Exhibit 1.1
MODULAR
MEDICAL, INC.
[____] Shares
of Common Stock
[_____]
Warrants
UNDERWRITING
AGREEMENT
[_____],
2022
Oppenheimer & Co. Inc.
as Representative
of the several
Underwriters
named in Schedule I hereto
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Modular
Medical, Inc., a Nevada corporation (the “Company”), proposes, subject to the terms and conditions contained herein,
to sell to you and the other underwriters (the “Underwriters”) named on Schedule I to this Underwriting Agreement
(the “Agreement”), for whom you are acting as Representative (the “Representative”), an aggregate of (i)
[________] shares (the “Shares”) of the Company’s common stock, $0.001 par value per share (the “Common
Stock”) and (ii) warrants, each warrant exercisable for one share of Common Stock at an exercise price of $[_____] per share
with a term of five years (the “Warrants”). The respective amounts of the Shares and Warrants to be purchased by each
of the several Underwriters are set forth opposite their names on Schedule I hereto.
The
shares of Common Stock issuable upon exercise of the Warrants are referred to herein as the “Warrant Shares.” The
Shares, the Warrants and the Warrant Shares are collectively called the “Securities.” The Warrants shall be issued
pursuant to, and shall have the rights and privileges set forth in, a warrant agency agreement, dated on or before the Closing
Date, substantially in the form attached hereto as Exhibit B (the “Warrant Agreement”) between the Company and [_____],
as warrant agent (or any successor, the “Warrant Agent”). The Shares and Warrants will be issued separately but will
be purchased together in this offering.
The
Company has prepared and filed in conformity with the requirements of the Securities Act of 1933, as amended (the “Securities
Act”), and the published rules and regulations thereunder (the “Rules”) adopted by the Securities and Exchange
Commission (the “Commission”), a Registration Statement (as hereinafter defined) on Form S-1 (No. 333-260682), including
a preliminary prospectus, and such amendments thereof as may have been required to the date of this Agreement. Copies of such
Registration Statement (including all amendments thereof) and of the related Preliminary Prospectus (as hereinafter defined) have
heretofore been delivered by the Company or are otherwise available to you. The term “Preliminary Prospectus” means
any preliminary prospectus included at any time as a part of the Registration Statement or filed with the Commission by the Company
pursuant to Rule 424(a) of the Rules. The term “Registration Statement” as used in this Agreement means the initial
registration statement (including all exhibits and financial schedules and all documents and information deemed to be part of
the Registration Statement by incorporation by reference or otherwise), as amended at the time and on the date it becomes effective
(the “Effective Date”), including the information (if any) contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and deemed to be part thereof at the time of effectiveness pursuant to Rule 430A
of the Rules. If the Company has filed an abbreviated registration statement to register additional Securities pursuant to Rule
462(b) under the Rules (the “462(b) Registration Statement”), then any reference herein to the Registration Statement
shall also be deemed to include such 462(b) Registration Statement. The term “Prospectus” as used in this Agreement
means the prospectus in the form included in the Registration Statement at the time of effectiveness or, if Rule 430A of the Rules
is relied on, the term Prospectus shall also include the final prospectus filed with the Commission pursuant to and within the
time limits described in Rule 424(b) of the Rules.
The
Company understands that the Underwriters propose to make a public offering of the Securities, as set forth in and pursuant to
the Statutory Prospectus (as hereinafter defined) and the Prospectus, as soon after the Effective Date and the date of this Agreement
as the Representative deems advisable. The Company hereby confirms that the Underwriters and dealers have been authorized to distribute
or cause to be distributed each Preliminary Prospectus, and, if applicable, each Issuer Free Writing Prospectus (as hereinafter
defined) and are authorized to distribute the Prospectus (as from time to time amended or supplemented if the Company furnishes
amendments or supplements thereto to the Underwriters).
1.
Sale, Purchase, Delivery and Payment for the Securities. On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The
Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, the number of Shares and Warrants set forth opposite the name of such Underwriter under the column
“Number of Shares and Warrants to be Purchased” on Schedule I to this Agreement. The combined purchase price for
one Share and one Warrant to purchase one Warrant Share shall be $ , which shall be allocated as $ per Share and $0.01 per Warrant.
(b) Payment
of the purchase price for, and delivery of certificates for, the Securities shall be made at the offices of Oppenheimer &
Co. Inc., 85 Broad Street, New York, New York 10004, at 10:00 a.m., New York City time, on the second business day following the
date of this Agreement or at such time on such other date, not later than ten (10) business days after the date of this Agreement,
as shall be agreed upon by the Company and the Representative (such time and date of delivery and payment are called the “Closing
Date”).
(c) Payment
for the Securities shall be made to the Company by wire transfer of immediately available funds or by certified or official bank
check or checks payable in New York Clearing House (same day) funds drawn to the order of the Company, against delivery to the
Representative for the respective accounts of the Underwriters of certificates for the Shares and/or Warrants to be purchased
by them.
(d) The
Securities shall be registered in such names and shall be in such denominations as the Representative shall request before the
Closing Date and shall be delivered by or on behalf of the Company to the Representative through the facilities of the Depository
Trust Company (“DTC”) for the account of such Representative.
2.
Representations and Warranties of the Company. The Company represents and warrants to each Underwriter as of the
date hereof and as of the Closing Date, as follows:
(a) On
the Effective Date, the Registration Statement complied, and on the date of the Prospectus, the date any post-effective amendment
to the Registration Statement becomes effective, the date any supplement or amendment to the Prospectus is filed with the Commission,
the Registration Statement and the Prospectus (and any amendment thereof or supplement thereto) will comply, in all material respects,
with the requirements of the Securities Act and the Rules and the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”) and the rules and regulations of the Commission thereunder. Neither the Registration Statement nor any amendments
thereto as of the times they became effective, contained any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein not misleading; and on the Effective Date
and the other dates referred to above neither the Registration Statement nor the Prospectus, nor any amendment or supplement of
either of the foregoing, will contain any untrue statement of a material fact or will omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not misleading. When any Preliminary Prospectus was
first filed with the Commission (whether filed as part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement thereto was first filed with the Commission, such Preliminary
Prospectus as amended or supplemented complied in all material respects with the applicable provisions of the Securities Act and
the Rules and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading. If applicable, each Preliminary Prospectus and the
Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to the Commission’s Electronic Data Gathering, Analysis and Retrieval
system (“EDGAR”), except to the extent permitted by Regulation S-T. Notwithstanding the foregoing, none of the representations
and warranties in this paragraph 2(a) shall apply to statements in, or omissions from, the Registration Statement, any Preliminary
Prospectus or the Prospectus made in reliance upon, and in conformity with, information herein or otherwise furnished in writing
by the Representative on behalf of the several Underwriters specifically for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus, as the case may be. With respect to the preceding sentence, the Company acknowledges that the only
information furnished in writing by the Representative on behalf of the several Underwriters for use in the Registration Statement,
any Preliminary Prospectus or the Prospectus is the statements contained in the _____ and _______ paragraphs under the caption
“Underwriting” in the Prospectus (collectively, the “Underwriter Information”).
(b)
As of the Applicable Time (as hereinafter defined), none of (i) the price to the public and the number of Securities offered
and sold, as indicated on the cover page of the Prospectus and the Statutory Prospectus (as hereinafter defined),
all considered together (collectively, the “General Disclosure Package”), (ii) any individual Issuer Free Writing
Prospectus when considered together with the General Disclosure Package, and (iii) any individual Written Testing-the Waters Communication
(as defined herein), when considered together with the General Disclosure Package, included, includes or will include any untrue
statement of a material fact or omitted, omits or will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to statements in or omissions in the General Disclosure Package
made in reliance upon and in conformity with the Underwriter Information.
Each
Issuer Free Writing Prospectus (as hereinafter defined), including any electronic road show (including without limitation any
“bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act) (each, a “Road Show”)
(i) is identified in Schedule III hereto and (ii) complied when issued, and complies, in all material respects with the requirements
of the Securities Act and the Rules and the Exchange Act and the rules and regulations of the Commission thereunder. The Company
has made at least one version of the Road Show available without restriction by means of graphic communication to any person,
including any potential investor in the Securities (and if there is more than one version of a Road Show for the offering that
is a written communication, the version available without restriction was made available no later than the other versions).
As used in this Section
and elsewhere in this Agreement:
“Applicable
Time” means [ ]:00 [a.m.]/[p.m.] (Eastern time) on the date of this Agreement.
“Statutory
Prospectus” as of any time means the Preliminary Prospectus relating to the Securities that is included in the Registration
Statement immediately prior to the Applicable Time.
“Issuer
Free Writing Prospectus” means each “free writing prospectus” (as defined in Rule 405 of the Rules) prepared
by or on behalf of the Company or used or referred to by the Company in connection with the offering of the Securities, including,
without limitation, each Road Show.
(c)
The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness
of the Registration Statement or suspending or preventing the use of any Preliminary Prospectus, the Prospectus or any “free
writing prospectus”, as defined in Rule 405 under the Rules, has been issued by the Commission and no proceedings for that
purpose have been instituted or are threatened under the Securities Act. Any required filing of any Preliminary Prospectus and/or
the Prospectus and any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and within
the time period required by such Rule 424(b). Any material required to be filed by the Company pursuant to Rule 433(d) or Rule
163(b)(2) of the Rules has been or will be made in the manner and within the time period required by such Rules.
(d) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent times through the completion of the public
offer and sale of the Securities or until any earlier date that the Company notified or notifies the Representative as described
in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, the Statutory Prospectus or the Prospectus.
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,
the Statutory Prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted or would
omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances prevailing at the subsequent time, not misleading, the Company has promptly notified or will promptly notify
the Representative and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
(e) The financial statements of the Company (including all notes and schedules thereto) included in the Registration Statement, the
Statutory Prospectus and Prospectus present a true and fair view of the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company
and its consolidated subsidiaries for the periods specified; and such financial statements and related schedules and notes thereto,
and the unaudited financial information filed with the Commission as part of the Registration Statement, have been prepared in
conformity with generally accepted accounting principles, consistently applied throughout the periods involved. The summary and
selected financial data included in the Statutory Prospectus and Prospectus present a true and fair view of the information shown
therein as of the respective dates and for the respective periods specified and have been presented on a basis consistent with
the consolidated financial statements set forth in the Prospectus. The pro forma financial statements and the related notes thereto
included in the Registration Statement, the Statutory Prospectus and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described 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.
(f) Farber Hass Hurley LLP (the “Auditor”), whose reports are filed with the Commission as a part of the Registration
Statement, are and, during the periods covered by their reports, were independent public accountants as required by the Securities
Act and the Rules.
(g) The Company and each of its subsidiaries, including each entity (corporation, partnership, joint venture, association or other
business organization) controlled directly or indirectly by the Company (each, a “subsidiary”), (i) is duly organized,
validly existing and in good standing under the laws of their respective jurisdictions of incorporation or organization and each
such entity has all requisite power and authority to carry on its business as is currently being conducted as described in the
Statutory Prospectus and the Prospectus, and to own, lease and operate its properties and to enter into and perform its obligations
pursuant to the public offer and sale of Securities and this Agreement, and (ii) has duly authorized, executed and delivered this
Agreement and the other agreements to be entered into by it in connection with the public offer and sale of Securities, and each
of them, assuming due authorization, execution and delivery by the other parties hereto or thereto, constitutes legal, valid and
binding obligations enforceable against it in accordance with their respective terms. All of the issued shares of capital stock
of, or other ownership interests in, each subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable
and are owned, directly or indirectly, by the Company, free and clear of any lien, charge, mortgage, pledge, security interest,
claim, limitation on voting rights, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any
kind whatsoever. The Company and each of its subsidiaries is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted by it or location of the assets or properties owned,
leased or licensed by it requires such qualification, except for such jurisdictions where the failure to so qualify individually
or in the aggregate would not have a material adverse effect on the assets, properties, condition, financial or otherwise, or
in the results of operations, business affairs or business prospects of the Company and its subsidiaries considered as a whole
or in the context of the public offer and sale of Securities or underwriting of the Securities (a “Material Adverse Effect”);
and to the Company’s knowledge, no proceeding has been instituted or is threatened in any such jurisdiction revoking, limiting
or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification or taken against it for its winding-up,
liquidation or dissolution or for any similar or analogous proceeding in any jurisdiction, or for it to enter into any arrangement
or composition for the benefit of creditors, or for the appointment of a receiver, administrative receiver, trustee or similar
officer.
(h) (i) At the time of filing the Registration Statement and (ii) on the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 of the Rules, including (but not limited to) the Company or any other subsidiary in
the preceding three (3) years not having been convicted of a felony or misdemeanor or having been made the subject of a judicial
or administrative decree or order as described in Rule 405 of the Rules.
(i) The
Company and each of its subsidiaries (i) owns or possesses legally enforceable rights to use all patents, patent rights, inventions,
trademarks, trademark applications, trade names, service marks, copyrights, copyright applications, licenses, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems, processes or procedures)
and other similar rights and proprietary knowledge (in each case, whether registered or not and including applications for registration)
(collectively, “Intangibles”) necessary for the conduct of its business. Neither the Company nor any of its subsidiaries
has received any notice of, or is not aware of, any infringement of or conflict with asserted rights of others with respect to
any Intangibles and neither the Company nor any of its subsidiaries has knowledge of any infringement of or conflict with asserted
rights of others or of any infringement of, or conflict with the Company and its subsidiaries’ rights with respect to any
Intangibles, (ii) the Company and each of its subsidiaries processes employed and the products and services dealt in by the Company
or any of its subsidiaries do not, to its knowledge, infringe Intangibles of a third party and neither of the Company nor any
of its subsidiaries has received any notice of infringement of or conflict with, and neither of the Company nor any of its subsidiaries
has knowledge of any infringement of or conflict with, asserted rights of a third party with respect to any Intangibles, except
for or in respect of any such infringements or conflicts that would not, individually or in the aggregate, have a Material Adverse
Effect, (iii) except as described in the Statutory Prospectus and the Prospectus, neither the Company nor any of its subsidiaries
is obligated to pay a royalty, grant a license or provide other consideration to any third party in connection with its Intangibles,
and the public offer and sale of Securities will not trigger such payment, except for any such obligations that would not, individually
or in the aggregate, have a Material Adverse Effect.
(j) Except as described in the Statutory Prospectus and the Prospectus, the Company and each of its subsidiaries has good and marketable
title in fee simple to all real property, and good and marketable title to all other property owned by it, in each case free and
clear of all liens, encumbrances, claims, security interests and defects, except such as do not materially affect the value of
such property and do not materially interfere with the use made or proposed to be made of such property by the Company and its
subsidiaries. All property held under lease by the Company and its subsidiaries is held by them under valid, existing and enforceable
leases, free and clear of all liens, encumbrances, claims, security interests and defects, except such as are not material and
do not materially interfere with the use made or proposed to be made of such property by the Company and its subsidiaries.
(k) The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the
date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus, being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and
none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial
statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. The selected financial data set forth under the caption “Selected Financial Data”
in the SEC Reports and “Summary of Financial Data” in the Registration Statement, General Disclosure Package, and
Prospectus fairly present, on the basis stated in such SEC Reports, Registration Statement, General Disclosure Package, and Prospectus,
each as applicable, the information included therein. The agreements and documents described in the Registration Statement, the
Preliminary Prospectus, the General Disclosure Package, the Prospectus, and the SEC Reports conform in all material aspects to
the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the
rules and regulations thereunder to be described in the Registration Statement, the Preliminary Prospectus, the General Disclosure
Package, the Prospectus or the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that
have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company
is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the General
Disclosure Package, the Prospectus or the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized
and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company
and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability
of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the
remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and
to the discretion of the court before which any proceeding therefore may be brought. None of such agreements or instruments has
been assigned by the Company, and neither the Company nor, to the 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 Company’s knowledge, performance by the Company of the material provisions of such
agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to environmental laws and regulations, except in each case, as would
not reasonably be expected to have a Material Adverse Effect.
(l) Subsequent
to the respective dates as of which information is given in the Registration Statement, the Statutory Prospectus and the Prospectus,
(i) there has not been any event which could have a Material Adverse Effect; (ii) neither the Company nor any of its subsidiaries
has sustained any loss or interference with its assets, businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree which would have a Material Adverse Effect; and (iii) except as described in the
Statutory Prospectus and the Prospectus, since the date of the latest balance sheet included in the Registration Statement and
the Prospectus, neither the Company nor its subsidiaries has (A) issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money, except such liabilities or obligations incurred in the ordinary course of business,
(B) entered into any transaction not in the ordinary course of business or (C) declared or paid any dividend or made any distribution
on any shares of its stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any
shares of its capital stock.
(m) There is no document, contract or other agreement required to be described in the Registration Statement, the Statutory
Prospectus or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required
by the Securities Act or Rules. Each description of a contract, document or other agreement in the Registration Statement, the
Statutory Prospectus or the Prospectus accurately reflects in all respects the terms of the underlying contract, document or other
agreement. Each contract, document or other agreement described in the Registration Statement, the Statutory Prospectus or the
Prospectus or listed in the exhibits to the Registration Statement is in full force and effect and is valid and enforceable by
and against the Company or its subsidiary, as the case may be, in accordance with its terms. Neither the Company nor any of its
subsidiaries, if a subsidiary is a party, nor to the Company’s knowledge, any other party, is in default in the observance
or performance of any term or obligation to be performed by it under any such agreement, and no event has occurred which with
notice or lapse of time or both would constitute such a default, in any such case which default or event, individually or in the
aggregate, would have a Material Adverse Effect. No default exists, and no event has occurred which with notice or lapse of time
or both would constitute a default, in the due performance and observance of any term, covenant or condition, by the Company or
its subsidiary, if a subsidiary is a party thereto, of any other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which Company or its properties or business or a subsidiary or its properties or business may be bound or affected
which default or event, individually or in the aggregate, would have a Material Adverse Effect.
(n)
The statistical and market related data included in the Registration Statement, the Statutory Prospectus or the Prospectus
are based on or derived from sources that the Company believes to be reliable and accurate.
(o) Neither
the Company nor any subsidiary (i) is in violation of its certificate or articles of incorporation, bylaws, certificate of formation,
limited liability company agreement, partnership agreement or other organizational documents, (ii) is in default under, and no
event has occurred which, with notice or lapse of time, or both, would constitute a default under, or result in the creation or
imposition of any lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any kind whatsoever, upon, any property or assets of the Company
or any subsidiary pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, or (iii)
is in violation of any statute, law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory
or other legal or governmental agency or body, foreign or domestic.
(p) The Company has full right, power and authority to execute and deliver this Agreement, the Warrants and the Warrant Agreement,
and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization,
execution and delivery by it of this Agreement, the Warrants and the Warrant Agreement, and the consummation by it of the transactions
contemplated hereby and thereby has been duly and validly taken.
(q) This Agreement, the Warrants and the Warrant Agreement have been duly authorized, executed and delivered by the Company and each,
assuming the due authorization, execution and delivery by the other parties hereto, constitutes a valid and legally binding agreement
of the Company, enforceable in accordance with its terms, except as (i) the enforcement hereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles (whether considered in a proceeding at law or in equity) relating to enforceability and (ii)
rights to indemnification and contribution hereunder may be limited by applicable law and public policy considerations.
(r) Neither the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the Company of the Securities) will give rise to
a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of any term
or provision of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under,
or require any consent or waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon any properties
or assets of the Company or its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by which either the Company or its subsidiaries or
any of their properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation
applicable to the Company or any of its subsidiaries or violate any provision of the charter or bylaws or other organizational
documents of the Company or any of its subsidiaries, except for such consents or waivers which have already been obtained and
are in full force and effect.
(s)
The Company has authorized and outstanding capital stock as set forth under the caption “Capitalization” in the Statutory
Prospectus and the Prospectus. All of the issued and outstanding shares of capital stock of the Company have been duly and validly
issued and are fully paid and nonassessable and have been issued in compliance with all federal, state and local. There are no
statutory preemptive or other similar rights to subscribe for or to purchase or acquire any shares of capital stock of the Company
or any of its subsidiaries, or any such rights pursuant to its charter, articles of incorporation or bylaws or any other applicable
organizational documents or any agreement or instrument to or by which the Company or any of its subsidiaries is a party or bound.
The Securities have been duly authorized for issuance and sale pursuant to this Agreement and, in the case of the Warrants, the
Warrant Agreement. When issued and sold pursuant to this Agreement, the Shares will be duly and validly issued, fully paid and
nonassessable and none of them will be issued in violation of any preemptive or other similar right. When paid for and issued
in accordance with the Warrants and the Warrant Agreement, the Warrant Shares will be validly issued, fully paid and non-assessable
and none of them will be issued in violation of any preemptive or other similar right. Except as disclosed in the Registration
Statement, the Statutory Prospectus and the Prospectus, there is no outstanding option, warrant or other right calling for the
issuance of, and there is no commitment, plan or arrangement to issue, any share of capital stock of the Company or any of its
subsidiaries or any security convertible into, or exercisable or exchangeable for, such shares. The exercise price of each option
to acquire Common Stock (each, a “Company Stock Option”) is no less than the fair market value of a share of Common
Stock as determined on the date of grant of such Company Stock Option. All grants of Company Stock Options were validly issued
and properly approved by the Board of Directors of the Company (and, if required, but a committee of the Board of Directors of
the Company and/or the shareholders of the Company) in material compliance with all applicable laws and the terms of the plans
under which such Company Stock Options were issued and were recorded on the Company Financial Statements, in accordance with generally
accepted accounting principles, and no such grants involved any “back dating”, “forward dating,” “spring
loading” or similar practices with respect to the effective date of grant. The Securities conform in all material respects
to all statements in relation thereto contained in the Registration Statement and the Statutory Prospectus and the Prospectus.
(t) As
of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times from its
duly authorized capital stock, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling
the Company to issue Warrant Shares issuable upon exercise of outstanding Warrants.
(u) No
holder of any security of the Company has any right, which has not been waived, to have any security owned by such holder included
in the Registration Statement or to demand registration of any security owned by such holder for a period of one hundred and eighty
(180) days after the date of this Agreement. Each director and executive officer of the Company and each stockholder of the Company
listed on Schedule II hereto has delivered to the Representative his enforceable written lock-up agreement in the form attached
to this Agreement as Exhibit A hereto (“Lock-Up Agreement”).
(v) There
are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries
could individually or in the aggregate have a Material Adverse Effect; and, to the knowledge of the Company, no such proceedings
are threatened or contemplated by governmental authorities or threatened by others.
(w) All
necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance
of this Agreement, the Warrants and the Warrant Agreement and the issuance and sale of the Securities by the Company.
(x) Neither
the Company nor any of its subsidiaries is involved in any labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a Material Adverse Effect. The Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers or contractors which would have a Material Adverse Effect. The Company is not
aware of any threatened or pending litigation between the Company or its subsidiaries and any of its executive officers which,
if adversely determined, could have a Material Adverse Effect and has no reason to believe that such executive officers will not
remain in the employment of the Company.
(y) No
transaction has occurred between or among the Company and any of its officers or directors, shareholders or any affiliate or affiliates
of any such officer or director or shareholder that is required to be described in and is not described in the Registration Statement,
the Statutory Prospectus and the Prospectus.
(z) The
Company has not taken, nor will it take, directly or indirectly, any action designed to, or which might reasonably be expected
to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock or any security of the Company to facilitate the sale or resale of any of the Securities.
(aa) The
Company and each of its subsidiaries has duly paid all national, regional and local taxes of any kind (including but not limited
to, income taxes, capital gain taxes, withholding taxes, sales and transfer taxes, energy and real estate taxes, labor market
and social contribution taxes, customs duties, VAT, registration fees and similar levies, duties, charges, stamps and imposts
of whatever nature as well as any penalty, fine, surcharge or interest relating thereto) which have become due and payable with
regard to the period up to and including the of this Agreement (other than tax deficiencies which the Company or any of its subsidiaries
is contesting in good faith and for which the Company or any of its subsidiaries have provided adequate provisions if required
by generally accepted accounting principles), except for such failures that would not, individually or in the aggregate, have
a Material Adverse Effect. The Company and each of its subsidiaries has filed all federal, state, local and foreign tax returns
which are required to be filed through the date hereof, which returns are true and correct in all material respects or has received
timely extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent that
the same are material and have become due. There are no tax audits or investigations pending, which if adversely determined would
have a Material Adverse Effect; nor are there any material proposed additional tax assessments against the Company or any of its
subsidiaries.
(bb) The
Securities have been duly authorized for quotation on the National Association of Securities Dealers Automated Quotation (“Nasdaq”)
Capital Market System, subject to official Notice of Issuance. A registration statement has been filed on Form 8-A pursuant to
Section 12 of the Exchange Act, which registration statement complies in all material respects with the Exchange Act.
(cc) The
Company has taken no action designed to, or likely to have the effect of, terminating the registration of theSecurities under
the Exchange Act or the quotation of the Common Stock or the Warrants on the Nasdaq Capital Market, nor has the Company received
any notification that the Commission or the Nasdaq Capital Market is contemplating terminating such registration or quotation.
(dd)
The books, records and accounts of the Company and its subsidiaries accurately and fairly reflect the transactions in, and
dispositions of, the assets of, and the results of operations of, the Company and its subsidiaries. The Company and each of its
subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances 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 accordance with generally accepted accounting principles 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.
(ee) The
Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange
Act), which: (i) are designed to ensure that material information relating to the Company is made known to the Company’s
principal executive officer and its principal financial officer by others within the Company, particularly during the periods
in which the periodic reports required under the Exchange Act are required to be prepared; (ii) provide for the periodic evaluation
of the effectiveness of such disclosure controls and procedures at the end of the periods in which the periodic reports are required
to be prepared; and (iii) are effective in all material respects to perform the functions for which they were established.
(ff) Based
on the evaluation of its disclosure controls and procedures, the Company is not aware of (i) any material weakness or significant
deficiency in the design or operation of internal controls which could adversely affect the Company’s ability to record,
process, summarize and report financial data or any material weaknesses in internal controls; or (ii) any fraud, whether or not
material, that involves management or other employees who have a role in the Company’s internal controls.
(gg)
Except as described in the Statutory Prospectus and the Prospectus and as preapproved in accordance with the requirements set
forth in Section 10A of the Exchange Act, the Auditor has not been engaged by the Company to perform any “prohibited activities”
(as defined in Section 10A of the Exchange Act).
(hh) Except
as described in the Statutory Prospectus and the Prospectus, there are no material off-balance sheet arrangements (as defined
in Item 303 of Regulation S-K) that have or are reasonably likely to have a material current or future effect on the Company’s
financial condition, revenues or expenses, changes in financial condition, results of operations, liquidity, capital expenditures
or capital resources.
(ii) The
Company’s Board of Directors has validly appointed an audit committee whose composition satisfies the requirements of Rule
5605 of the Nasdaq Stock Market and the Board of Directors and/or the audit committee has adopted a charter that satisfies the
requirements of Rule 5605 of the Nasdaq Stock Market. The audit committee has reviewed the adequacy of its charter within the
past twelve (12) months.
(jj) The
Company is in compliance with all other applicable provisions of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley
Act”), any related rules and regulations promulgated by the Commission and corporate governance requirements under applicable
Nasdaq regulations upon the effectiveness of such provisions and has no reason to believe that it will not be able to comply with
such provisions at the time of effectiveness. There is and has been no failure on the part of the Company or any of its directors
or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act, including, without limitation,
Section 402 related to loans and Sections 302 and 906 related to certifications.
(kk) The
Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are customary in the businesses in which they are engaged or propose to engage after giving effect to the transactions
described in the Statutory Prospectus and the Prospectus; all policies of insurance and fidelity or surety bonds insuring the
Company or any of its subsidiaries or the Company’s or its subsidiaries’ respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and each of its subsidiaries are in compliance with the terms
of such policies and instruments in all material respects; and neither the Company nor any subsidiary of the Company has any reason
to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that is not materially greater than the
current cost. Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for
which it has applied.
(ll) Each
approval, consent, order, authorization, designation, declaration or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the Company of this Agreement, the Warrants and the
Warrant Agreement and the consummation of the transactions herein and therein contemplated required to be obtained or performed
by the Company has been obtained or performed, except for (i) such additional steps as may be required by the Financial Industry
Regulatory Authority (“FINRA”); (ii) as may be necessary to qualify the Securities for public offering by the Underwriters
under the state securities or Blue Sky laws; and (iii) the approval by the Nasdaq Capital Market for the listing of the Securities.
(mm) There
are no affiliations with FINRA among the Company’s officers, directors or, to the best of the knowledge of the Company,
any five percent or greater stockholder of the Company, except as set forth in the Registration Statement or otherwise disclosed
in writing to the Representative.
(nn) (i)
Each of the Company and each of its subsidiaries is in compliance in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (each such
law, an “Environmental Law”) which are applicable to its business; (ii) neither the Company nor its subsidiaries has
received any notice from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) each of
the Company and each of its subsidiaries has received all permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance with all terms and conditions of any such permit, license or approval;
(iv) to the Company’s knowledge, no facts currently exist that will require the Company or any of its subsidiaries to make
future material capital expenditures to comply with Environmental Laws; and (v) no property which is or has been owned, leased
or occupied by the Company or its subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) (“CERCLA 1980”) or
otherwise designated as a contaminated site under other Environmental Laws. Neither the Company nor any of its subsidiaries has
been named as a “potentially responsible party” under CERCLA 1980.
(oo) In
the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which the Company identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect.
(pp) The
Company is not and, after giving effect to the offering and sale of the Securities and the application of proceeds thereof as
described in the Statutory Prospectus and the Prospectus, will not be an “investment company” within the meaning of
the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(qq) The
Company or any other person associated with or acting on behalf of the Company including, without limitation, any director, officer,
agent or employee of the Company or its subsidiaries, has not, directly or indirectly, while acting on behalf of the Company or
its subsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity; (ii) made any direct or indirect unlawful payment or unlawful benefit to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated or is in
violation of, or engaged in any activity or conduct which would constitute an offense under, any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or any provision of any applicable non-U.S. anti-bribery or anti-corruption law or regulation
(“Anti-Corruption Laws”); or (iv) made any other unlawful payment. Neither the Company nor its subsidiaries will directly
or indirectly use the proceeds of the public offer and sale of Securities or lend, contribute or otherwise make available such
proceeds to any subsidiary, affiliate, joint venture partner or any other person or entity for the purpose of financing or facilitating
any activity in violation of applicable Anti-Corruption Laws.
(rr) 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 agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending, or to the best knowledge of the Company,
threatened.
(ss) Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate
of the Company or any of its subsidiaries, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered
by OFAC.
(tt) Except
as described in the Registration Statement, the Statutory Prospectus and the Prospectus, the Company has not sold or issued any
shares of capital stock during the six-month period preceding the date of the Prospectus, including any sales pursuant to Rule
144A under, or Regulations D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified
stock options plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.
(uu) The
Company has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the U.S. Employee Retirement
Income Security Act of 1974 (“ERISA”) and the regulations and published interpretations thereunder with respect to
each “plan” as defined in Section 3(3) of ERISA and such regulations and published interpretations in which its employees
are eligible to participate and each such plan is in compliance in all material respects with the presently applicable provisions
of ERISA and such regulations and published interpretations. No “Reportable Event” (as defined in 12 ERISA) has occurred
with respect to any “Pension Plan” (as defined in ERISA) for which the Company could have any liability.
(vv) None
of the Company, its directors or its officers has distributed nor will distribute prior to the later of (i) the Closing Date and
(ii) completion of the distribution of the Securities, any offering material in connection with the offering and sale of the Securities
other than any Preliminary Prospectus, the Prospectus, the Registration Statement and other materials, if any, permitted by the
Securities Act and consistent with the terms of this Agreement.
(ww) Since
the date of the preliminary prospectus included in the Registration Statement filed with the Commission on [_________] (or, if
earlier, the first date on which the Company engaged directly or through any Person authorized to act on its behalf in any Testing-the-Waters
Communication (as defined herein)) through the date hereof, the Company has been and is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication”
means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
(xx) The
Company (a) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the
consent of the Representative with entities that are qualified institutional buyers within the meaning of Rule 144A under the
Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act, and (b)
has not authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company reconfirms
that the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company
has not distributed any Written Testing-the-Waters Communications (as defined herein) other than those listed on Schedule IV hereto.
“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication
within the meaning of Rule 405 under the Securities Act.
(yy) The
Company has the power to submit, and pursuant to Section 9 of this Agreement, has legally, validly, effectively and irrevocably
submitted, to the personal jurisdiction of each United States federal court and New York state court located in the Borough of
Manhattan, in the City of New York, New York, U.S.A. (each, a “New York Court”), and the Company has the power to
designate, appoint and authorize, and pursuant to Section 9 of this Agreement, has legally, validly, effectively and irrevocably
designated, appointed and authorized an agent for service of process in any action arising out of or relating to this Agreement
in any New York Court, and service of process effected on such authorized agent will be effective to confer valid personal jurisdiction
over the Company as provided in Section 9 hereof.
(zz) The
Company and each of its subsidiaries has all requisite corporate power and authority, and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and from all governmental or regulatory bodies or any other person or
entity (collectively, the “Permits”), to own, lease and license its assets and properties and conduct its business,
all of which are valid and in full force and effect, except where the lack of such Permits, individually or in the aggregate,
would not have a Material Adverse Effect. The Company and each of its subsidiaries has fulfilled and performed in all material
respects all of its obligations with respect to such Permits and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Company thereunder.
Except as may be required under the Securities Act and state and foreign Blue Sky laws, no other Permits are required to enter
into, deliver and perform this Agreement and to issue and sell the Securities.
(aaa) No
transaction, stamp or other issuance or transfer taxes or duties, and no capital gain, income transfer, withholder or other tax
or duty is payable on behalf of the Underwriters to any taxing authority or therein in connection with (i) the issuance, sale
and delivery of the Securities by the Company; (ii) the purchase from the Company, and the initial sale and delivery by the Underwriters
of the Securities to purchasers thereof; (iii) the holding or transfer of the Securities; or (iv) the execution and delivery of
this Agreement or any other document to be furnished hereunder.
(bbb) Any certificate signed by an officer or board member of the Company and delivered to the Underwriters or to counsel for the Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and warranty by the Company, as appropriate, to the Underwriters
as to matters covered thereby.
(ccc) Without limiting the Company’s representation and warranty under (a) above, all forward-looking statements, forecasts, estimates,
targets and predictions and expressions of opinion, belief, intention and expectation made by the Company expressed in or included
in the Registration Statement and in the General Disclosure Package, are truly and honestly held, are not misleading and have
been made on reasonable grounds after due and careful consideration of such relevant circumstances and assumptions reasonable
deemed relevant and there are no facts which have not been disclosed which by their omission make any such estimates materially
misleading or which are material for disclosure. Each of the assumptions used in the preparation of the forward-looking statements,
forecasts, estimates, targets and predictions are reasonable and, to the Company’s knowledge, there are no other material
assumptions that should reasonably be taken into account in the preparation of such information and the adjustments used therein
are appropriate to give effect to the transactions and circumstances referred to therein.
(ddd) (i) No outstanding indebtedness of the Company or any of its subsidiaries has become repayable before its stated maturity, nor
has any security in respect of such indebtedness become enforceable by reason of default by the Company or any of its subsidiaries,
and no event has occurred or is, the Company’s knowledge, impending which, with the lapse of time or the fulfilment of any
condition or the giving of notice or the compliance with any other formality, may reasonably be expected to result in any such
indebtedness becoming so repayable or any such security becoming enforceable and neither the Company nor any of its subsidiaries
has received notice from any person to whom any indebtedness of the Company or any of its subsidiaries which is repayable on demand
is owed, demanding or, to the Company’s knowledge, threatening to demand repayment of, or to take any steps to enforce any
security for, the same; (ii) the amounts borrowed by the Company or any of its subsidiaries do not exceed any limitation (A) on
borrowing contained in its constitutional documents, any debenture or other deed or document binding upon them, and neither the
Company nor any of its subsidiaries has outstanding any loan capital, or is or has engaged in a financing of a type which would
not be required to be shown or reflected in its audited accounts, except in any such case as would not, individually or in the
aggregate, have a Material Adverse Effect; and (B) all borrowing facilities of each of the Company and each of its subsidiaries
have been duly executed by such Group company and are in full force and effect and are in compliance with all covenants and undertakings
contained therein, except as may terminate in accordance with their terms.
(eee) The
Company and its subsidiaries have no pending insolvency, bankruptcy, composition or similar proceedings pending against them and
have no reason to believe that any such proceeding may be brought and are not in liquidation or receivership.
(fff) (i) All the information and communications technologies required for use in the business of the Company and its subsidiaries,
including, without limitation, hardware, proprietary and third party software, networks, peripherals and associated documentation
and any IT systems currently being implemented by the Company (“IT Systems”) used or planned to be used in
connection with the businesses of the Company and its subsidiaries: (A) are owned by, or properly licensed or leased to, the Company
or its subsidiaries, as applicable, for the foreseeable future following the offering of the Securities, and are not dependent
on any facilities or systems which are not under the ownership or control of the Company and its subsidiaries and the Company
and its subsidiaries do not share any user rights with any other person; and (B) are all the IT Systems required for the present
needs of the business of the Company and its subsidiaries and the anticipated requirements of the Company and its subsidiaries
and the Company has, for the foreseeable future following the offer of Securities, taken reasonable steps to ensure system capacity
and ability to process current peak volumes and anticipated volumes in a timely manner; (ii) in relation to the IT Systems, there
has not been any act or default by the Company or any of its subsidiaries or their sub-lessees, sub-licensees, sub-contractors
nor any other person, and there is no breach of any lease, license, support, maintenance service agreement, understanding or other
arrangement (together, “IT Contracts”) granted or provided by a third party in favor of the Company or any
of its subsidiaries which may in any way, in the reasonable opinion of the Company, result in any IT Contract being terminated.
There is no reason to believe that any IT Contract granted or provided by a third party will not be renewed when it expires on
the same or substantially the same terms (including as regards pricing and any other commercial details); (iii) there are no circumstances
in which the ownership, benefit or right to use the IT Systems may be lost or rendered liable to termination, by virtue of the
making of the public offer and sale of Securities as contemplated by this Agreement (and the Registration Statement and the General
Disclosure Package), the entry into and performance of this Agreement and each agreement referred to in it, or the offering and
sale of the Securities, except for any such losses or terminations that would not, individually or in the aggregate, have a Material
Adverse Effect or otherwise be material in the context of the offering of Securities.
(ggg) The Company and its subsidiaries comply in all material respects with all applicable data protection laws, guidelines and industry
standards and of any privacy policies of its own. Neither the Company nor any of its subsidiaries has received any notice from
a competent authority (including any information or enforcement notice, or any transfer prohibition notice) alleging that the
Company or any of its subsidiaries has not complied with applicable data protection laws, guidelines and industry standards. None
of the Company or any of its subsidiaries has received any material unresolved written claim from an individual for compensation
for breaches of applicable data protection laws or for loss or unauthorized disclosure of personal data.
(hhh) Neither the Company nor any of its subsidiaries has engaged in price exchange, price fixing or other comparable anti-competitive
practices. Neither the Company nor any of its subsidiaries is a party to any agreement, arrangement or concerted practice or is
carrying on any practice which in whole or in part contravenes or is invalidated by any anti-trust, anti-monopoly, competition,
fair trading, consumer protection or similar legislation in any jurisdiction of the Company or any of its subsidiaries is established
or operating or in respect of which any filing, registration or notification is required or is advisable pursuant to such legislation
(whether or not the same has in fact been made), except for any such contraventions or invalidations, or any such failures to
make a filing, registration or notification, that would not, individually or in the aggregate, have a Material Adverse Effect
or otherwise be material in the context of the public offer and sale of Securities.
(iii) Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.
3.
Conditions of the Underwriters’ Obligations. The obligations of the Underwriters under this Agreement are several
and not joint. The respective obligations of the Underwriters to purchase the Securities are subject to each of the following
terms and conditions:
(a) Notification
that the Registration Statement has become effective shall have been received by the Representative and the Prospectus shall have
been timely filed with the Commission in accordance with Section 4(a) of this Agreement and any material required to be filed
by the Company pursuant to Rule 433(d) of the Rules shall have been timely filed with the Commission in accordance with such rule.
(b)
No order preventing or suspending the use of any Preliminary Prospectus, the Prospectus or any “free writing prospectus”
(as defined in Rule 405 of the Rules), shall have been or shall be in effect and no order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission,
and any requests for additional information on the part of the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of the Commission and the Representative. If the Company
has elected to rely upon Rule 430A, Rule 430A information previously omitted from the effective Registration Statement pursuant
to Rule 430A shall have been transmitted to the Commission for filing pursuant to Rule 424(b) within the prescribed time period
and the Company shall have provided evidence satisfactory to the Underwriters of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared effective in accordance with the requirements of Rule 430A.
(c) The
representations and warranties of the Company contained in this Agreement and in the certificates delivered pursuant to Section
3(d) shall be true and correct when made and on and as of each Closing Date as if made on such date. The Company shall have performed
all covenants and agreements and satisfied all the conditions contained in this Agreement required to be performed or satisfied
by it at or before such Closing Date.
(d) The
Representative shall have received on the Closing Date a certificate, addressed to the Representative and dated the Closing Date,
of the chief executive or chief operating officer and the chief financial officer or chief accounting officer of the Company to
the effect that: (i) the representations, warranties and agreements of the Company in this Agreement were true and correct when
made and are true and correct as of the Closing Date; (ii) the Company has performed all covenants and agreements and satisfied
all conditions contained herein; (iii) they have carefully examined the Registration Statement, the Prospectus, the General Disclosure
Package, and any individual Issuer Free Writing Prospectus and, in their opinion (A) as of the Effective Date the Registration
Statement and Prospectus did not include, and as of the Applicable Time, neither (i) the General Disclosure Package, nor
(ii) any individual Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, included
any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading, and (B) since the Effective
Date, no event has occurred which should have been set forth in a supplement or otherwise required an amendment to the Registration
Statement, the Statutory Prospectus or the Prospectus; (iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and, to their knowledge, no proceedings for that purpose have been instituted or are pending under the Securities
Act and (v) there has not occurred any Material Adverse Effect.
(e) The
Representative shall have received: (i) simultaneously with the execution of this Agreement, a signed letter from the Auditor
addressed to the Representative and dated the date of this Agreement, in form and substance reasonably satisfactory to the Representative,
containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters
with respect to the financial statements and certain financial information contained in the Registration Statement and the General
Disclosure Package, and (ii) on the Closing Date, a signed letter from the Auditor addressed to the Representative and dated the
date of the Closing Date, in form and substance reasonably satisfactory to the Representative containing statements and information
of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in the Registration Statement and the Prospectus.
(f) The
Representative shall have received on the Closing Date from Lucosky Brookman LLP, counsel for the Company, an opinion and negative
assurance statement, addressed to the Representative and dated the Closing Date, in form and substance reasonably satisfactory
to the Representative.
(g) The
Representative shall have received on the Closing Date from Schmeiser, Olsen & Watts
LLP, intellectual property counsel for the Company, an opinion and written negative assurances statement, addressed to the
Representative and dated the Closing Date, in form and substance satisfactory to the Representative.
(h) The
Representative shall have received on the Closing Date from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the
Representative, a negative assurance statement, addressed to the Representative and dated as of the Closing Date, with respect
to such matters as the Representative may reasonably require, and the Company shall have furnished or provided access to such
counsel of such documents as they request for enabling them to pass upon such matters.
(i) All
proceedings taken in connection with the sale of the Securities as herein contemplated shall be reasonably satisfactory in form
and substance to the Representative and its counsel.
(j) The
Representative shall have received copies of the Lock-up Agreements executed by each entity or person listed on Schedule II hereto.
In the event that Oppenheimer & Co. Inc., in its sole discretion, agrees to release or waive any restriction set forth in
a Lock-Up Agreement for an officer or director of the Company, and provides the Company with notice of the impending release or
waiver at least three (3) Business Days before the effective date of such release or waiver (which release or waiver shall be
substantially in the Form found at Exhibit A-1 attached hereto), the Company agrees to announce the impending release or waiver
by a press release substantially in the form of Exhibit A-2 attached hereto through a major news service at least two (2) Business
Days before the effective date of the release or waiver.
(k) The
Securities shall have been approved for listing and quotation on the Nasdaq Capital Market, subject only to official notice of
issuance, and the Company has taken no action designed to, or likely to have the effect of, delisting the Securities, nor has
the Company received any notification that the Nasdaq Capital Market is contemplating terminating such listing.
(l) The
Representative shall be reasonably satisfied that since the respective dates as of which information is given in the Registration
Statement, the Statutory Prospectus, the General Disclosure Package and the Prospectus, (i) there shall not have been any material
change in the capital stock of the Company or any material change in the indebtedness (other than in the ordinary course of business)
of the Company, (ii) except as set forth or contemplated by the Registration Statement, the Statutory Prospectus, the General
Disclosure Package or the Prospectus, no material oral or written agreement or other transaction shall have been entered into
by the Company that is not in the ordinary course of business or that could reasonably be expected to result in a material reduction
in the future earnings of the Company, (iii) no loss or damage (whether or not insured) to the property of the Company shall have
been sustained that had or could reasonably be expected to have a Material Adverse Effect, (iv) no legal or governmental action,
suit or proceeding affecting the Company or any of its properties that is material to the Company or that affects or could reasonably
be expected to affect the transactions contemplated by this Agreement shall have been instituted or threatened and (v) there shall
not have been any material change in the assets, properties, condition (financial or otherwise), or in the results of operations,
business affairs or business prospects of the Company or its subsidiaries considered as a whole that makes it impractical or inadvisable
in the Representative’s judgment to proceed with the purchase or offering of the Securities as contemplated hereby.
(m) FINRA
shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting
terms and agreements in connection with the offering of the Securities.
(n) The
Company shall have furnished or caused to be furnished to the Representative such further certificates or documents as the Representative
shall have reasonably requested.
(o) The
Warrant Agreement, duly executed by each of the Company and the Warrant Agent, substantially in the form of Exhibit B hereto,
shall have been delivered to the Representative on the Closing Date.
4.
Covenants and other Agreements of the Company and the Underwriters.
(a)
The Company covenants and agrees as follows:
(i) The
Company will use its best efforts to cause the Registration Statement, if not effective at the time of execution of this Agreement,
and any amendments thereto, to become effective as promptly as possible. The Company shall prepare the Prospectus in a form approved
by the Representative and file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s
close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by the Rules. The Company will file with the Commission all Issuer Free Writing Prospectuses in the time
and manner required under Rules 433(d) or 163(b)(2), as the case may be.
(ii) The
Company shall promptly advise the Representative in writing (A) when any post-effective amendment to the Registration Statement
shall have become effective or any supplement to the Prospectus shall have been filed, (B) of any request by the Commission for
any amendment of the Registration Statement or the Prospectus or for any additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus or any “free writing prospectus”, as defined in Rule 405 of the Rules, or the institution
or threatening of any proceeding for that purpose and (D) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company shall not file any amendment of the Registration Statement or supplement to the Prospectus or any
Issuer Free Writing Prospectus unless the Company has furnished the Representative a copy for its review and obtained the Representative’s
consent (not to be reasonably withheld) prior to filing and shall not file any such proposed amendment or supplement to which
the Representative reasonably objects. The Company shall use its best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(iii) If,
at any time when a prospectus relating to the Securities (or, in lieu thereof, the notice referred to in Rule 173(a) of the Rules)
is required to be delivered under the Securities Act, any event occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Securities Act or the Rules, the Company promptly shall prepare and file with the Commission,
subject to the second sentence of paragraph (ii) of this Section 4(a), an amendment or supplement which shall correct such statement
or omission or an amendment which shall effect such compliance.
(iv) If
at any time following issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which
such Issuer Free Writing Prospectus would conflict with the information contained in the Registration Statement or would include
an untrue statement of a material fact or would omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances prevailing at the subsequent time, not misleading, the Company
will promptly notify the Representative 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.
(v) The
Company shall make generally available to its security holders and to the Representative as soon as practicable, but not later
than forty-five (45) days after the end of the 12-month period beginning at the end of the fiscal quarter of the Company during
which the Effective Date occurs (or ninety (90) days if such 12-month period coincides with the Company’s fiscal year),
an earning statement (which need not be audited) of the Company, covering such 12-month period, which shall satisfy the provisions
of Section 11(a) of the Securities Act or Rule 158 of the Rules.
(vi) The
Company shall furnish to the Representative and counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and all amendments thereof and, so long as delivery of a prospectus by an Underwriter or dealer may
be required by the Securities Act or the Rules, as many copies of any Preliminary Prospectus, any Issuer Free Writing Prospectus
and the Prospectus and any amendments thereof and supplements thereto as the Representative may reasonably request. If applicable,
the copies of the Registration Statement, Preliminary Prospectus, any Issuer Free Writing Prospectus and Prospectus and each amendment
and supplement 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.
(vii) The
Company shall cooperate with the Representative and its counsel in endeavoring to qualify the Securities for offer and sale in
connection with the offering under the laws of such jurisdictions as the Representative may designate and shall maintain such
qualifications in effect so long as required for the distribution of the Securities.
(viii) The
Company, during the period when the Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) of the Rules) is required
to be delivered under the Securities Act and the Rules or the Exchange Act, will file all reports and other documents required
to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the time periods required by the Exchange
Act and the regulations promulgated thereunder.
(ix) Without
the prior written consent of Oppenheimer & Co. Inc., for a period of one hundred and eighty (180) days after the date of this
Agreement, the Company shall not issue, sell or register with the Commission (other than on Form S-8 or on any successor form),
or otherwise dispose of, directly or indirectly, any equity securities of the Company (or any securities convertible into, exercisable
for or exchangeable for equity securities of the Company), except for the issuance of the Securities pursuant to the Registration
Statement and the issuance of securities pursuant to the Company’s existing stock option plan or bonus plan as described
in the Registration Statement and the Prospectus. In
the event that during this period, (A) any shares are issued pursuant to the Company’s existing stock option plan or bonus
plan that are exercisable during such 180-day period or (B) any registration is effected on Form S-8 or on any successor form
relating to shares that are exercisable during such 180-day period, the Company shall obtain the written agreement of such grantee
or purchaser or holder of such registered securities that, for a period of one hundred and eighty (180) days after the date of
this Agreement, such person will not, without the prior written consent of Oppenheimer & Co. Inc., offer for sale, sell, distribute,
grant any option for the sale of, or otherwise dispose of, directly or indirectly, or exercise any registration rights with respect
to, any securities owned by such person. Notwithstanding the foregoing, the Company represents and warrants that each such grantee
or purchaser or holder of such registered securities shall be subject to similar lockup restrictions as set forth on Exhibit A
attached hereto and the Company shall enforce such rights and impose stop-transfer restrictions on any such sale or other transfer
or disposition of such shares until the end of the applicable period.
(x) On
or before completion of this offering, the Company shall make all filings required under applicable securities laws and by the
Nasdaq Capital Market (including any required registration under the Exchange Act).
(xi) Prior
to the Closing Date, the Company will issue no press release or other communications directly or indirectly and hold no press
conference with respect to the Company, the condition, financial or otherwise, or the earnings, business affairs or business prospects
of any of them, or the offering of the Securities without the prior written consent of the Representative unless in the judgment
of the Company and its counsel, and after notification to the Representative, such press release or communication is required
by law.
(xii) The
Company will apply the net proceeds from the offering of the Securities in the manner set forth under “Use of Proceeds”
in the Prospectus.
(xiii) The
Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the
later of (a) completion of the distribution of the Securities within the meaning of the Securities Act and (b) completion
of the 180-day restricted period referred to in Section 4(a)(ix) hereof.
(xiv) If
at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development
as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly
amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement
or omission.
(b)
The Company agrees to pay, or reimburse if paid by the Representative, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses incident to the public offering of the Securities and
the performance of the obligations of the Company under this Agreement including those relating to: (i) the preparation, printing,
reproduction filing and distribution of the Registration Statement, including all exhibits thereto, each Preliminary Prospectus,
the Prospectus, any Issuer Free Writing Prospectus, all amendments and supplements thereto, and the printing, filing and distribution
of this Agreement; (ii) the preparation and delivery of certificates for the Securities to the Underwriters, if applicable; (iii)
the registration or qualification of the Securities for offer and sale under the securities or Blue Sky laws of the various jurisdictions
referred to in Section 4(a)(vii), including the reasonable fees and disbursements of counsel for the Underwriters in connection
with such registration and qualification and the preparation, printing, distribution and shipment of preliminary and supplementary
Blue Sky memoranda; (iv) the furnishing (including costs of shipping and mailing) to the Representative and to the Underwriters
of copies of each Preliminary Prospectus, the Prospectus and all amendments or supplements to the Prospectus, any Issuer Free
Writing Prospectus, and of the several documents required by this Section to be so furnished, as may be reasonably requested for
use in connection with the offering and sale of the Securities by the Underwriters or by dealers to whom Securities may be sold;
(v) the filing fees of FINRA in connection with its review of the terms of the public offering and reasonable fees and disbursements
of counsel for the Underwriters in connection with such review; (vi) inclusion of the Securities for quotation on the Nasdaq Capital
Market; (vii) all transfer taxes, if any, with respect to the sale and delivery of the Securities by the Company to the Underwriters;
and (viii) all costs and expenses incident to the offering and the performance of the obligations of the Company under this Agreement,
and all reasonable out-of-pocket costs and expenses incident to the performance of the obligations of the Representative under
this Agreement (including, without limitation, the fees and expenses of Underwriters’ outside attorneys), provided that
any such out-of-pocket costs and expenses shall not exceed (without the prior consent of the Company which shall not be unreasonably
withheld, conditioned or delayed) $150,000 and; provided, further, that, for purposes of clarity, expenses in excess of an aggregate
of $200,000 will not be reimbursed to the Underwriters. In addition to the payments set forth in this Section, the Company agrees
that, the Company grants to the Representative, for a period of twelve (12) months from the date of this Agreement, the right
of first refusal to act as lead bookrunning underwriter, lead initial purchaser, lead placement agent, or lead selling agent,
as the case may be, on any financing for the Company. In the event the Company advises the Representative that it desires to effect
any such financing, the Representative shall have five (5) business days from such notice to notify the Company that it intends
to exercise its right of first refusal, and the Company and the Representative will negotiate in good faith the terms of the Representative’s
engagement in a separate agreement, which agreement would set forth, among other matters, compensation for the Representative
based upon customary fees for the services provided.The Representative’s participation in any such financing will be subject
to the approval of the Representative’s internal committees and other conditions customary for such an undertaking.
(c) The
Company acknowledges and agrees that each of the Underwriters has acted and is acting solely in the capacity of a principal in
an arm’s length transaction between the Company, on the one hand, and the Underwriters, on the other hand, with respect
to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not
as a financial advisor, agent or fiduciary to the Company or any other person, and that the Underwriters may have interests that
differ from those of the Company. Additionally, the Company acknowledges and agrees that the Underwriters have not and will not
advise the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.
The Company has consulted with its own advisors concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability
to the Company or any other person with respect thereto, whether arising prior to or after the date hereof. Any review by the
Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions have been and
will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company. The Company agrees that
it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary
duty to the company or any other person in connection with any such transaction or the process leading thereto.
(d)
The Company represents and agrees that, unless it obtains the prior consent of the Representative, and each Underwriter represents
and agrees that, unless it obtains the prior consent of the Company and the Representative, it has not made and will not make
any offer relating to the Securities that would constitute an “issuer free writing prospectus,” as defined in Rule 433,
or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed
with the Commission. The Company has complied and will comply with the requirements of Rule 433 under the Securities Act applicable
to any Issuer Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.
The Company represents that it has satisfied and agrees that it will satisfy the conditions set forth in Rule 433 of the Rules
to avoid a requirement to file with the Commission any Road Show.
(e) The
Company shall ensure that: (i) the qualifications of the persons serving as board members and the overall composition of the Board
of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and with the listing requirements
of the Trading Market and (ii) if applicable, at least one member of the Board of Directors qualifies as a “financial expert”
as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
5.
Indemnification.
(a) The
Company agrees to indemnify and hold harmless each Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses,
claims, damages and liabilities, joint or several (including any reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted), to which they, or
any of them, may become subject under the Securities Act, the Exchange Act or other federal or state law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities arise, directly or indirectly, in connection with, out
of or are based upon i) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus,
the Registration Statement, the Statutory Prospectus, the Prospectus, any Issuer Free Writing Prospectus or any “issuer-information”
filed or required to be filed pursuant to Rule 433(d) of the Rules, any amendment thereof or supplement thereto, any Written Testing-the-Waters
Communication, or in any Blue Sky application or other information or other documents executed by the Company filed in any state
or other jurisdiction to qualify any or all of the Securities under the securities laws thereof (any such application, document
or information being hereinafter referred to as a “Blue Sky Application”), ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or iii)
any actual or alleged breach by the Company of any of its obligations, or of any of its representations, warranties and undertakings,
set out in this Agreement; provided, however, that such indemnity shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) on account of any losses, claims, damages or liabilities arising from the sale of the Securities
to any person by such Underwriter if such untrue statement or omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement, the Prospectus, the Statutory Prospectus, any Issuer Free Writing Prospectus
or such amendment or supplement thereto, any Written Testing-the-Waters Communication, or in any Blue Sky Application in reliance
upon and in conformity with the Underwriter Information, or if any such losses, claims, damages or liabilities have arisen from
(i) the fraud, gross negligence, willful misconduct or bad faith of, or material breach of the Agreement by the person entitled
to indemnification to the extent finally judicially determined by a court of competent jurisdiction or by a regulatory authority
(as appropriate) or (ii) a breach of the duties owed by an person to indemnification under relevant regulatory rules to the extent
finally judicially determined by a court of competent jurisdiction or by a regulatory authority (as appropriate). This indemnity
agreement will be in addition to any liability which the Company may otherwise have.
(b) Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each director of the Company,
and each officer of the Company who signs the Registration Statement, against any losses, claims, damages or liabilities to which
such party may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto,
or arise, directly or indirectly, in connection with, out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement, the Statutory Prospectus or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with the Underwriter Information; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any controlling person, director or officer thereof) shall be limited to the amount
of the underwriting discount and commissions applicable to the Securities to be purchased by such Underwriter hereunder, and that
that such indemnity shall not inure to the benefit of the Company (or any person controlling such Company) on account of any losses,
claims, damages or liabilities arising from (i) the fraud, gross negligence, willful misconduct or bad faith of, or material breach
of the Agreement by the person entitled to indemnification to the extent finally judicially determined by a court of competent
jurisdiction or by a regulatory authority (as appropriate) or (ii) a breach of the duties owed by an person to indemnification
under relevant regulatory rules to the extent finally judicially determined by a court of competent jurisdiction or by a regulatory
authority (as appropriate).
(c) Any
party that proposes to assert the right to be indemnified under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing
a copy of all papers served. No indemnification provided for in Section 5(a) or 5(b) shall be available to any party who shall
fail to give notice as provided in this Section 5(c) if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to give such notice but the omission so to notify such
indemnifying party of any such action, suit or proceeding shall not relieve it from any liability that it may have to any indemnified
party for contribution or otherwise than under this Section. In case any such action, suit or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof and the approval by the indemnified party of
such counsel, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified
party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it which are different from or in addition to those available to the
indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such action
within a reasonable time after notice of the commencement thereof, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement of any action, suit,
and proceeding or claim effected without its written consent, which consent shall not be unreasonably withheld or delayed. No
indemnifying party shall settle any action, suit or proceeding for which indemnification or contribution is or would have been
available hereunder to an indemnified person that was or could have been made party thereto without obtaining a release in favor
of each such indemnified person from all claims brought in or arising from such action, suit or proceeding.
6. Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section
5(a) or 5(b) is due in accordance with its terms but for any reason is unavailable to or insufficient to hold harmless an indemnified
party in respect to any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate losses, liabilities, claims, damages and expenses (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder to contribution from any person who may be liable
for contribution) incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant
to this Agreement or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to above but also the relative fault of the Company on the one hand and the Underwriters on
the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses,
as well as any other relevant equitable considerations. The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred
to above. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, no Underwriter (except as may be provided in the Agreement Among Underwriters)
shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Securities
purchased by such Underwriter. 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. For purposes of
this Section 6, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, including
any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company,
each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the
meaning of the Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have the same rights to contribution
as the Company. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under
this Section 6, notify such party or parties from whom contribution may be sought, but the omission so to notify such party or
parties from whom contribution may be sought shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this Section 6. No party shall be liable for contribution
with respect to any action, suit, proceeding or claim settled without its written consent. The Underwriters’ obligations
to contribute pursuant to this Section 6 are several in proportion to their respective underwriting commitments and not joint.
7. Termination.
(a) This
Agreement may be terminated with respect to the Securities to be purchased on the Closing Date by the Representative by notifying
the Company at any time at or before the Closing Date in the absolute discretion of the Representative if: (i) there has occurred
any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted, or in the
opinion of the Representative, will in the future materially disrupt, the securities markets or there shall be such a material
adverse change in general financial, political or economic conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of the Representative, inadvisable or impracticable to market
the Securities or enforce contracts for the sale of the Securities; (ii) there has occurred any outbreak or material escalation
of hostilities or acts of terrorism or other calamity or crisis the effect of which on the financial markets of the United States
is such as to make it, in the judgment of the Representative, inadvisable or impracticable to market the Securities or enforce
contracts for the sale of the Securities; (iii) trading in the Securities or any securities of the Company has been suspended
or materially limited by the Commission or trading generally on the New York Stock Exchange, Inc. or the Nasdaq Stock Market has
been suspended or materially limited, or minimum or maximum ranges for prices for securities shall have been fixed, or maximum
ranges for prices for securities have been required, by any of said exchanges or by such system or by order of the Commission,
FINRA, or any other governmental or regulatory authority; (iv) a banking moratorium has been declared by any state or federal
authority; (v) in the judgment of the Representative, there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any material adverse change in the assets, properties, condition,
financial or otherwise, or in the results of operations, business affairs or business prospects of the Company and its subsidiaries
considered as a whole, whether or not arising in the ordinary course of business; (vi) the representations and warranties given
by the Company in this Agreement have ceased to be true and accurate in all material respects; or (vii) there has been a material
breach by the Company of any of the covenants contained in this Agreement.
(b) If
this Agreement is terminated pursuant to any of its provisions, the Company shall not be under any liability to any Underwriter,
and no Underwriter shall be under any liability to the Company, except that (y) if this Agreement is terminated by the Representative
or the Underwriters because of any failure, refusal or inability on the part of the Company to comply with the terms or to fulfill
any of the conditions of this Agreement, the Company will reimburse the Underwriters for all out-of-pocket expenses (including
the reasonable fees and disbursements of their counsel) incurred by them in connection with the proposed purchase and sale of
the Securities or in contemplation of performing their obligations hereunder and (z) no Underwriter who shall have failed or refused
to purchase the Securities agreed to be purchased by it under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, shall be relieved of liability to the Company or to the other
Underwriters for damages occasioned by its failure or refusal.
8. Substitution
of Underwriters. If any Underwriter shall default in its obligation to purchase on the Closing Date the Securities agreed
to be purchased hereunder on the Closing Date, the Representative shall have the right, within thirty-six (36) hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase such Securities
on the terms contained herein. If, however, the Representative shall not have completed such arrangements within such 36-hour
period, then the Company shall be entitled to a further period of thirty-six (36) hours within which to procure another party
or other parties satisfactory to the Underwriters to purchase such Securities on such terms. If, after giving effect to any arrangements
for the purchase of the Securities of a defaulting Underwriter or Underwriters by the Representative and the Company as provided
above, the aggregate number of Securities which remains unpurchased on the Closing Date does not exceed one-eleventh (1/11) of
the aggregate number of all the Securities that all the Underwriters are obligated to purchase on such date, then the Company
shall have the right to require each non-defaulting Underwriter to purchase the number of Securities which such Underwriter agreed
to purchase hereunder at such date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share
(based on the number of Securities which such Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default. In any such case, either the Representative or the Company shall have the right to postpone the Closing
Date for a period of not more than seven (7) days in order to effect any necessary changes and arrangements (including any necessary
amendments or supplements to the Registration Statement or Prospectus or any other documents), and the Company agrees to file
promptly any amendments to the Registration Statement or the Prospectus which in the opinion of the Company and the Underwriters
and their counsel may thereby be made necessary.
If,
after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the
Representative and the Company as provided above, the aggregate number of such Securities which remains unpurchased exceeds 10%
of the aggregate number of all the Securities to be purchased at such date, then this Agreement shall terminate, without liability
on the part of any non-defaulting Underwriter to the Company, and without liability on the part of the Company, except as provided
in Sections 4(b), 5, 6 and 7. The provisions of this Section 8 shall not in any way affect the liability of any defaulting Underwriter
to the Company or the nondefaulting Underwriters arising out of such default. The term “Underwriter” as used in this
Agreement shall include any person substituted under this Section 8 with like effect as if such person had originally been a party
to this Agreement with respect to such Securities.
9.
Miscellaneous. The respective agreements, representations, warranties, indemnities and other statements of the Company
and the several Underwriters, as set forth in this Agreement or made by or on behalf of them pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or the Company or any of their respective officers, directors or controlling persons referred to in Sections
5 and 6 hereof, and shall survive delivery of and payment for the Securities. In addition, the provisions of Sections 4(b), 5,
6 and 7 shall survive the termination or cancellation of this Agreement.
This
Agreement has been and is made for the benefit of the Underwriters, the Company, and their respective successors and assigns,
and, to the extent expressed herein, for the benefit of persons controlling any of the Underwriters, or the Company, and directors
and officers of the Company, and their respective successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term “successors and assigns” shall not include any purchaser of Securities
from any Underwriter merely because of such purchase.
All
notices and communications hereunder shall be in writing and mailed or delivered or by telephone or facsimile if subsequently
confirmed in writing, (a) if to the Representative, c/o Oppenheimer & Co. Inc., 85 Broad Street, New York, New York 10004
Attention: Equity Capital Markets, with a copy to Oppenheimer & Co. Inc., 85 Broad Street, New York, New York 10004 Attention:
General Counsel, and to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 666 Third Avenue, New York, New York 10017, Attention:
Ivan K. Blumenthal, Esq., Facsimile: 212-983-3115, and (b) if to the Company, to its agent for service as such agent’s
address appears on the cover page of the Registration Statement, with a copy to Lucosky Brookman LLP, 101 Wood Avenue South, Woodbridge,
New Jersey 08830, Attention: Lawrence Metelitsa, Esq.
This
Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements
made and to be performed in such state. Any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United
States of America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case
located in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment
of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such
suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth
above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably
and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other
proceeding brought in any such court has been brought in an inconvenient forum.
With
respect to any Related Proceeding, each party irrevocably waives, to the fullest extent permitted by applicable law, all immunity
(whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts, and with respect to any Related Judgment, each
party waives any such immunity in the Specified Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related Proceeding or Related Judgment, including, without
limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976, as amended.
The
obligations of the Company pursuant to this Agreement in respect of any sum due to the Underwriters shall, notwithstanding any
judgment in a currency other than United States dollars, not be discharged until the first business day, following receipt by
the Underwriters of any sum adjudged to be so due in such other currency, on which the Underwriters may in accordance with normal
banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less
than the sum originally due to the Underwriters in United States dollars hereunder, the Company agrees as a separate obligation
and notwithstanding any such judgment, to indemnify the Underwriters against such loss. If the United States dollars so purchased
are greater than the sum originally due to the Underwriters hereunder, the Underwriters agree to pay to the Company an amount
equal to the excess of the dollars so purchased over the sum originally due to the Underwriters hereunder.
All
payments made or deemed to be made by the Company under this Agreement, if any, will be made without withholding or deduction
for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature (other than taxes
on net income) imposed or levied by any jurisdiction from or through which payment is made, or, in each case, any political subdivision
or any taxing authority thereof or therein unless the Company is or becomes required by law to withhold or deduct such taxes,
duties, assessments or other governmental charges. In such event, the Company will pay such additional amounts as will result,
after such withholding or deduction, in the receipt by each Underwriter, its officers and employees, and each person controlling
any Underwriter, as the case may be, of the amounts that would otherwise have been receivable in respect thereof.
[Remainder
of Page Intentionally Left Blank. Signature Page Follows.]
This
Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
Please
confirm that the foregoing correctly sets forth the agreement among us.
| |
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Very truly yours, |
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|
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MODULAR MEDICAL, INC. |
| |
|
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By: |
|
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|
Name: |
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|
Title: |
Confirmed:
OPPENHEIMER & CO. INC.
___________________________________
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I
annexed
hereto.
[Signature
Page to Underwriting Agreement]
SCHEDULE
I
| |
|
|
| Name |
Number
of
Shares and
Warrants to
Be Purchased |
|
| |
|
|
Oppenheimer
& Co. Inc.
Lake Street Capital Markets,
LLC
The Benchmark Company, LLC |
|
|
| |
|
|
| Total |
|
|
| |
|
|
| |
|
|
| |
|
|
SCHEDULE II
Lock-up Signatories
Paul DiPerna
Ellen O’Connor Vos
Liam Burns
William J. Febbo
Morgan C. Frank
Carmen Volkart
James Besser
JEB Partners, L.P.
Manchester Explorer, L.P.
Manchester Management LLC
SCHEDULE III
Issuer Free Writing
Prospectuses
[None]
SCHEDULE IV
Testing-the-Waters
Communications
[TO COME]
Exhibit
A
[Form of Lock-Up
Agreement]
Exhibit
A-1
[Form
of Waiver of Lock-up]
[Oppenheimer Letterhead]
[corporation]
Public Offering of Common Stock
[
], 20[ ]
[Name and Address of
Officer or Director
Requesting Waiver]
Dear Mr./Ms. [Name]:
This
letter is being delivered to you in connection with the offering by [Corporation] (the “Company”) of [ ] shares of
common stock, $0.001 par value (the “Common Stock”) of the Company, and the lock-up agreement dated [ ], 2021 (the
“Lock-up Agreement”), executed by you in connection with such offering, and your request for a [waiver] [release]
dated [ ], 20[ ], with respect to [ ] shares of Common Stock (the “Securities”).
Oppenheimer
& Co. Inc. hereby agrees to [waive] [release] the transfer restrictions set forth in the Lock-up Letter, but only with respect
to the Securities, effective [ ], 20[ ][date to be 3 business days from date of letter]; provided, however, that
such [waiver] [release] is conditioned on the Company announcing the impending [waiver] [release] by press release through a major
news service at least two (2) business days before effectiveness of such [waiver] [release]. This letter will serve as notice
to the Company of the impending [waiver] [release].
Except
as expressly [waived] [released] hereby, the Lock-up Letter shall remain in full force and effect.
| |
|
|
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Yours very truly, |
| |
|
| |
OPPENHEIMER & CO.
INC. |
| |
|
| |
By: |
|
| |
Name: |
| |
Title: |
cc: [Company
contact]
Exhibit
A-2
[Form
of Lock Up Waiver/Release Company Press Release]
[Company]
[Date]
(“[Company]”)
announced today that Oppenheimer & Co. Inc., the [lead book-running] manager in the Company’s recent public sale of
[ ] shares of common stock, is [waiving] [releasing] a lock-up restriction with respect to [ ] shares of the Company’s common
stock held by [ ], an [officer/director] of the Company. The [waiver] [release] will take effect on [ ], 20[ ], and the related
shares may be sold on or after such date.
This press release is not an offer
for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities
may not be offered or sold in the United States absent registration or an exemption from registration under the United States
Securities Act of 1933, as amended.
Exhibit
B
Form of Warrant Agreement
