UNDERWRITING
AGREEMENT
between
INTELLICHECK
MOBILISA, INC.
and
JOSEPH
GUNNAR & CO., LLC
as
Representative of the Several Underwriters
INTELLICHECK
MOBILISA, INC.
UNDERWRITING
AGREEMENT
New
York, New York
June 15, 2016
Joseph
Gunnar & Co., LLC
As
Representative of the several Underwriters named on Schedule 1 attached hereto
30 Broad Street, 11th Floor
New
York, NY 10004
Ladies
and Gentlemen:
The
undersigned, Intellicheck Mobilisa, Inc., a corporation formed under the laws of the State of Delaware (the “Company”),
hereby confirms its agreement (this “Agreement”) with Joseph Gunnar & Co., LLC. (hereinafter referred to
as “you” (including its correlatives) or the “Representative”) and with the other underwriters
named on Schedule 1 hereto for which the Representative is acting as representative (the Representative and such other
underwriters being collectively called the “Underwriters” or, individually, an “Underwriter”)
as follows:
1.
Purchase and Sale of Securities.
1.1 Firm
Securities.
1.1.1. Nature
and Purchase of Firm Securities.
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an aggregate of 1,200,000 shares (the “Firm Shares”)
of the Company’s common stock, par value $0.001 per share (the “Common Stock”) together with Common Stock
purchase warrants to purchase up to an aggregate of 600,000 shares of Common Stock (each a “Firm Warrant” and
collectively the “Firm Warrants” and together with the Firm Shares, the “Firm Securities”). Each
Firm Warrant shall be exercisable for a period of five (5) years at an exercise price of $2.20 (the “Firm Warrant Exercise
Price”), subject to adjustment as provided in the agreement evidencing the Firm Warrant.
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares and the Firm Warrants set
forth opposite their respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $1.6275
per Firm Security (93 % of the per Firm Security offering price). The Firm Securities are to be offered initially to the public
at the offering price set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2. Firm
Securities Payment and Delivery.
(i) Delivery
and payment for the Firm Securities shall be made at 10:00 a.m., Eastern time, on June 20, 2016 or at such earlier time as shall
be agreed upon by the Representative and the Company, at the offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd
Floor, New York, NY 10006 (“Representative Counsel”), or at such other place (or remotely by facsimile
or other electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery
and payment for the Firm Securities is called the “Closing Date.”
(ii) Payment
for the Firm Securities shall be made on the Closing Date by wire transfer in federal (same day) funds, payable to the order of
the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares
and the Firm Warrants (or through the facilities of the Depository Trust Company (“DTC”)) for the account of
the Underwriters. The Firm Securities shall be registered in such name or names and in such authorized denominations as the Representative
may request in writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell
or deliver the Firm Securities except upon tender of payment by the Representative for all of the Firm Securities. The term “Business
Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized
or obligated by law to close in New York, New York.
1.2 Over-allotment
Option.
1.2.1. Option
Securities. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Securities,
the Company hereby grants to the Underwriters an option to purchase up to (i) 180,000 additional shares of Common Stock (the “Option
Shares”) at a purchase price of $1.6274 per one Option Share and/or (ii) up to 90,000 additional warrants (the “Option
Warrants” and collectively with the Option Shares, the “Option Securities”) at a purchase price of $0.0001 per
Option Warrant , (the “Warrant Purchase Price”), which may be purchased in any combination of Option Shares and/or
Option Warrants. The Firm Securities, and the Option Securities are collectively referred to herein as the “Public Securities.”
The offering and sale of the Public Securities is hereinafter referred to as the “Offering.”
1.2.2. Exercise
of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Option Securities within 45 days after the Effective Date. The Underwriters
shall not be under any obligation to purchase any Option Securities prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed
in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares and/or Option
Warrants to be purchased and the date and time for delivery of and payment for the Option Securities (the “Option Closing
Date”), which shall not be later than five (5) full Business Days after the date of the notice or such other time as
shall be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place
(including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative.
If such delivery and payment for the Option Securities does not occur on the Closing Date, the Option Closing Date will be as
set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Securities,
subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number
of Option Shares and/or Option Warrants specified in such notice and (ii) each of the Underwriters, acting severally and not jointly,
shall purchase that portion of the total number of Option Shares and/or Option Warrants then being purchased as set forth in Schedule
1 opposite the name of such Underwriter.
1.2.3. Payment
and Delivery. Payment for the Option Securities shall be made on the Option Closing Date by wire transfer in federal (same
day) funds, payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters)
representing the Option Securities (or through the facilities of DTC) for the account of the Underwriters. The Option Securities
shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at
least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option
Securities except upon tender of payment by the Representative for applicable Option Securities. The Option Closing Date may be
simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date are simultaneous with the
Closing Date, the term “Closing Date” shall refer to the time and date of delivery of the Firm Securities and Option
Securities.
1.3 Reserved.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined
below), as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1 Filing
of Registration Statement.
2.1.1. Pursuant
to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a “shelf” registration statement, and an amendment or amendments thereto, on Form S-3 (File No. 333-189982), which
registration statement was declared effective on August 6, 2013, for the registration of the sale of certain securities of the
Company, including the Public Securities, under the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations of the Commission promulgated thereunder (the “Securities Act Regulations”).
Such registration statement, including the exhibits thereto, as amended at the date of this Agreement, is hereinafter called the
“Registration Statement”. If the Company files a registration statement with the Commission pursuant to Rule
462(b) of the Securities Act Regulations relating to the Public Securities, then, after such filing, any reference herein to the
Registration Statement shall also be deemed to include such registration statement filed pursuant to Rule 462(b).
After
execution and delivery of this Agreement, the Company will prepare and file with the Commission a prospectus supplement to the
base prospectus included in the Registration Statement (the “Base Prospectus”) in accordance with the provisions
of Rule 430B (“Rule 430B”) and Rule 424(b) (“Rule 424(b)”) of the Securities Act Regulations;
any information included in such prospectus supplement that was omitted from the Registration Statement at the time it became
effective but that is deemed to be part of and included in the Registration Statement pursuant to Rule 430B is herein called the
“Rule 430B Information”; the Base Prospectus, together with any prospectus supplement used in connection with
the offering of the Public Securities that omitted Rule 430B Information, is hereinafter collectively called a “Preliminary
Prospectus.” The Preliminary Prospectus, subject to completion, dated June 14, 2016, as amended and supplemented immediately
prior to the Applicable Time, is hereinafter called the “Pricing Prospectus.” The Base Prospectus, together
with the final prospectus supplement which includes the Rule 430B Information, in the form first furnished to the Underwriters
for use in connection with the offering and confirmation of the sales of the Public Securities, is hereinafter collectively called
the “Prospectus.”
Any
reference in this Agreement to the Registration Statement, the Base Prospectus, a Preliminary Prospectus, the Pricing Prospectus
or the Prospectus shall be deemed to refer to and include the documents incorporated or deemed incorporated by reference therein
(the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder
(the “Exchange Act Regulations”), on or before the date of this Agreement, or the issue date of the
Base Prospectus, the Preliminary Prospectus, the Pricing Prospectus or the Prospectus, 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, a Preliminary Prospectus, the Pricing Prospectus or the Prospectus 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, the Preliminary Prospectus, the Pricing Prospectus or the Prospectus, as the case may be, deemed to be incorporated
therein by reference. All references in this Agreement to financial statements and schedules and any other information which is
“contained, “included,” “described,” “referenced,” “set forth” or “stated”
in the Registration Statement, the Base Prospectus, a Preliminary Prospectus, the Pricing Prospectus or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such financial statements and schedules and any other
information which is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus, a Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, as the case may be.
“Applicable
Time” means 5:30 p.m., Eastern time, on the date of this Agreement.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined
in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the Commission
by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether
or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i)
because it contains a description of the Public Securities or of the Offering that does not reflect the final terms, in each case
in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution
to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433), as evidenced
by its being specified in Schedule 2-B hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free
Writing Prospectus.
“Pricing
Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time,
the Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant
to the Exchange Act. The shares of Common Stock are registered pursuant to Section 12(b) or 12(g) under the Exchange Act.
The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the shares of Common
Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating either
such registration.
2.1.3. S-3
Eligibility. The Company and the transactions contemplated by this Agreement meet the requirements for, and comply with the
conditions for the use of, Form S-3 under the Securities Act, including but not limited to Instruction I.B.6 of Form S-3. The
Company is not a shell company (as defined in Rule 405 of the Securities Act Regulations) and has not been a shell company for
at least 12 calendar months previously and if it has been a shell company at any time previously, has filed current Form 10 information
(as defined in Instruction I.B.6 of Form S-3) with the Commission at least 12 calendar months previously reflecting its status
as an entity that is not a shell company.
2.2 Stock
Exchange Listing. The shares of Common are listed on The NYSE MKT LLC (the “Exchange”), and the Company
has taken no action designed to, or likely to have the effect of, delisting the shares of Common Stock from the Exchange, nor
has the Company received any notification that the Exchange is contemplating terminating such listing except as described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus. The Company has filed a Supplemental Listing Application
with the Exchange to list the Public Securities and the Representative’s Securities
2.3 No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued
any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has
instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company
has complied with each request (if any) from the Commission for additional information.
2.4 Disclosures
in Registration Statement.
2.4.1. Compliance
with Securities Act and 10b-5 Representation.
(i) Each
of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including
the Base Prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement
thereto, and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements
of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in
connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits
or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(iii) The
Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does
not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use
Free Writing Prospectus hereto does not conflict with the information contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented
by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or
statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters
by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment
thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter
consists solely of the following disclosure contained in the “Underwriting” section of the Prospectus: (i) the concession
information in the fifth paragraph, (ii) the information under the heading “Discretionary Accounts”; (iii) the second
sentence under the heading “Electronic Offer, Sale and Distribution of Shares”; (iv) the first sentence under the
heading “Stabilization”; and (v) the first sentence under the heading “Passive Market Making” (the “Underwriters’
Information”).
(iv) Neither
the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of
any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes
or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to the Underwriters’ Information.
(v) The
documents incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, when they
became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and none
of such documents contained any untrue statement of a material fact or omitted to state any 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;
and any further documents so filed and incorporated by reference in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and will not 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 the light of the circumstances under which they
were made, not misleading.
2.4.2. Disclosure
of Agreements. The agreements and documents described or incorporated by reference in the Registration Statement, the Pricing
Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained or incorporated by
reference therein, and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations
to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission
as exhibits to the Registration Statement or to be incorporated by reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, that have not been so described or filed or incorporated by reference. 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 or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full
force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other
parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision
may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor,
to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has
occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of
the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or
court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each, a “Governmental
Entity”), including, without limitation, those relating to environmental laws and regulations, except for any such violation
that would not have or reasonably be expected to result in a Material Adverse Change (as such term is defined below).
2.4.3. Prior
Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
2.4.4. Regulations.
The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal,
state, local and all foreign regulation on the Offering and the Company’s business as currently contemplated are correct
in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus which are not so disclosed.
2.5 Changes
After Dates in Registration Statement.
2.5.1. No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse
change in the financial position or results of operations of the Company, nor any change or development that, singularly or in
the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets or prospects of the Company (a “Material Adverse Change”);
(ii) there have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement;
and (iii) no officer or director of the Company has resigned from any position with the Company.
2.5.2. Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities
or incurred any liability or obligation, direct or contingent, for borrowed money, ; or (ii) declared or paid any dividend or
made any other distribution on or in respect to its capital stock.
2.6 Disclosures
in Commission Filings. Since January 1, 2013, (i) none of the Company’s filings with the Commission contained any untrue
statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and (ii) the Company has made all filings with the Commission
required under the Exchange Act and the Exchange Act Regulations.
2.7 Independent
Accountants. To the knowledge of the Company, EisnerAmper LLC (the “Auditor”), whose report is filed with
the Commission and included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the
Prospectus is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations
and the Public Company Accounting Oversight Board. The Auditor has not during the periods covered by the financial statements
included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided
to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
2.8 Financial
Statements, etc. The financial statements, including the notes thereto and supporting schedules included or incorporated by
reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present the financial position
and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements
have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), consistently
applied throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments
that are not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules
included in the Registration Statement present fairly the information required to be stated therein. Except as included therein,
no historical or pro forma financial statements are required to be included or incorporated by reference in the Registration Statement,
the Pricing Disclosure Package or the Prospectus under the Securities Act, the Securities Act Regulations, the Exchange Act or
the Exchange Act Regulations. The pro forma and pro forma as adjusted financial information and the related notes, if any, included
or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly
compiled and prepared in accordance with the applicable requirements of the Securities Act, the Securities Act Regulations, the
Exchange Act and the Exchange Act Regulations and present fairly the information shown therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances
referred to therein. All disclosures contained in the Registration Statement, the Pricing Disclosure Package or
the Prospectus, or incorporated or deemed incorporated by reference therein, regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act
and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including
contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a
material current or future effect on the Company’s financial condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of its direct and
indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively, the “Subsidiaries”),
has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than
in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind
with respect to its capital stock, (c) there has not been any change in the capital stock of the Company or any of its Subsidiaries,
or, other than in the ordinary course of business, any grants under any stock compensation plan, and (d) there has not been any
material adverse change in the Company’s long-term or short-term debt.
2.9 Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing
Date the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement,
the Pricing Disclosure Package and the Prospectus, as of the Applicable Time and on the Closing Date and any Option Closing Date,
there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued shares
of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the Company, or any contracts
or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.
2.10 Valid
Issuance of Securities, etc.
2.10.1. Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted
by the Company. The authorized shares of Common Stock conform in all material respects to all statements relating thereto contained
in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding shares
of Common Stock were at all relevant times either registered under the Securities Act and the applicable state securities or “blue
sky” laws or, based in part on the representations and warranties of the purchasers of such shares of Common Stock, exempt
from such registration requirements.
2.10.2. Securities
Sold Pursuant to this Agreement. The Public Securities have been duly authorized for issuance and sale and, when issued and
paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders; the Public Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted by the Company and all corporate action required
to be taken for the authorization, issuance and sale of the Public Securities has been duly and validly taken. The Public Securities
conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. No approval of the stockholders of the Company under the rules and regulations of the Commission or
any other applicable law is required for the Company to issue and deliver the Public Securities to the Underwriters.
2.11 Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the
Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include
any such securities in a registration statement to be filed by the Company.
2.12 Validity
and Binding Effect of Agreements. This Agreement has been duly and validly authorized by the Company, and, when executed and
delivered, will constitute, the valid and binding agreement of the Company, enforceable against the Company in accordance with
their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision
may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.
2.13 No
Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, and all ancillary documents, the
consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms
hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a material
breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the creation,
modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant
to the terms of any agreement or instrument to which the Company is a party; (ii) result in any violation of the provisions of
the Company’s Certificate of Incorporation (as the same may be amended or restated from time to time, the “Charter”)
or the by-laws of the Company; or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any
Governmental Entity as of the date hereof.
2.14 No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition
of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company
is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company
is not (i) in violation of any term or provision of its Charter or by-laws, or (ii) except as would not reasonably be expected
to result in a Material Adverse Change, in violation of any franchise, license, permit, applicable law, rule, regulation, judgment
or decree of any Governmental Entity.
2.15 Corporate
Power; Licenses; Consents.
2.15.1. Conduct
of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business
purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except where the failure
to have any such authorization, approval, order, license, certificate or permit would not have or reasonably be expected to result
in a Material Adverse Change.
2.15.2. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained.
No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid
issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated by this
Agreement and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect
to applicable federal and state securities laws and the rules and regulations of the Exchange and the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
2.16 D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
as supplemented by all information concerning the Company’s directors, officers and principal stockholders as described
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined
in Section 2.25 below), provided to the Underwriters, is true and correct in all material respects and the Company has not become
aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and
incorrect.
2.17 Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus or in connection with the Company’s listing application for the listing of the Common Stock on
the Exchange.
2.18 Good
Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under the laws
of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to
qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.19 Insurance.
The Company carries or is entitled to the benefits of insurance, with reputable insurers in such amounts and covering such risks
which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe
that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change.
2.20 Transactions
Affecting Disclosure to FINRA.
2.20.1. Finder’s
Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims,
payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee
by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements
or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.20.2. Payments
Within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct
or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the date of this Agreement,
other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.20.3. Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.20.4. FINRA
Affiliation. Neither the Company nor any of its affiliates (within the meaning of FINRA’s Conduct Rule 5121(f)(1)) directly
or indirectly controls, is controlled by, or is under common control with, or is an associated person (within the meaning of Article
I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.
2.20.5. Information.
All information provided by the Company in its FINRA Questionnaire to Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete
in all material respects.
2.21 Foreign
Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries,
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate
for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company
(or assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty
in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse
Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company.
The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company
to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.
2.22 Compliance
with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or
lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity,
for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.23 Money
Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with
respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
2.24 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.25 Lock-Up
Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers and directors (collectively,
the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties to deliver to the Representative
an executed Lock-Up Agreement, in the form attached hereto as Exhibit B (the “Lock-Up Agreement”),
prior to the execution of this Agreement.
2.26 Subsidiaries.
All direct or indirect subsidiaries of the Company, including each entity disclosed or described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each a “Subsidiary”
and, collectively the “Subsidiaries”), are duly organized and in good standing under the laws of the place
of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease
of property or the conduct of business requires such qualification, except where the failure to qualify would not have a material
adverse effect on the assets, business or operations of the Company taken as a whole. The Company’s ownership and control
of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.27 Related
Party Transactions. No relationship, direct or indirect, exists between or among the Company on the one hand and the directors,
officers, stockholders, customers or suppliers of the Company on the other hand which is required to be described in Registration
Statement, the Pricing Disclosure Package and the Prospectus which has not been so described therein. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness
by the Company to or for the benefit of any of the officers or directors of the Company or any member of their respective immediate
families, except as disclosed in Registration Statement, the Pricing Disclosure Package and the Prospectus. The Company has not,
in violation of the Sarbanes Oxley Act, directly or indirectly, extended or maintained credit, arranged for the extension of credit,
or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.
2.28
Board of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the
Pricing Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members
and the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of
2002 and the rules promulgated thereunder (the “Sarbanes-Oxley Act”) applicable to the Company and the listing
rules of the Exchange. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit
committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition,
at least a majority of the persons serving on the Board of Directors qualify as “independent,” as defined under the
listing rules of the Exchange.
2.29 Sarbanes-Oxley
Compliance.
2.29.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that comply with Rule 13a-15
or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information
concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure documents.
2.29.2. Compliance.
The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions
of the Sarbanes-Oxley Act.
2.30 Accounting
Controls. The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as
defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act
and have been designed by, or under the supervision of, their respective principal executive and principal financial officers,
or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls.
The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant
deficiencies and material weaknesses, if any, in the design or operation of internal controls over financial reporting which are
known to the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’
ability to record, process, summarize and report financial information; and (ii) any fraud, if any, known to the Company’s
management, whether or not material, that involves management or other employees who have a significant role in the Company’s
internal controls over financial reporting.
2.31 No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.32 No
Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge
of the Company, , is contemplated or threatened and the Company is not aware of any existing or imminent labor disturbance by,
or dispute with, the employees of any of the Company’s or any of the Subsidiaries’ principal suppliers, manufacturers,
contractors or customers, in each case except as could not reasonably be expected to have a Material Adverse Change.
2.33 Intellectual
Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses,
inventions, trade secrets and similar rights including, without limitation (a) all computer programs and other software,
whether in source code, object code or other form, including (i) software implementations of algorithms, models and methodologies,
including libraries and subroutines, (ii) databases and other compilations and collections of data or information, including all
data and information included therein, (iii) descriptions, flow-charts, architectures, development tools and other materials used
to design or develop any of the foregoing and (iv) all documentation, including development, diagnostic, support, user and training
documentation, related to any of the foregoing and (b) all systems, procedures, methods, technologies, algorithms, designs, data,
unpatentable discoveries and inventions and any other information meeting the definition of a trade secret under the Uniform Trade
Secrets Act or similar laws (collectively “Intellectual Property Rights”) necessary for the conduct of the
business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus. To the knowledge of the Company, no action or use by the Company or its Subsidiaries necessary
for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus will
involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither
the Company nor its Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual
Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material
Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of
any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights,
and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in
the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change;
(C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights
licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part,
and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.33, reasonably
be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property
Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate,
together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; and (E) to
the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect of any term
of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation
relates to such employee’s employment with the Company, or actions undertaken by the employee while employed with the Company
and would reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s
knowledge, all material technical information developed by and belonging to the Company which has not been patented has been kept
confidential. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property
Rights of any other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package
and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus
contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology
employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on
the Company or, to the Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of the
rights of any persons. The Company and its subsidiaries have taken reasonable steps necessary
to secure interests in the Intellectual Property developed by their employees, consultants, agents and contractors in the course
of their service to the Company, including the execution of valid assignment and non-disclosure agreements for the benefit of
the Company or its subsidiaries by such employees, consultants, agents and contractors under which they have assigned,
to the Company or its Subsidiaries, all of their right, title and interest in and to any Intellectual Property Rights developed
by them in the course of their service to the Company and used in or related to the business of the Company or any of its Subsidiaries,
subject to applicable law.
2.34 Taxes.
Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries
has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or
assessed against the Company or such Subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed
with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for
all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters,
(i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes
asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns
or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term “taxes”
mean all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together
with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns”
means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
2.35 ERISA
Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material
respects with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”) of which the Company is a member. No “reportable event”
(as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or
maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have
any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates
has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification.
2.36 Compliance
with Laws. The Company: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable
to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion,
sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company (“Applicable
Laws”), except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change;
(B) has not received any warning letter, untitled letter or other correspondence or notice from any Governmental Authority alleging
or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits
and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (C) possesses
all material Authorizations and such Authorizations are valid and in full force and effect and the Company is not in material
violation of any term of any such Authorizations, in each case except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Change; (D) has not received written notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any Governmental Authority or third party alleging that any product
operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental
Authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E)
has not received written notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend,
modify or revoke any Authorizations, except as would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Change and has no knowledge that any such Governmental Authority is considering such action; (F) has filed, obtained,
maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements
or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were, to the knowledge of the Company, complete and correct on the
date filed (or were corrected or supplemented by a subsequent submission); and (G) has not, either voluntarily or involuntarily,
initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement,
safety alert, post-sale warning, or other notice or action relating to the alleged lack of safety or efficacy of any product or
any alleged product defect or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends
to initiate any such notice or action.
2.37 Environmental
Laws. The Company and its Subsidiaries are in compliance with all foreign, federal, state and local rules, laws and regulations
relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety
or the environment which are applicable to their businesses (“Environmental Laws”), except where the failure
to comply would not, singularly or in the aggregate, result in a Material Adverse Change. There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other
hazardous substances by, due to, or caused by the Company or its Subsidiaries (or, to the Company’s knowledge, any other
entity for whose acts or omissions the Company or its Subsidiaries is or may otherwise be liable) upon any of the property now
or previously owned or leased by the Company or its Subsidiaries, or upon any other property, in violation of any law, statute,
ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including
rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability
which would not have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Change; and
there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding
such property of any toxic or other wastes or other hazardous substances with respect to which the Company has knowledge, except
for any such disposal, discharge, emission, or other release of any kind which would not have, singularly or in the aggregate
with all such discharges and other releases, a Material Adverse Change. The Company and its Subsidiaries reasonably believe that
the costs and liabilities associated with the effect of Environmental Laws on their business and assets, would not have, singularly
or in the aggregate, a Material Adverse Change.
2.38 Real
Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
and its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items
of real or personal property which are material to the business of the Company and its Subsidiaries taken as a whole, in each
case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by
the Company or its Subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary
has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company
or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company
or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.
2.39 Contracts
Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of
its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s or its Subsidiaries’ liquidity or the availability of or requirements for their capital resources
required to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus
which have not been described or incorporated by reference as required.
2.40 Loans
to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees or indebtedness by the Company or its Subsidiaries to or for the benefit of any of the officers
or directors of the Company, its Subsidiaries or any of their respective family members, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus.
2.41 Smaller
Reporting Company. As of the time of filing of the Registration Statement and as of the filing of the Company’s most
recent Annual Report on Form 10-K, the Company was a “smaller reporting company,” as defined in Rule 12b-2 of the
Exchange Act.
2.42 Industry
Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and
accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.43 Margin
Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause
any of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X
of the Federal Reserve Board.
2.44 Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed by
the Company without a reasonable basis or has been disclosed by the Company other than in good faith.
2.45 Exchange
Act Reports. The Company has filed in a timely manner all reports required to be filed pursuant to Sections 13(a), 13(e),
14 and 15(d) of the Exchange Act during the preceding 12 months (except to the extent that Section 15(d) requires reports to be
filed pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall be governed by the next clause of this sentence);
and the Company has filed in a timely manner all reports required to be filed pursuant to Sections 13(d) and 13(g) of the Exchange
Act since January 1, 2010, except where the failure to timely file could not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.
2.46 Minute
Books. The minute books of the Company have been made available to the Underwriters and counsel for the Underwriters, and
such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee)
and stockholders of the Company (or analogous governing bodies and interest holders, as applicable), and its Subsidiaries since
the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately
in all material respects reflect all transactions referred to in such minutes. There are no material transactions, agreements,
dispositions or other actions of the Company that are not properly approved and/or accurately and fairly recorded in the minute
books of the Company, as applicable.
3.
Covenants of the Company. The Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to
the Registration Statement or Prospectus proposed to be filed after the date of this Agreement and not file any such amendment
or supplement to which the Representative shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430B, and will notify the Representative promptly,
and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective
or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt of any comments from the Commission;
(iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus,
including any document incorporated or deemed to be incorporated by reference therein, or for additional information; (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective
amendment or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension
of the qualification of the Public Securities for offering or sale in any jurisdiction, or of the initiation or to the Company’s
knowledge threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the
Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section
8A of the Securities Act in connection with the Offering of the Public Securities. The Company shall effect all filings required
under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without
reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company shall use its reasonable best efforts to prevent the issuance of any stop order, prevention
or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2. Continued
Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange
Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement
and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating
to the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule
172”), would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any
event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters
or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure
Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or
the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations,
the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus
comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative
with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided
that the Company shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters
shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as
the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange
Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice
of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full
or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with copies of
the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use
any such document to which the Representative or counsel for the Underwriters shall reasonably object.
3.2.3. Exchange
Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its reasonable best
efforts to maintain the registration of the shares of Common Stock under the Exchange Act.
3.2.4. Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall
not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission
or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer
General Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning
of Rule 433(d)(8)(i) that has been reviewed by the Representative. The Company represents that it has treated or agrees that it
will treat each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free
writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of
Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at
any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement
or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the
Company will promptly notify the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally
filed and each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also
deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and each amendment
thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each
Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by
Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
3.5 Review
of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense, shall
cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial
statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.6 Listing.
The Company shall use its commercially reasonable efforts to maintain the listing of the shares of Common Stock (including the
Public Securities) on the Exchange for at least three years from the date of this Agreement.
3.7 Financial
Public Relations Firm. As of the Closing Date, the Company shall have retained a financial public relations firm reasonably
acceptable to the Representative and the Company, which shall initially be Dian Griesel, Inc. , which firm shall be experienced
in assisting issuers in public offerings of securities and in their relations with their security holders, and shall retain such
firm or another firm reasonably acceptable to the Representative for a period of not less than two (2) years after the date of
this Agreement.
3.8 Reports
to the Representative.
3.8.1. Periodic
Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish to the Representative
copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally
to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report
the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy
of every press release and every news item and article with respect to the Company or its affairs which was released by the Company
and filed or furnished on a Current Report on Form 8-K; (iii) a copy of each Current Report on Form 8-K prepared and filed by
the Company; (iv) five copies of each registration statement filed by the Company under the Securities Act; and (v) such additional
documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative
may from time to time reasonably request; provided the Representative shall sign, if requested by the Company, a Regulation FD
compliant confidentiality agreement which is reasonably acceptable to the Representative and Representative Counsel in connection
with the Representative’s receipt of such information. Documents filed with the Commission pursuant to its EDGAR system
shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1.
3.8.2. Transfer
Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer
agent and registrar acceptable to the Representative (the “Transfer Agent”) and shall furnish to the Representative
at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative may
reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Continental Stock
Transfer and Trust, Inc. is acceptable to the Representative to act as Transfer Agent for the shares of Common Stock.
3.8.3. Trading
Reports. During such time as the Public Securities are listed on the Exchange, the Company shall provide to
the Representative, at the Company’s expense, such reports published by Exchange relating to price trading of the Public
Securities, as the Representative shall reasonably request.
3.9 Payment
of Expenses
3.9.1. General
Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date,
if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company
under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration
of the shares of Common Stock to be sold in the Offering (including the Option Shares) with the Commission; (b) all Public Filing
System filing fees associated with the review of the Offering by FINRA; (c) all actual fees and expenses relating to the listing
of such Public Securities on the NYSE MKT LLC, and such other stock exchanges as the Company and the Representative together determine;
(d) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors in an amount
not to exceed $15,000 in the aggregate; (e) all actual fees, expenses and disbursements relating to the registration or qualification
of the Public Securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative
may reasonably designate ; (f) all actual fees, expenses and disbursements relating to the registration, qualification or exemption
of the Public Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate;
(g) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement,
any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’
Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto
and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (h) the costs and expenses
of a public relations firm; (i) the costs of preparing, printing and delivering certificates representing the Public Securities;
(j) fees and expenses of the transfer agent for the shares of Common Stock; (k) stock transfer and/or stamp taxes, if any, payable
upon the transfer of securities from the Company to the Underwriters; (l) the costs associated with one set of bound volumes of
the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee
shall provide within a reasonable time after the Closing Date in such quantities as the Representative may reasonably request
and which expense shall not exceed $2,000 in total; (m) the fees and expenses of the Company’s accountants; (n) the fees
and expenses of the Company’s legal counsel and other agents and representatives; (o) the fees and expenses of the Underwriter’s
legal counsel, not to exceed $50,000; (p) the $16,500 cost associated with the Underwriter’s use of Ipreo’s book-building,
prospectus tracking and compliance software for the Offering; and (q) up to $5,000 of the Representative’s actual accountable
“road show” expenses for the Offering. The Representative may deduct from the net proceeds of the Offering payable
to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company
to the Underwriters, less the Advance (as such term is defined in Section 8.3 hereof), provided, however, that in the event that
the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.
3.10 Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
3.11 Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth (15th) full calendar month following the date of this
Agreement, an earnings statement (which need not be certified by independent registered public accounting firm unless required
by the Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a)
of the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.12 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent of the Representative)
has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Public Securities.
3.13 Internal
Controls. The Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
3.14 Accountants.
As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable
to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting
firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor
is acceptable to the Representative.
3.15 FINRA.
The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i)
any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company’s securities
or (iii) any beneficial owner of the Company’s unregistered equity securities which were acquired during the 180 days immediately
preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating
in the Offering (as determined in accordance with the rules and regulations of FINRA).
3.16 No
Fiduciary Relationship. The Company hereby acknowledges that the Underwriters are acting solely as underwriters in connection
with the offering contemplated hereby. The Company further acknowledge that the Underwriters are acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length basis and in no event do the parties intend
that the Underwriters act or be responsible as a fiduciary to the Company, its management, shareholders, creditors or any other
person in connection with any activity that the Underwriters may undertake or have undertaken in furtherance of the offering contemplated
hereby, either before or after the date hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations
to the Company, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that effect. The Company hereby further confirms its understanding
that no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto, including any negotiation related to the pricing of the Public Securities; and the Company
has consulted its own legal and financial advisors to the extent it has deemed appropriate in connection with this Agreement and
the offering contemplated hereby. The Company and the Underwriters agree that they are each responsible for making their own independent
judgments with respect to any such transactions, and that any opinions or views expressed by the Underwriters to the Company regarding
such transactions, including but not limited to any opinions or views with respect to the price or market for the Company’s
securities, do not constitute advice or recommendations to the Company. 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 any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions.
3.17 Company
Lock-Up Agreements.
3.17.1. Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, for a period of 90 days after the date of this Agreement (the “Lock-Up
Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of
any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company; or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i),
(ii) or (iii) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or
otherwise.
The
restrictions contained in this Section 3.18.1 shall not apply to (i) the shares of Common Stock to be sold hereunder, (ii) the
issuance by the Company of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security
outstanding on the date hereof, of which the Representative has been advised in writing, or (iii) the issuance by the Company
of stock options or shares of capital stock of the Company under any equity compensation plan of the Company.
Notwithstanding
the foregoing, if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or
a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period
beginning on the last day of the Lock-Up Period, the restrictions imposed by this Section 3.18.1 shall continue to apply until
the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news
or material event, as applicable, unless the Representative waives, in writing, such extension.
3.17.2. Restriction
on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and
any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 12 months
after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction,
offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.
3.18 Release
of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set
forth in the Lock-Up Agreements described in Section 2.26 hereof for an officer or director of the Company and provide the Company
with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver,
the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C
hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.19 Blue
Sky Qualifications. The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify
the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete
the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so
subject.
3.20 Reporting
Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations.
Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under
Rule 463 under the Securities Act Regulations.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as
provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the
date hereof and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers
of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and
(iv) the following conditions:
4.1 Regulatory
Matters.
4.1.1. Effectiveness
of Registration Statement; Rule 430B Information. The Registration Statement has been declared effective by the Commission
under the Securities Act and, at each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus has been issued and no proceedings for any of those purposes
have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied
with each request (if any) from the Commission for additional information. The Prospectus containing the Rule 430B Information
shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) (without reliance on
Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective by,
the Commission in accordance with the requirements of Rule 430B.
4.1.2. FINRA
Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the
amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange
Stock Market Clearance. On the Closing Date, the Company’s shares of Common Stock, including the Firm Shares, shall
have been approved for listing on the Exchange, subject only to official notice of issuance. On the first Option Closing Date
(if any), the Company’s shares of Common Stock, including the Option Shares, shall have been approved for listing on the
Exchange, subject only to official notice of issuance.
4.2 Company
Counsel Matters.
4.2.1. Closing
Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion of K&L Gates
LLP, counsel to the Company, dated the Closing Date and addressed to the Representative, substantially in form and substance reasonably
satisfactory to the Representative.
4.2.2. Opinion
of Special Intellectual Property Counsel for the Company. On the Closing Date, the Representative shall have received the
opinion of Perkins Coie LLP, special intellectual property counsel for the Company, dated the Closing Date, addressed to the Representative
substantially in form and substance reasonably satisfactory to the Representative.
4.2.3. Option
Closing Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable
opinion of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and
in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements
made by such counsels in their respective opinions delivered on the Closing Date.
4.2.4. Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative)
of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact,
to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Representative Counsel if requested. The opinion of K&L
Gates LLP and any opinion relied upon by K&L Gates LLP shall include a statement to the effect that it may be relied upon
by Representative Counsel in its opinion delivered to the Underwriters.
4.3 Comfort
Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter containing statements
and information of the type customarily included in accountants’ comfort letters with respect to the financial statements
and certain financial information contained or incorporated or deemed incorporated by reference in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all
respects to you and to the Auditor, dated as of the date of this Agreement.
4.3.2. Bring-down
Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from
the Auditor, a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor
reaffirms the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall
be a date not more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.
4.4 Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing
Date (if such date is other than the Closing Date), of its Chairman of the Board, its Chief Executive Officer, its President and
its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure
Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment
thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing
Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time
and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus
as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus
and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue
statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances in which they were made, not misleading, (ii) since the Applicable Time, no event has occurred which
should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus,
(iii) to their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other
than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct and the Company
has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iv) there has not been, subsequent
to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package,
any material adverse change in the financial position or results of operations of the Company, or any change or development that,
singularly or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting
the condition (financial or otherwise), results of operations, business, assets or prospects of the Company, except as set forth
in the Prospectus.
4.4.2. Secretary’s
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively,
certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full force
and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and
effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its
counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate
shall be attached to such certificate.
4.5 No
Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been
no material adverse change or development involving a prospective Material Adverse Change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the
Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity,
shall have been pending or threatened against the Company or any Insider before or by any court or federal or state commission,
board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business,
operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings
therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Pricing Disclosure
Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required
to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material
respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement,
the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.6 Delivery
of Agreements.
4.6.1. Lock-Up
Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.6.2. Reserved.
4.7 Additional
Documents. At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with
such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the
Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public
Securities as herein contemplated shall be satisfactory in form and substance to the Representative and Representative Counsel.
5.
Indemnification.
5.1 Indemnification
of the Underwriters.
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates
and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates,
counsel and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each an “Underwriter
Indemnified Party”), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited
to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and
the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them
may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the
laws of foreign countries (a “Claim”), (i), arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in (A) the Registration Statement, the Pricing Disclosure Package, any Preliminary Prospectus, the
Prospectus or in any Issuer Free Writing Prospectus (as from time to time each may be amended and supplemented); (B) any
materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the
Offering, including any “road show” or investor presentations made to investors by the Company (whether in person
or electronically); or (C) any application or other document or written communication (in this Section 5, collectively called
“application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction
in order to qualify the Public Securities under the securities laws thereof or filed with the Commission, any state securities
commission or agency, the Exchange or any other national securities exchange; or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the
Underwriters’ Information. or (ii) otherwise arising in connection with or allegedly in connection with the Offering. The
Company also agrees that it will reimburse each Underwriter Indemnified Party for all fees and expenses (including but not limited
to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and
the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) (collectively, the “Expenses”),
and further agrees wherever and whenever possible to advance payment of Expenses as they are incurred by an Underwriter Indemnified
Party in investigating, preparing, pursuing or defending any Claim.
5.1.2. Procedure.
If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject
to the reasonable approval of such Underwriter Indemnified Party) and payment of actual expenses, if an Underwriter Indemnified
Party requests that the Company do so. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such counsel shall be at the expense of the Company and shall be advanced by the
Company. The Company shall not be liable for any settlement of any action, effected without its consent (which shall not be unreasonably
withheld). In addition, the Company shall not, without the prior written consent of the Underwriters, settle, compromise
or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which
advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Underwriter Indemnified
Party is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of
each Underwriter Indemnified Party, acceptable to such Underwriter Indemnified Party, from all liabilities, expenses and claims
arising out of such action for which indemnification or contribution may be sought and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of any Underwriter Indemnified Party.
5.2 Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the
foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissionsmade
in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement
thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information. In case any
action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration
Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect
of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company,
and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the
provisions of Section 5.1.2. The Company agrees promptly to notify the Representative of the commencement of any litigation or
proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Public
Securities or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus.
5.3 Contribution.
5.3.1. Contribution
Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, from the Offering of the Public Securities, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect
to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters,
on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering
of the Public Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the
table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Common Stock purchased under this Agreement, as set forth in the table on the cover
page of the Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1,
any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute
any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with
respect to the Offering of the Public Securities exceeds the amount of any damages that such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure
to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for
contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing
party or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled
to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party
shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected
by such party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking
contribution without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2
are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act
or otherwise available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3 are several and not joint.
6.
Default by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Securities or Option Securities. If any Underwriter or Underwriters shall default in its or their
obligations to purchase the Firm Securities or the Option Securities, if the Over-allotment Option is exercised hereunder, and
if the number of the Firm Securities or Option Securities with respect to which such default relates does not exceed in the aggregate
10% of the number of Firm Securities or Option Securities that all Underwriters have agreed to purchase hereunder, then such Firm
Securities or Option Securities to which the default relates shall be purchased by the non-defaulting Underwriters in proportion
to their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Securities or Option Securities. In the event that the default addressed in Section 6.1 relates
to more than 10% of the Firm Securities or Option Securities, you may in your discretion arrange for yourself or for another party
or parties to purchase such Firm Securities or Option Securities to which such default relates on the terms contained herein.
If, within one (1) Business Day after such default relating to more than 10% of the Firm Securities or Option Securities, you
do not arrange for the purchase of such Firm Securities or Option Securities, then the Company shall be entitled to a further
period of one (1) Business Day within which to procure another party or parties satisfactory to you to purchase said Firm Securities
or Option Securities on such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Securities
or Option Securities to which a default relates as provided in this Section 6, this Agreement will automatically be terminated
by you or the Company without liability on the part of the Company (except as provided in Sections 3.9 and 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Option
Securities, this Agreement will not terminate as to the Firm Securities; and provided, further, that nothing herein shall relieve
a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its
default hereunder.
6.3 Postponement
of Closing Date. In the event that the Firm Securities or Option Securities to which the default relates are to be purchased
by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall
have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five
(5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing
Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment
to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter
may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such shares of Common
Stock.
7.
Additional Covenants.
7.1 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members
of the Board of Directors and the overall composition of the Board comply with the Sarbanes-Oxley Act, with the Exchange Act and
with the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company
seeks to have any of its securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable,
at least one member of the Audit Committee of the Board of Directors qualifies as an “audit committee financial expert,”
as such term is defined under Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st)
Business Day following the forty-fifth (45th) day after the Closing Date, other than normal and customary releases
issued in the ordinary course of the Company’s business.
7.3 Right
of First Refusal. Provided that the Firm Shares are sold in accordance with the terms of this Agreement, the Representative
shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of six (6) months
after the date the Offering is completed, to act as sole and exclusive investment banker, sole and exclusive book-runner, sole
and exclusive financial advisor, sole and exclusive underwriter and/or sole and exclusive placement agent at the Representative’s
sole and exclusive discretion for each and every future public and private equity and debt offering, including all equity linked
financings (each, a “Subject Transaction”), during such six month period, of the Company or any
successor to or subsidiary of the Company, on terms and conditions cstomary to the Representaive for such Subject Transaction.
The
Company shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof,
by providing written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative
fails to exercise its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing
of such written notice, then the Representative shall have no further claim or right with respect to the Subject Transaction.
The Representative may elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to
any Subject Transaction; provided that any such election by the Representative shall not adversely affect the Representative’s
Right of First Refusal with respect to any other Subject Transaction during the six (6) month period agreed to above.
8.
Effective Date of this Agreement and Termination Thereof.
8.1 Effective
Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
8.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic
or international event or act or occurrence has materially disrupted, or in the Representative’s opinion will in the immediate
future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange
or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or
any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an
increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or
(v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities
markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage
or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the Representative’s
opinion, make it inadvisable to proceed with the delivery of the Firm Securities or Option Securities; or (vii) if the Company
is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall
have become aware after the date hereof of such a Material Adverse Change in the conditions or prospects of the Company, or such
adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to
proceed with the offering, sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for
the sale of the Public Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein
or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees
and disbursements of Representative Counsel) up to $100,000, inclusive of the $15,000 advance for accountable expenses previously
paid by the Company to the Representative (the “Advance”) and upon demand the Company shall pay the full amount
thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs
the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the
Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).
8.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect
and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any
part hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9.
Miscellaneous.
9.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be
deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If
to the Representative:
Joseph
Gunnar & Co., LLC
30 Broad Street, 11th Floor
New York, New York 10004
Attn: Mr. Eric Lord, Head of Investment Banking/Underwritings
Fax
No.: 212-440-9634
with
a copy (which shall not constitute notice) to:
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32nd Floor
New
York, New York 10006
Attention:
Gregory Sichenzia, Esq.
Fax
No: (212) 930-9725
If
to the Company:
Intellicheck
Mobilisa, Inc.
191
Otto Street
Port
Townsend, WA 98368
Attention:
William Roof, PhD, Chief Executive Officer
Fax
No: (360) 344-3323
with
a copy (which shall not constitute notice) to:
K&L
Gates LLP
925 Fourth Avenue, Suite 2900
Seattle, Washington 98104
Attention:
Christopher H. Cunningham
Fax
No: (206) 370-6040
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof,
and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms
and conditions of that certain engagement letter between the Company and Joseph Gunnar & Co., LLC., dated March 31, 2016 shall
remain in full force and effect.
9.5 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors
and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.6 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and
enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of
New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served
upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall
be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in
any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.
9.7 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission
shall constitute valid and sufficient delivery thereof.
9.8 Waiver,
etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision
hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of
any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in
a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver
of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
[Signature
Page Follows]
If
the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.
| |
Very
truly yours, |
| |
|
|
| |
INTELLICHECK
MOBILISA, INC. |
| |
|
|
| |
By: |
/s/
Bill White |
| |
Name: |
Bill
White |
| |
Title: |
Chief
Financial Officer |
Confirmed
as of the date first written
above mentioned, on behalf of itself and as
Representative of the several Underwriters
named on Schedule 1 hereto:
| JOSEPH
GUNNAR & CO., LLC |
|
| |
|
|
| By: |
/s/
Eric Lord |
|
| Name: |
Eric
Lord |
|
| Title: |
Head
of Investment Banking |
|
[SIGNATURE
PAGE]
INTELLICHECK
MOBILISA, INC.
– UNDERWRITING
AGREEMENT
SCHEDULE
1
| Underwriter | |
Total
Number of
Firm
Shares | | |
Total
Number of
Firm
Warrants | | |
Total
Number
of Option
Shares | | |
Total
Number
of Option
Warrants | |
| Joseph Gunnar & Co., LLC | |
| 1,200,000 | | |
| 600,000 | | |
| 180,000 | | |
| 90,000 | |
| | |
| | | |
| | | |
| | | |
| | |
| TOTAL | |
| 1,200,000 | | |
| 600,000 | | |
| 180,000 | | |
| 90,000 | |
SCHEDULE
2-A
Pricing
Information
Number
of Firm Shares: 1,200,000
Number
of Firm Warrants: 600,000
Number
of Option Shares: 180,000
Number
of Option Warrants: 90,000
Public
Offering Price per Firm Security: $1.75
Purchase
Price per Option Warrant: $0.0001
Purchase
Price per Option Share: $1.6274
Underwriting
Discount per Firm Security: $0.1225
Proceeds
to Company per Firm Security (before expenses): $1.6275
SCHEDULE
2-B
Issuer
General Use Free Writing Prospectuses
[None.]
SCHEDULE
3
List
of Lock-Up Parties
Vice
Admiral Michael D. Malone
Lieutenant
General Emil R. Bedard
Majork
General Jack A. Davis
William
P. Georges
Guy
L. Smith
Dr.
William H. Rood
Bill
White
EXHIBIT
B
Form
of Lock-Up Agreement
[Provided
Separately]
EXHIBIT
C
Form
of Press Release
INTELLICHECK
MOBILISA, INC.
[Date]
Intellicheck
Mobilisa, Inc. (the “Company”) announced today that Joseph Gunnar & Co., LLC, acting as representative for the
underwriters in the Company’s recent public offering of _______ shares of the Company’s common stock and warrants,
is [waiving] [releasing] a lock-up restriction with respect to _________ shares of the Company’s common stock held by [certain
officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on _________, 20___, and
the shares may be sold on or after such date.
This
press release is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or
sale is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from
registration under the Securities Act of 1933, as amended.
