is or may be bound or affected and (i) that is referred to in the Registration Statement, the Base Prospectus, the Prospectus
Supplement or the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and validly executed
by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification
or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought. None of such agreements or instruments has been assigned by the
Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and,
to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both,
would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material
provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets
or businesses, including, without limitation, those relating to environmental laws and regulations.
(j) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the
Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option
plans and (vi) no officer or director of the Company has resigned from any position with the Company. The Company does not have
pending before the Commission any request for confidential treatment of information. Except for the issuance of the Public Securities
contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is
reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects,
properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that has not been publicly disclosed at least one Trading Day prior
to the date that this representation is made. Unless otherwise disclosed in an SEC Report filed prior to the date hereof, the Company
has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared
or paid any dividend or made any other distribution on or in respect to its capital stock.
(k) Litigation.
Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local
or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Public Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the Company or any current director or officer of the Company. The
Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the Securities Act.
(l) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(m) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (each,
a “Material Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material Permit. To the Company’s knowledge, all such Material Permits are free
and clear of any restriction or condition that are in addition to, or materially different from those normally applicable to similar
licenses, certificates, authorizations and permits. Neither the Company nor any Subsidiary has received notification
of any revocation or modification (or proceedings related thereto) of any such Material Permit except as could not reasonably be
expected to have a Material Adverse Effect and, to the Company’s knowledge, there is no reasonable basis to believe that
any such Material Permit will not be renewed. The disclosures in the Registration Statement concerning the effects of Federal,
State, local and all foreign regulation on the Company’s business as currently contemplated are correct in all material respects.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights
to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with
GAAP, and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and
the Subsidiaries are in compliance.
(p) Intellectual
Property. (i) As used herein, “Intellectual Property Rights” means the following rights of the Company and each
Subsidiary: (1) patent registrations and applications in any and all jurisdictions, including but not limited to: re-issues, continuations,
continuations-in-part, renewals, re-examinations, extensions or divisions; (2) registered, pending and common law trademarks including
but not limited to: service marks, trade dress, trade names, logos, corporate names and domain names in any and all jurisdictions,
together with all of the goodwill associated therewith; (3) registered, pending or unregistered copyrights in websites, writings,
graphic works, designs or other copyrightable works in any and all jurisdictions; (4) software; (5) registered, pending or unregistered
mask works in any and all jurisdictions; (6) trade secrets and other confidential information including, without limitation, ideas,
discoveries, formulas, compositions, inventions (whether patentable or not and whether or not reduced to practice), know-how, methodology,
models, algorithms, systems, manufacturing and production processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, financial and marketing plans and customer and supplier lists and information,
marketing and business data, databases, pricing and cost information; (7) other intellectual property rights including but not
limited to claims or causes of action arising out of or related to past, present or future third-party infringement or misappropriation
of the foregoing; (8) rights under all agreements relating to the foregoing; and (9) copies and tangible embodiments of the foregoing
(in whatever form or medium). (ii) To the Company’s knowledge, the Company and each Subsidiary owns all right, title and
interest in and to, or has the valid and enforceable licenses to use, all Intellectual Property Rights as actually used in and
necessary to carry on their respective businesses as currently conducted and described in the SEC Reports, for which the failure
to so have such rights could reasonably be expected to have a Material Adverse Effect. (iii) Neither the Company, nor any Subsidiary,
has received any written or other notice that any of such Intellectual Property Rights has expired, terminated or been abandoned,
or is expected to expire, terminate or be abandoned, within two (2) years from the date of this Agreement. (iv) Other than as set
forth in the SEC Reports, the Company has not received notice of any claim against or any challenge by any other person to
the legality, validity or enforceability of the Intellectual Property Rights with respect to the foregoing except for those that
could not reasonably be expected to have a Material Adverse Effect. (v) The licenses of Intellectual Property Rights
described in the SEC Reports are valid, binding upon, and enforceable by or against the parties thereto in accordance with
their terms. (vi) Other than as set forth in the SEC Reports, the Company and each Subsidiary has complied in all material
respects with, and is not in breach of, nor has the Company made or received any written or, to the Company’s knowledge,
oral asserted or threatened claim of breach of, any such license of Intellectual Property Rights, and the Company has no knowledge
of any breach or anticipated breach by any other person to any such license. (vii) The Company has not received
notice that the Company’s and any of its Subsidiary’s actions in carrying on its business as now conducted and as proposed
to be conducted will infringe or conflict with any valid patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses or other proprietary right of any person, except for any such actions that could not reasonably be expected to have a
Material Adverse Effect. (vii) Except as described in the SEC Reports, no claim has been made against the Company or any Subsidiary
alleging the infringement by the Company or any Subsidiary of any patent, trademark, service xxxx, trade name, copyright, trade
secret, license or other proprietary right of any person. (viii) The Company and each Subsidiary has taken reasonable
steps to protect, maintain and safeguard all Intellectual Property Rights, including the execution of appropriate nondisclosure
and confidentiality agreements. (ix) To the Company’s knowledge, no employee of the Company or any Subsidiary is, or has
ever been, in violation in any material respect of any term of any employment contract, patent non-disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation agreement, non-disclosure agreement or any restrictive covenant
to or with a former employer where the basis of such violation relates to such employee’s employment with the Company, or
actions undertaken by the employee while employed with the Company, and could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. (x) To the Company’s knowledge, all material proprietary information developed
by and belonging to the Company or any Subsidiary which has not been patented or made the subject matter of patent applications
has been kept confidential. (xi) Neither the Company nor its Subsidiaries are parties to or bound by any options, licenses or agreements
with respect to intellectual property rights of any other person or entity, for which such options, licenses or agreements are
required to be set forth in the SEC Reports and are not described therein. (xii) None of the technology or proprietary information
employed by the Company or any Subsidiary has been obtained or is being used by in violation of any contractual obligation binding
on the Company or any Subsidiary, nor, to the Company’s knowledge, are any of its officers, directors or employees in violation
of the intellectual property or employment contract rights of any person where such violation could reasonably be expected to have
a Material Adverse Effect on the Company or any Subsidiary. (xiii) The Company’s and its Subsidiaries’ collection,
use and dissemination of information in connection with their businesses has been conducted in accordance with all applicable laws
relating to privacy, data security and data protection, and all applicable privacy policies adopted by the Company or any of its
Subsidiaries. No claims have been asserted or, to the Company’s knowledge, threatened, against the Company or any Subsidiary
alleging any violation of any person’s privacy or data rights.
(q) ERISA.
No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income Security Act of 1974,
as amended, including the regulations and published interpretations thereunder (“ERISA”), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)) or
“accumulated funding deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b)
of ERISA (other than events with respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been
waived) has occurred or could reasonably be expected to occur with respect to any employee benefit plan of the Company or
any Subsidiary which could reasonably be expected to have a Material Adverse Effect, singularly or in the aggregate. Each
employee benefit plan of the Company or any Subsidiary is in compliance in all material respects with applicable law, including
ERISA and the Code. The Company and each Subsidiary has not incurred and could not reasonably be expected to incur liability
under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in ERISA). Each
pension plan for which the Company or any Subsidiary would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified, and nothing has occurred, whether by action or by failure to act, which could reasonably be expected
to cause the loss of such qualification to the extent such loss would have a Material Adverse Effect, singularly or in the aggregate.
(r) Environmental
Laws. To the best of the Company’s knowledge, the Company and each Subsidiary is in compliance with all United States
federal, state and local and other applicable rules, laws and regulations relating to the use, treatment, storage and disposal
of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to its
businesses (“Environmental Laws”), except where the failure to comply could not reasonably
be expected to have a Material Adverse Effect, singularly or in the aggregate. There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other
hazardous substances regulated by Environmental Laws (“Hazardous Substances”) by
or caused by the Company or any Subsidiary (or, to the Company’s knowledge and without independent investigation, any other entity
for whose acts or omissions the Company or any Subsidiary is or may otherwise be liable) upon any of the property now
or previously owned or leased by the Company or any Subsidiary, or upon any other property, in violation of any law, statute,
ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including
rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability
which could not reasonably be expected to have a Material Adverse Effect, singularly or in the aggregate; to the Company’s
actual knowledge and without independent investigation, there has been no disposal, discharge, emission or other release onto property
now leased by the Company or any Subsidiary or into the environment surrounding such property of any Hazardous Substance,
except for any such disposal, discharge, emission, or other release in violation of Environmental Laws which could not reasonably
be expected to have a Material Adverse Effect, singularly or in the aggregate.
(s) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a significant increase in cost.
(t) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $100,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.
(u) Xxxxxxxx-Xxxxx;
Internal Accounting Controls. Except as set forth in the SEC reports, the Company and the Subsidiaries are in compliance with
any and all applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002, as amended (“Xxxxxxxx-Xxxxx Act”) that
are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing Date. Except as set forth in the SEC Reports, the
Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect
to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to
ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries
as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined
in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company and its Subsidiaries.
(v) Certain
Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable
by the Company, any Subsidiary or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company’s
knowledge, there are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any
of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA. The Company has not made any
direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee
or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised
or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member, within the twelve months prior to the Execution Date. None of the net proceeds
of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized
herein.
(w) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Closing Securities
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940,
as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(x) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary.
(y) Listing
and Maintenance Requirements. The Shares are registered pursuant to Section 12(b) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Shares
under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Shares are
or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. Except as set forth in the Prospectus Supplement or the SEC Reports, the Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
(z) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable as a result of the Underwriters and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents.
(aa) Disclosure;
10b-5. The Registration Statement (and any further documents to be filed with the Commission incorporated into the Registration
Statement) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective
amendment thereto, if any, at the time it became effective, complied in all material respects with the Securities Act and the Exchange
Act and the applicable rules and regulations under the Securities Act and did not and, as amended or supplemented, if applicable,
will not, contain any 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 in light of the circumstances under which they were made not misleading. The Base Prospectus and
the Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities Act and the Exchange
Act and the applicable rules and regulations promulgated thereunder. Each of the Base Prospectus and the Prospectus Supplement,
as amended or supplemented, did not and will not contain as of the date thereof any 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. The SEC Reports, when they were filed with the Commission, conformed in all material respects to the requirements
of the Exchange Act and the applicable rules and regulations promulgated thereunder, and none of such documents, when they were
filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make
the statements therein (with respect to the SEC Reports incorporated by reference in the Base Prospectus or Prospectus Supplement),
in light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by
reference in the Base Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all
material respects to the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not
contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made not misleading. No post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities
Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described
in the Base Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which have
not been described, incorporated by reference or filed as required. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading.
(bb) No
Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would
cause this offering of the Public Securities to be integrated with prior offerings by the Company for purposes of any applicable
shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(cc) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Closing Securities hereunder, (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports sets forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments.
(dd) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of
all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or
of any Subsidiary know of no basis for any such claim. The provisions for taxes payable, if any, shown on the financial statements
filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and
for all periods to and including the dates of such consolidated financial statements. The term “taxes” mean all federal,
state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns,
declarations, reports, statements, and other documents required to be filed in respect to taxes. The Company and each Subsidiary has
not engaged in any transaction which is a corporate tax shelter or which could be characterized as such by the Internal Revenue
Service or any other taxing authority. The accruals and reserves on the books and records of the Company in respect
of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments and related liabilities
for any such period, and since the date of the most recent audited financial statements included in the SEC Reports, the Company
and each Subsidiary has not incurred any liability for taxes other than in the ordinary course.
(ee) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of FCPA. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient
to cause the Company to comply in all material respects with the FCPA.
(ff) Accountants.
To the knowledge and belief of the Company, the Company Auditor (i) is an independent registered public accounting firm as required
by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ended June 30, 2013. The Company Auditor has not, during the periods covered by the financial
statements included in the Base Prospectus or Prospectus Supplement, provided to the Company any non-audit services, as such term
is used in Section 10A(g) of the Exchange Act.
(gg) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Product”),
such Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with
all applicable requirements under FDCA and similar laws, rules and regulations, except where the failure to be in compliance would
not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge, threatened, action (including
any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the
Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter
or other communication from the FDA or any other governmental entity, which (i) contests the approval of, the uses of, the distribution
of, the manufacturing or packaging of, the sale of, or the labeling and promotion of any Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials
relating to, any Product, (iii) enjoins production at any facility of the Company or any of its Subsidiaries, (iv) enters or proposes
to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (v) otherwise alleges any
violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the
aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are
being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company
has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product
proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing
for marketing any product being developed or proposed to be developed by the Company.
(hh)
[reserved]
(ii) [reserved]
(jj) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department.
(kk) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s
request.
(ll) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%)
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(mm) Money
Laundering. The operations of the Company is and has been conducted at all times in compliance with all applicable financial
recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable money laundering statutes of all jurisdictions
where the Company and its Subsidiaries conduct business, 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 court or Governmental Entity, authority or body or any arbitrator
or non-governmental authority involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending
or, to the best of the Company’s knowledge, threatened. The Company and its Subsidiaries have instituted and maintains policies
and procedures designed to ensure continued compliance with the Money Laundering Laws.
(nn) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the
Company’s directors and officers immediately prior to the Offering as well as in the Lock-Up Agreement provided to the Underwriters
is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed
in such questionnaires become inaccurate and incorrect.
(oo) FINRA
Affiliation. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater shareholder of the Company, except as set forth in the Base Prospectus
or except as previously disclosed to the Underwriters. The Company will advise the Representative and EGS if it learns that
any officer, director or owner of 5% or more of the Company’s outstanding shares of Common Stock or Common Stock Equivalents
is or becomes an affiliate or associated person of a FINRA member firm.
(pp) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to EGS shall be deemed a representation
and warranty by the Company to the Underwriters as to the matters covered thereby.
(qq) Board
of Directors. The Board of Directors is comprised of the persons set forth under the heading of the definitive proxy statement
filed with the SEC on January 8, 2013 captioned “Directors.” The qualifications of the persons serving as board members
and the overall composition of the Board of Directors comply with the Xxxxxxxx-Xxxxx Act and the rules promulgated thereunder applicable
to the Company and the rules of the Trading Market. At least one member of the Board of Directors qualifies as a “financial
expert” as such term is defined under the Xxxxxxxx-Xxxxx Act and the rules promulgated thereunder and the rules of the Trading
Market. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent”
as defined under the rules of the Trading Market.
(rr) No
Sanctions. None of the Company, any of its Subsidiaries, or any director, officer, or employee thereof, nor, to the Company’s
knowledge, any agent, affiliate or representative of the Company, is a Person that is, or is owned or controlled by a Person that
is: (A) the subject of any sanctions administered, imposed or enforced by the U.S. Department of Treasury’s Office of Foreign
Assets Control, the U.S. Government, the United Nations Security Council, the European Union, Her Majesty’s Treasury, the
Office of Export Enforcement of the U.S. Department of Commerce or other relevant sanctions authority (collectively, “Sanctions”),
nor (B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation,
Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria); (ii) the Company will not, directly or indirectly, use the proceeds
of the Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
Person (X) to fund or facilitate any payments, operations, investments, projects, activities or business of or with any Person
or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or (Y) in any other
manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether
as underwriter, advisor, investor or otherwise), and the Company will maintain and implement adequate internal controls and procedures
to monitor and audit transactions that are reasonably designed to detect and prevent any use of the proceeds from the offering
of the Public Securities contemplated hereby that is inconsistent with any of the Company’s representations and obligations
under the foregoing; (iii) the Company has not knowingly engaged in, are not now knowingly engaged in, and will not engage in,
any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is
or was the subject of Sanctions; and (iv) the Company maintains and has implemented adequate internal controls and procedures to
monitor and audit transactions that are reasonably designed to detect and prevent any use of the proceeds from the offering of
the Public Securities contemplated hereby that is inconsistent with any of the Company’s representations and obligations
under clause (ii) of this paragraph or in the Registration Statement, the Base Prospectus and Prospectus Supplement.
(ss) Cuba.
Neither the Company nor any of its Subsidiaries does business with the government of Cuba or with any person or affiliate located
in Cuba within the meaning of Section 517.075, Florida Statutes.
(tt) Iran
Sanctions. None of the Company or their respective Directors or officers or, to the best knowledge of the Company, any agent,
employee, affiliate or other person acting on behalf of the Company has engaged in any activities sanctionable under the Comprehensive
Iran Sanctions, Accountability, and Divestment Act of 2010, the Iran Sanctions Act of 1996, the National Defense Authorization
Act for Fiscal Year 2012, the Iran Threat Reduction and Syria Human Rights Act of 2012 or any Executive Order relating to any of
the foregoing (collectively, and as each may be amended from time to time, the “Iran Sanctions”); and the Company
will not directly or indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds
to any subsidiary, joint venture partner or other person or entity, for the purpose of engaging in any activities sanctionable
under the Iran Sanctions.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Amendments
to Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriters complete
conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof,
and conformed copies of the Registration Statement (without exhibits), the Base Prospectus and the Prospectus Supplement, as amended
or supplemented, in such quantities and at such places as an Underwriter reasonably requests. Neither the Company nor any of its
directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection
with the offering and sale of the Public Securities other than the Base Prospectus, the Prospectus Supplement, the Registration
Statement, and copies of the documents incorporated by reference therein. The Company shall not file any such amendment or supplement
to which the Representative shall reasonably object in writing.
4.2 Federal
Securities Laws.
(a) Compliance.
During the time when the Prospectus Supplement is required to be delivered under the Securities Act, the Company will use its best
efforts to comply with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the
Exchange Act and the rules and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Public Securities in accordance with the provisions hereof and the Prospectus. If at any time when
a Prospectus Supplement relating to the Public Securities is required to be delivered under the Securities Act, any event shall
have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters, the Prospectus Supplement,
as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend the Prospectus Supplement to comply with the Securities Act, the Company will notify
the Underwriters promptly and prepare and file with the Commission, subject to Section 4.1 hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Securities Act.
(b) Filing
of Final Prospectus Supplement. The Company will file the Prospectus Supplement (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule 424.
(c) Exchange
Act Registration. For a period of two years from the Execution Date, the Company will use its best efforts to maintain the
registration of the Common Stock under the Exchange Act. The Company will not deregister the Common Stock under the Exchange Act
without the prior written consent of the Representative.
(d) Free
Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Public
Securities that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the
Securities Act, without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative
is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it will
treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in rule and regulations
under the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act,
including timely Commission filing where required, legending and record keeping.
4.3 Delivery
to the Underwriters of Prospectuses. The Company will deliver to the Underwriters, without charge, from time to time during
the period when the Prospectus Supplement is required to be delivered under the Securities Act or the Exchange Act such number
of copies of each Prospectus Supplement as the Underwriters may reasonably request and, as soon as the Registration Statement or
any amendment or supplement thereto becomes effective, deliver to you two original executed Registration Statements, including
exhibits, and all post-effective amendments thereto and copies of all exhibits filed therewith or incorporated therein by reference
and all original executed consents of certified experts.
4.4 Effectiveness
and Events Requiring Notice to the Underwriters. The Company will use its best efforts to cause the Registration Statement
to remain effective with a current prospectus until nine (9) months from the Execution Date and will notify the Underwriters immediately
and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of
the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose;
(iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the
Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that
purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration
Statement or Prospectus Supplement; (v) of the receipt of any comments or request for any additional information from the
Commission; and (vi) of the happening of any event during the period described in this Section 4.4 that, in the judgment of
the Company, makes any statement of a material fact made in the Registration Statement or the Prospectus Supplement untrue or that
requires the making of any changes in the Registration Statement or the Prospectus Supplement in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission
shall enter a stop order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly
the lifting of such order.
4.5 Review
of Financial Statements. For a period of five (5) years from the Execution Date, the Company, at its expense, shall cause its
regularly engaged independent registered public accountants to review (but not audit) the Company’s financial statements
for each of the first three fiscal quarters prior to the announcement of quarterly financial information.
4.6 Reports
to the Underwriters.
(a) Periodic
Reports, etc. For a period of three years from the Execution Date, the Company will furnish to the Underwriters copies of such
financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of
any class of its securities and also promptly furnish to the Underwriters: (i) a copy of each periodic report the Company shall
be required to file with the Commission; (ii) a copy of each Form 8-K prepared and filed by the Company; (iii) a copy of each registration
statement filed by the Company under the Securities Act; (iv) such additional documents and information with respect to the Company
and the affairs of any future Subsidiaries of the Company as the Representative may from time to time reasonably request; provided
that the Underwriters shall each sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is
reasonably acceptable to the Representative in connection with such Underwriter’s receipt of such information. Documents
filed with the Commission pursuant to its XXXXX system shall be deemed to have been delivered to the Underwriters pursuant to this
Section.
(b) Transfer
Sheets. For a period of three (3) years from the Execution Date, the Company shall retain the Transfer Agent or a transfer
and registrar agent acceptable to the Representative and will furnish to the Underwriters at the Company’s sole cost and
expense such transfer sheets of the Company’s securities as an Underwriter may reasonably request, including the daily and
monthly consolidated transfer sheets of the Transfer Agent and the DTC.
(c) Trading
Reports. During such time as the Closing Shares, the Warrant Shares and Conversion Shares are listed on the Trading Market,
the Company shall provide to the Underwriters, at the Company’s expense, such reports published by the Trading Market relating
to price and trading of such shares, as the Underwriters shall reasonably request.
(d) General
Expenses Related to the Offering. The Company hereby agrees to pay on 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 FINRA Public Offering
Filing System fees associated with the review of the Offering by FINRA; all fees and expenses relating to the listing of such Closing
Shares, Warrant Shares and Conversion Shares on the Trading Market and such other stock exchanges as the Company and the Representative
together determine; (c) all fees, expenses and disbursements relating to the registration or qualification of such Public Securities
under the “blue sky” securities laws of such states and other foreign jurisdictions as the Representative may reasonably
designate (including, without limitation, all filing and registration fees, but excluding the fees and expenses of Blue Sky counsel;
(d) the costs of all mailing and printing of prospectuses to prospective investors; (e) the costs and expenses of the public relations
firm; (f) the costs of preparing, printing and delivering certificates representing the Public Securities; (g) fees and expenses
of the Transfer Agent for the Public Securities (including, without limitation, any fees required for same-day processing of any
instruction letter delivered by the Company); (h) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities
from the Company to the Underwriters; (i) the costs associated with commemorative mementos and lucite tombstones, each of which
the Company or its designee will provide within a reasonable time after the Closing in such quantities as the Underwriters may
reasonably request; (j) the fees and expenses of the Company’s accountants; (k) the fees and expenses of the Company’s
legal counsel and other agents and representatives; and (l) the costs associated with advertising the Offering in the national
editions of the Wall Street Journal and New York Times after the Closing Date. To the extent the Company has not previously paid
such expenses, the Underwriters may also deduct from the net proceeds of the Offering payable to the Company on the Closing Date,
the expenses set forth herein to be paid by the Company to the Underwriters.
(e) Expenses
of the Representative. The Company hereby agrees to pay on the Closing Date to the Representative its actual and accountable
out of pocket expenses related to the transactions contemplated herein, including the fees and disbursements of EGS, up to an aggregate
maximum of $60,000 (provided, however, that such expense
cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).
4.7 Application
of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application
described under the caption “Use of Proceeds” in the Prospectus Supplement.
4.8 [reserved]
4.9 Stabilization.
Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative)
has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Public Securities.
4.10 [reserved]
4.11 Accountants.
The Company shall continue to retain an independent certified public accounting firm registered with the Public Company Accounting
Oversight Board for a period of at least three years after the Execution Date. The Underwriters acknowledge that the Company Auditor
is acceptable to the Underwriters.
4.12 FINRA.
The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater
shareholder of the Company becomes an affiliate or associated person of a FINRA member firm.
4.13 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates
or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company
or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding
anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the
success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the
Company by the Underwriters for the shares and the Underwriters have no obligation to disclose, or account to the Company for,
any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any
claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty.
4.14 [reserved]
4.15 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board
members and the overall composition of the Board of Directors comply with the Xxxxxxxx-Xxxxx Act and the rules promulgated thereunder
and with the listing requirements of the Trading Market and (ii) if applicable, at least one member of the Board of Directors
qualifies as a “financial expert” as such term is defined under the Xxxxxxxx-Xxxxx Act and the rules promulgated thereunder.
4.16 Securities
Laws Disclosure; Publicity. At the request of the Representative, by 9:00 a.m. (New York City time) on the date hereof, the
Company shall issue a press release disclosing the material terms of the Offering. The Company and the Representative shall consult
with each other in issuing any other press releases with respect to the Offering, and neither the Company nor any Underwriter shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of
the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. The
Company will 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. (New York City time) on the first business day following the 40th day following the Closing Date,
other than normal and customary releases issued in the ordinary course of the Company’s business.
4.17 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Underwriter of the Public Securities is an “Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Underwriter of Public Securities could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Public Securities.
4.18 Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue the Warrant Shares and Conversion Shares.
4.19 Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on
the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the Closing Shares, Warrant Shares and Conversion Shares on such Trading Market and promptly secure the listing of all of
the Closing Shares, Warrant Shares and Conversion Shares on such Trading Market. The Company further agrees, if the Company applies
to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Closing Shares,
Warrant Shares and Conversion Shares, and will take such other action as is necessary to cause all of the Closing Shares, Warrant
Shares and Conversion Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then
take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.
4.20 Subsequent
Equity Sales.
(a) From
the Execution Date until the date that is ninety (90) days thereafter, neither the Company nor any Subsidiary shall issue, enter
into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock Equivalents.
(b) From
the Execution Date until the date that is ninety (90) days thereafter, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means
a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the Common
Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock
or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities
at a future determined price. Any Underwriter shall be entitled to obtain injunctive relief against the Company to preclude any
such issuance, which remedy shall be in addition to any right to collect damages.
(c) Notwithstanding
the foregoing, this Section 4.20 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.
4.21 Research
Independence. In addition, the Company acknowledges that each Underwriter’s research analysts
and research departments, if any, are required to be independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and that such Underwriter’s research analysts may hold and make statements
or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from
the views of its investment bankers. The Company hereby waives and releases, to the fullest extent permitted by law, any claims
that the Company may have against such Underwriter with respect to any conflict of interest that may arise from the fact that the
views expressed by their independent research analysts and research departments may be different from or inconsistent with the
views or advice communicated to the Company by such Underwriter’s investment banking divisions. The Company acknowledges
that the Representative is a full service securities firm and as such from time to time, subject to applicable securities laws,
may effect transactions for its own account or the account of its customers and hold long or short position in debt or equity securities
of the Company.
ARTICLE V.
DEFAULT BY UNDERWRITERS
5.1 Default
by Underwriters. If on the Closing Date, any Underwriter shall fail to purchase and pay for the portion of the Closing Securities,
which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of
the Company), the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, shall
use their reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase
from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing Securities, which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours the Representative shall not have procured such other Underwriters,
or any others, to purchase the Closing Securities, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a)
if the aggregate number of Closing Securities, with respect to which such default shall occur does not exceed 10% of the Closing
Securities covered hereby, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Closing
Securities, which they are obligated to purchase hereunder, to purchase the Closing Securities, which such defaulting Underwriter
or Underwriters failed to purchase, or (b) if the aggregate number of Closing Securities, with respect to which such default shall
occur exceeds 10% of the Closing Securities, covered hereby, the Company or the Representative will have the right to terminate
this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided
in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the applicable
Closing Date may be postponed for such period, not exceeding seven days, as the Representative, or if the Representative is the
defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus Supplement
or in any other documents or arrangements may be effected. The term “Underwriter” includes any person substituted for
a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
ARTICLE VI.
INDEMNIFICATION
6.1 Indemnification
of the Underwriters. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriters,
and each dealer selected by each Underwriter that participates in the offer and sale of the Public Securities (each a “Selected
Dealer”) and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter
or any Selected Dealer (“Controlling Person”) within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to
any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, whether arising out of any action between such Underwriter and the Company or between such
Underwriter and any third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange
Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in (i) any Preliminary Prospectus, if any, the Registration
Statement or the Base Prospectus (as from time to time each may be amended and supplemented including the Prospectus Supplement
and any Time of Sale Prospectus); (ii) any materials or information provided to investors by, or with the approval of, the Company
in connection with the marketing of the offering of the Public Securities, including any “road show” or investor presentations
made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication
(in this Article VI, collectively called “application”) executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Public Securities under the securities laws thereof or filed
with the Commission, any state securities commission or agency, Trading Market or any securities exchange; or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in 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 written information furnished to the Company with respect to the applicable Underwriter by or on behalf of such
Underwriter expressly for use in any Preliminary Prospectus, if any, the Registration Statement or Base Prospectus, or any amendment
or supplement thereto including the Prospectus Supplement and any Time of Sale Prospectus, or in any application, as the case may
be. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus,
if any, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of an Underwriter to the extent that
any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus Supplement
(as amended or supplemented) was not given or sent to the Person asserting any such loss, liability, claim or damage at or prior
to the written confirmation of sale of the Public Securities to such Person as required by the Securities Act and the rules and
regulations thereunder, and if the untrue statement or omission has been corrected in the Prospectus Supplement (as amended or
supplemented), unless such failure to deliver the Prospectus Supplement (as amended or supplemented) was a result of non-compliance
by the Company with its obligations under this Agreement. The Company agrees promptly to notify each Underwriter of the commencement
of any litigation or proceedings against the Company or any of its officers, directors or Controlling Persons in connection with
the issue and sale of the Public Securities or in connection with the Registration Statement or Prospectus Supplement (as amended
or supplemented).
6.2 Procedure.
If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be
sought against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may
be, shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of
such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter or such Selected
Dealer, as the case may be) and payment of actual expenses. Such Underwriter, such Selected Dealer or Controlling Person shall
have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the
Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company
shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available
to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected
by such Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding
anything to the contrary contained herein, if any Underwriter, Selected Dealer or Controlling Person shall assume the defense of
such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval
shall not be unreasonably withheld.
6.3 Indemnification
of the Company. Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its directors,
officers and employees and agents who control the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the
Company to such Underwriter, as incurred, but only with respect to (i) untrue statements or omissions, or alleged untrue statements
or omissions made in any Preliminary Prospectus, if any, the Registration Statement or Prospectus Supplement or any amendment or
supplement thereto or in any application, in reliance upon, and in strict conformity with, written information furnished to the
Company with respect to such Underwriter by or on behalf of such Underwriter expressly for use in such Preliminary Prospectus,
if any, the Registration Statement or Prospectus Supplement or any amendment or supplement thereto or in any such application,
and (ii) failure by such Underwriter to provide a copy of the Prospectus Supplement (as amended or supplemented) as required by
the Securities Act and the rules and regulations thereunder. In case any action shall be brought against the Company or any other
Person so indemnified based on any Preliminary Prospectus, if any, the Registration Statement or Prospectus Supplement or any amendment
or supplement thereto or any application, and in respect of which indemnity may be sought against such Underwriter, such Underwriter
shall have the rights and duties given to the Company, and the Company and each other Person so indemnified shall have the rights
and duties given to such Underwriter by the provisions of this Article VI. Notwithstanding the provisions
of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting discounts
and commissions applicable to the Public Securities purchased by such Underwriter. The Underwriters'
obligations in this Section 6.3 to indemnify the Company are several in proportion to their respective underwriting obligations
and not joint.
6.4 Contribution.
(a) Contribution
Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person
entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article
VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may
be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then,
and in each such case, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter,
as incurred, in such proportions that such Underwriter is responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus Supplement bears to the initial offering price appearing thereon and the
Company is responsible for the balance; provided, that, no Person guilty of a fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each director, officer and employee of such Underwriter or the Company, as applicable,
and each Person, if any, who controls such Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding
the provisions of this Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts
and commissions applicable to the Public Securities purchased by such Underwriter. The
Underwriters' obligations in this Section 6.4 to contribute are several in proportion to their respective underwriting obligations
and not joint.
(b) Contribution
Procedure. Within fifteen days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to
so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representative of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall
not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such
party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this
Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the
Exchange Act or otherwise available.
ARTICLE VII.
MISCELLANEOUS
7.1 Termination.
(a) Termination
Right. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if
any domestic or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market shall have been
suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction,
or (iii) if the United States shall have become involved in a new war or an increase in major hostilities, or (iv) if
a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign exchange
trading has been declared which materially adversely impacts the United States securities markets, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious
act which, whether or not such loss shall have been insured, will, in the Representative’s opinion, make it inadvisable to
proceed with the delivery of the Public 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.
(b) Expenses.
In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions
thereof pursuant to the terms herein, the Company shall be obligated to pay to the Representative its actual and accountable out
of pocket expenses related to the transactions contemplated herein then due and payable, including the fees and disbursements of
EGS, up to $60,000 (provided, however, that such expense
cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).
(c) Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such
election or termination or failure to carry out the terms of this Agreement or any part hereof.
7.2 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, and the Prospectus Supplement, contain
the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules.
7.3 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 6:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages attached hereto.
7.4 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
7.5 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
7.6 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns.
7.7 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action,
suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either
party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Article VI, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.
7.8 Survival.
The representations and warranties contained herein shall survive the Closing, and the delivery of the Public Securities.
7.9 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
7.10 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
7.11 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents
and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy
at law would be adequate.
7.12 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
7.13 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date
of this Agreement.
7.14 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO
THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY
RIGHT TO TRIAL BY JURY.
(Signature Pages Follow)
If the foregoing correctly
sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in accordance
with its terms.
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Very truly yours, |
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ISORAY, INC. |
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By: |
/s/ Xxxxxx Xxxxxxx |
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Name: Xxxxxx Xxxxxxx |
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Title: CEO |
Address for Notice:
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Copy to:
Xxxxxx Xxxxxxxx P.L.C.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxxxx, Esq.
Accepted on the date first above written.
Maxim Group LLC
As the Representative of the several
Underwriters listed on Schedule I
By: MAXIM GROUP LLC
By: |
/s/ Xxxxxxxx X. Xxxxxx |
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Name: Xxxxxxxx X. Xxxxxx |
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Title: Head of Investment Banking |
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Address for Notice:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Copy to:
Ellenoff Xxxxxxxx &
Schole LLP
000 Xxxx 00xx
Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx,
Esq.
SCHEDULE I
Schedule
of Underwriters
Underwriter | |
Closing Securities | |
Closing Purchase Price |
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Maxim Group LLC | |
3,800,985 Common Units | |
$0.50825 each, $1,931,850.62 total |
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1,670 Preferred Units | |
$950.00 each, $1,586,500.00 total |
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Total Purchase Price: | |
$3,518,350.62 |
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
August 28, 2013
Maxim Group LLC
As Representative of the several Underwriters
named on Schedule I to the Underwriting Agreement
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands
that Maxim Group LLC (the “Representative”) proposes to enter into an Underwriting Agreement (the “Underwriting
Agreement”) with IsoRay, Inc., a Minnesota corporation (the “Company”), providing for the public offering
(the “Offering”) of common stock, $0.001 par value per share (the “Shares”).
To induce the Representative
to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent
of the Representative, the undersigned will not, during the period commencing on the date of the Underwriting Agreement and ending
ninety (90) days after such date (the “Lock-Up Period”), (1)
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 our
securities or any securities convertible into or exercisable or exchangeable for the Shares owned or acquired on or prior
to the closing date of the Offering (including any Shares acquired after the closing date of the Offering upon the conversion,
exercise or exchange of such securities other than issuances of options to purchase Shares, pursuant to any stock option,
stock bonus, or other stock plan or arrangement described in the prospectus or prospectus supplement, as applicable, forming part
of the Registration Statement) (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 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.
If (i) during the
last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the
Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results
or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up
Period, the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative
waives, in writing, such extension.
The undersigned agrees
that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during
the period from the date hereof to and including the 34th day following the expiration of the initial Lock-Up Period,
the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless
it has received written confirmation from the Company that the Lock-Up Period (as may have been extended pursuant to the previous
paragraph) has expired.
No provision in this
lock-up 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 Shares, as applicable; provided that the undersigned does not transfer
the Shares 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) or a sale or exchange of 100% of the Company’s
outstanding Shares.
The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Offering.
The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors and assigns.
The undersigned understands
that, if the Underwriting Agreement is not executed by [_____], 2013, or if the Underwriting
Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and
delivery of the Securities then this lock-up agreement shall be void and of no further force or effect.
Whether or not the
Offering actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.
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Very truly yours, |
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(Name - Please Print) |
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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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Address: |
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