Exhibit 1.1
UNDERWRITING AGREEMENT
between
MANHATTAN BRIDGE CAPITAL, INC.
and
AEGIS CAPITAL CORP.,
as Representative of the Several Underwriters
MANHATTAN BRIDGE CAPITAL, INC.
UNDERWRITING AGREEMENT
New York, New York
May 22, 2015
Aegis Capital Corp.
As Representative of the several Underwriters named on Schedule
1 attached hereto
810 Seventh Avenue, 18th Floor
New York, New York 10019
Ladies and Gentlemen:
The undersigned, Manhattan
Bridge Capital, Inc., a corporation formed under the laws of the State of New York (the “Company”), hereby confirms
its agreement (this “Agreement”) with Aegis Capital Corp. (hereinafter referred to as “you”
(including its correlatives) or the “Representative”) and with the other underwriters named on Schedule 1
hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively
called the “Underwriters” or, individually, an “Underwriter”) as follows:
1. Purchase
and Sale of Shares.
1.1 Firm
Shares.
1.1.1 Nature
and Purchase of Firm Shares.
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an aggregate of 1,015,000, common shares (the “Firm Shares”),
par value $0.001 per share of the Company (the “ Common Shares”).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their
respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $4.0827, per Firm Share (93%
of the per Firm Share offering price). The Firm Shares are to be offered to the public at the offering price set forth on the cover
page of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2 Firm
Shares Payment and Delivery.
(i) Delivery
and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time, on the third (3rd) Business Day following
the date of this Agreement (or the fourth (4th) Business day following the date of this Agreement if the Firm Shares
are priced after 4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company,
at the offices of Blank Rome LLP, 405 Lexington Avenue, New York, NY 10174 (“Representative Counsel”), or at
such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and
the Company. The hour and date of delivery and payment for the Firm Shares is called the “Closing Date.”
(ii) Payment
for the Firm Shares shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of the
Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares
(or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The
Firm Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in
writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver the
Firm Shares except upon tender of payment by the Representative for all of the Firm Shares. The term “Business Day”
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated
by law to close in New York, New York.
1.2 Over-allotment
Option.
1.2.1 Additional
Shares. The Company hereby grants to the Underwriters an option (the “Over-allotment Option”) to purchase
up to an additional 152,250, Common Shares, representing up to 15% of the Firm Shares sold in the Offering (the “Additional
Shares”), for the purpose of covering over-allotments of such securities, if any. The Firm Shares and the Additional
Shares are collectively referred to as the “Public Securities”. The Public Securities shall be issued directly
by the Company and shall have the rights and privileges described in the Registration Statement, the Disclosure Package and the
Prospectus referred to below. The offering and sale of the Public Securities is herein referred to as the “Offering”.
1.2.2 Exercise
of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Additional Shares within 45 days after the date hereof. The purchase price
to be paid per Additional Share shall be equal to the price per Firm Share set forth in Section 1.1.1 hereof. The Representative
shall not be under any obligation to purchase any Additional Shares prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby shall be exercised by the giving of electronic notice to the Company from the Representative, which shall
be confirmed in writing by overnight mail or facsimile or other electronic transmission, setting forth the number of Additional
Shares to be purchased and the date and time for delivery of and payment for the Additional Shares (the “Option Closing
Date”), which shall not be later than five (5) full Business Days after the date of the notice or such other time as
shall be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place (including
remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such
delivery and payment for the Additional Shares does not occur on the Closing Date, the Option Closing Date will be as set forth
in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Additional Shares, subject
to the terms and conditions set forth herein, the Company shall become obligated to sell to the Representative the number of Additional
Shares specified in such notice.
1.2.3 Payment
and Delivery. Payment for the Additional Shares shall be made on the Option Closing Date by wire transfer in Federal (same
day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the
Representative) representing the Additional Shares (or through the facilities of DTC) for the account of the Representative. The
Additional Shares shall be registered in such name or names and in such authorized denominations as the Representative may request
in writing at least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to sell or
deliver the Additional Shares except upon tender of payment by the Representative for applicable Additional Shares. The Option
Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date are simultaneous
with the Closing Date, the term “ Closing Date ” shall refer to the time and date of delivery of the Firm Shares
and Additional Shares.
1.3 Representative’s
Warrants.
1.3.1 Purchase
Warrants. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date a Common
Share Purchase Warrant (“Representative’s Warrant”) for the purchase of an aggregate of 50,750, Common
Shares (which is equal to an aggregate of 5% of the Firm Shares sold in the Offering), for an aggregate purchase price of $100.00.
The Representative’s Warrant Agreement shall be in the form attached hereto as Exhibit A (the “Representative’s
Warrant Agreement”). The Representative’s Warrant shall be exercisable, in whole or in part, commencing on a date
which is one (1) year after the date of this Agreement and expiring on the five-year anniversary of the date of this Agreement
at an initial exercise price per Common Share of $5.4875, which is equal to 125% of the public offering price of each Firm Share.
The Representative’s Warrant and the Common Shares issuable upon exercise thereof are sometimes referred to collectively
as the “Representative’s Securities.” The Representative understands and agrees that there are significant
restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Warrant and the underlying Common Shares
during the one hundred and eighty (180) days after the date of this Agreement and by its acceptance thereof agrees that it will
not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant Agreement, or any portion thereof, or be the
subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition
of such securities for a period of one hundred eighty (180) days following the date of this Agreement to anyone other than (i)
an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative
or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.
1.3.2 Delivery.
Delivery of the Representative’s Warrant shall be made on the Closing Date and shall be issued in the name or names and in
such authorized denominations as the Representative may request.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined
below), as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (File No. 333-203678), including any related prospectus or prospectuses, for the registration
under the Securities Act of 1933, as amended (the “Securities Act”)of up to $30 million worth of the Company’s
securities (including common shares, preferred shares, debt securities, warrants and units), which registration statement was prepared
by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations
of the Commission under the Securities Act (the “Securities Act Regulations”) and contains and will contain
all material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations.
Except as the context may otherwise require, such registration statement on file with the Commission at any given time, including
any amendments thereto to such time, exhibits and schedules thereto at such time, documents filed as a part thereof or incorporated
pursuant to Item 12 of Form S-3 under the Securities Act at such time and the documents and information otherwise deemed to be
a part thereof or included therein pursuant to Rule 430B of the Securities Act Regulations (the “Rule 430B Information”)
or otherwise pursuant to the Securities Act Regulations at such time, is referred to herein as the “Registration Statement.”
The Registration Statement at the time it originally became effective is referred to herein as the “Initial Registration
Statement.” If the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations,
then after such filing, the term “Registration Statement” shall include such registration statement filed pursuant
to Rule 462(b). The Registration Statement was declared effective by the Commission on May 18, 2015.
The prospectus in the form in which it
was filed with the Commission in connection with the Initial Registration Statement is herein called the “Base Prospectus.”
Each preliminary prospectus supplement to the Base Prospectus (including the Base Prospectus as so supplemented) that described
the Securities and the Offering and omitted the Rule 430B Information and that was used prior to the filing of the final prospectus
supplement referred to in the following paragraph is herein called a “Preliminary Prospectus.”
Promptly after the execution and delivery
of this Agreement, the Company will prepare and file with the Commission a final prospectus supplement to the Base Prospectus relating
to the Securities and the Offering in accordance with the provisions of Rule 430B and Rule 424(b) of the Securities Act Regulations.
Such final prospectus supplement (including the Base Prospectus as so supplemented), in the form filed with the Commission pursuant
to Rule 424(b) under the Securities Act is herein called the “Prospectus.” Any reference herein to the Base
Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such prospectus.
“Applicable Time” means
4:00 p.m., Eastern time, on the date of this Agreement.
“Disclosure
Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Preliminary
Prospectus dated May 18, 2015 and the information included on Schedule 2-A hereto, all considered together.
“Issuer Free Writing Prospectus”
means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations (“Rule
433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the Securities
Act Regulations) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a
“road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be
filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains
a description of the Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g).
“Issuer General Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors
(other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona Fide Electronic Road
Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer Limited Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
2.1.2 Pursuant
to the Exchange Act. The Common Shares are registered pursuant to Section 12(b) under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). The Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Shares under the Exchange Act, nor has the Company received any notification that the
Commission is contemplating terminating such registration.
2.2 Stock
Exchange Listing. The Common Shares are listed on The NASDAQ Capital Market (the “NasdaqCM Common Shares”),
and the Company has taken no action designed to, or likely to have the effect of, delisting the Common Shares from the NasdaqCM,
nor has the Company received any notification that the NasdaqCM is contemplating terminating such listing, except as described
in the Registration Statement, the Disclosure Package and the Prospectus.
2.3 No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any
order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
2.4 Disclosures
in Registration Statement.
2.4.1 Compliance
with Securities Act and 10b-5 Representation.
(i) Each
of the Registration Statement and any post-effective amendment thereto, at the time it became effective (including each deemed
effective date with respect to the Underwriters pursuant to Rule 430B or otherwise under the Securities Act), complied in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. The conditions for use of Form S-3 set
forth in the General Instructions thereto, including but not limited to, General Instruction I.B.6 and other conditions related
to the offer and sale of the Section have been satisfied. Each Preliminary Prospectus, including the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus, at the time
each was filed or will be filed with the Commission, complied or will comply in all material respects with the requirements of
the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection
with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits
or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(iii) The
Disclosure Package, as of the Applicable Time, as of the date of this Agreement, at the Closing Date or at any Option Closing Date
(if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each
Issuer Limited Use Free Writing Prospectus hereto does not conflict with the information contained in the Registration Statement,
the Preliminary Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and
taken together with the Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements
omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by
the Representative or by Representative’s Counsel expressly for use in the Registration Statement, the Disclosure Package,
the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and
agree that such information provided by or on behalf of any Underwriter consists solely of the following disclosure: the names
of the Underwriters contained on the cover page of the Pricing Prospectus and Prospectus and the disclosure contained in the “Underwriting”
section of the Prospectus ; the table of Underwriters under the first paragraph, the concession figure appearing in the seventh
paragraph, the information contained under the sub heading “Electronic Offer, Sale and Distribution of Securities,”
the information contained under the sub heading “Stabilization,” and the information contained under the sub heading
“Passive market making” (collectively, the “Underwriters’ Information”); and
(iv) Neither
the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of
any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or
will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to the Underwriters’ Information.
2.4.2 Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Disclosure Package and the Prospectus
conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required
by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Disclosure Package
and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described
or filed. Each agreement or other instrument (however characterized or described) to which the Company or the Subsidiary 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 Disclosure Package
and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company,
is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge,
the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and
neither the Company nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s
knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder.
To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments
will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental
or regulatory agency, body or court, domestic or foreign, having jurisdiction over the Company or any of its assets or business
(each, a “Governmental Entity”), including, without limitation, those relating to environmental laws and regulations.
2.4.3 Prior
Securities Transactions. Since January 1, 2012, no securities of the Company have been sold by the Company or by or on behalf
of, or for the benefit of, any person or persons controlling, controlled by or under common control with the Company, except as
disclosed in the Registration Statement, the Disclosure Package and the Prospectus.
2.4.4 Regulations.
The disclosures in the Registration Statement, the Disclosure Package and the Prospectus concerning the effects of federal, state,
local and all foreign laws, rules and regulations relating to the Company’s business as currently conducted or contemplated
are correct and complete in all material respects and no other such laws, rules or regulations are required to be disclosed in
the Registration Statement, the Disclosure Package and the Prospectus which are not so disclosed.
2.4.5
No Other Distribution of Offering Materials. The Company has not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than any Preliminary Prospectus, the Disclosure Package, the Prospectus
and other materials, if any, permitted under the Securities Act and consistent with Section 3.2 below. The Company is not an “ineligible
issuer” in connection with the Offering pursuant to Rules 164, 405 and 433 under the Securities Act. The Company will file
with the Commission all Issuer Free Writing Prospectuses (other than a “road show” as defined in Rule 433(d) of the
Securities Act Regulations, if any) in the time and manner required under Rule 433(d) of the Securities Act Regulations.
2.5 Changes
After Dates in Registration Statement.
2.5.1 No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Disclosure
Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change
in the financial position or results of operations of the Company and the Subsidiary, nor any change or development that, singularly
or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets, properties or prospects of the Company and the Subsidiary taken
as a whole (a “Material Adverse Change”); (ii) there have been no material transactions entered into by
the Company or the Subsidiary, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of
the Company or the Subsidiary has resigned from any position with the Company or the Subsidiary.
2.5.2 Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the
Registration Statement, the Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock.
2.6 Disclosures
in Commission Filings. Since January 1, 2012, (i) none of the Company’s filings with the Commission contained any untrue
statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and (ii) the Company has made all filings with the Commission
required under the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the “Exchange
Act Regulations”).
2.7 Independent
Accountants. To the knowledge of the Company, Hoberman & Lesser, LLP (the “Auditor”), whose report is
filed with the Commission as part of the Registration Statement, the Disclosure Package and the Prospectus is an independent registered
public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight
Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the
Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of
the Exchange Act.
2.8 Financial
Statements, etc. The financial statements, including the notes thereto and supporting schedules included in the Registration
Statement, the Disclosure Package and the Prospectus, fairly present the financial position and the results of operations of the
Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with
U.S. generally accepted accounting principles (“GAAP”), consistently applied throughout the periods involved
(provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material
in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the Registration
Statement, the Disclosure Package and the Prospectus present fairly the information required to be stated therein. Except as included
therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Disclosure
Package or the Prospectus under the Securities Act or the Securities Act Regulations. The as adjusted financial information and
the related notes, if any, included in the Registration Statement, the Disclosure Package and the Prospectus have been properly
compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and
present fairly the information shown therein, and the assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained
in the Registration Statement, the Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and
Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Disclosure Package
and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations),
and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future
effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, (a) the Company has not incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid
any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the
capital stock of the Company, (d) other than in the ordinary course of business and consistent with the Company’s prior policies,
made any grants under any stock compensation plan, and (e) there has not been any material adverse change in the Company’s
long-term or short-term debt.
2.9 Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Disclosure Package
and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated
in the Registration Statement, the Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted
stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Disclosure
Package and the Prospectus, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will be no stock
options, warrants, or other rights to purchase or otherwise acquire any authorized but unissued Common Shares or any security convertible
or exercisable into Common Shares, or any contracts or commitments to issue or sell Common Shares or any such options, warrants,
rights or convertible securities.
2.10 Valid
Issuance of Securities, etc.
2.10.1 Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no contractual rights
of rescission or the ability to force the Company to repurchase such securities with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights, rights
of first refusal or rights of participation of any holders of any security of the Company or similar contractual rights granted
by the Company. The authorized Common Shares conform in all material respects to all statements relating thereto contained in the
Registration Statement, the Disclosure Package and the Prospectus. The offers and sales of the outstanding Common Shares, options,
warrants and other rights to purchase or exchange such securities for Common Shares were at all relevant times either registered
under the Securities Act and the applicable state securities or “blue sky” laws or exempt from such registration requirements.
The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, as described in the Registration Statement, Disclosure Package and the Prospectus, accurately and fairly
present, in all material respects, the information required to be shown with respect to such plans, arrangements, options and rights.
2.10.2 Securities
Sold Pursuant to this Agreement. The Public Securities and Representative’s Securities have been duly authorized for
issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are
not and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative’s
Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public
Securities and Representative’s Securities has been duly and validly taken. The Public Securities and Representative’s
Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the
Disclosure Package and the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the
Representative’s Warrant Agreement has been duly and validly taken; the Common Shares issuable upon exercise of the Representative’s
Warrant have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and, when
paid for and issued in accordance with the Representative’s Warrant and the Representative’s Warrant Agreement, such
underlying Common Shares will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject
to personal liability by reason of being such holders; and such Common Shares are not and will not be subject to the preemptive
rights of any holders of any security of the Company or similar contractual rights granted by the Company.
2.11 Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Disclosure Package and the Prospectus, no holders
of any securities of the Company or any options, warrants, rights or other securities exercisable for or convertible or exchangeable
into securities of the Company have the right to require the Company to register any such securities of the Company under the Securities
Act or to include any such securities in the Registration Statement or any other registration statement to be filed by the Company.
2.12 Validity
and Binding Effect of Agreements. The execution, delivery and performance of this Agreement and the Representative’s
Warrant Agreement have been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the
valid and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except:
(i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal
and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief
may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
2.13 No
Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Representative’s Warrant
Agreement and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and
the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the
lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute
a material default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Subsidiary pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement or any other agreement or instrument to which the Company or the Subsidiary is a party or as to which any property of
the Company or the Subsidiary is a party; (ii) result in any violation of the provisions of the Company’s Certificate
of Incorporation (as the same have been amended or restated from time to time, the “Charter”) or the by-laws
of the Company or the Subsidiary (as the same may be amended or restated from time to time); or (iii) violate any existing
applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof, except such as would
not result in a Material Adverse Change.
2.14 No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company or the Subsidiary
is a party or by which the Company or the Subsidiary may be bound or to which any of the properties or assets of the Company or
the Subsidiary is subject. Neither the Company nor the Subsidiary is (i) in violation of any term or provision of its Charter or
by-laws, or (ii) in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental
Entity, except in the case of clause (ii), such as would not result in a Material Adverse Change.
2.15 Corporate
Power; Licenses; Consents.
2.15.1 Conduct
of Business. Except as described in the Registration Statement, the Disclosure Package and the Prospectus or where the failure
to do so would not result in a Material Adverse Change, the Company has all requisite corporate power and authority, and has all
necessary consents, authorizations, approvals, orders, licenses, certificates, qualifications, registrations and permits (collectively,
the “Authorizations”) of and from all Governmental Entities that it needs to conduct its business as described
in the Registration Statement, the Disclosure Package and the Prospectus.
2.15.2 Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all Authorizations required in connection therewith have been obtained. No Authorization of, and no
filing with, Governmental Entity is required for the valid issuance, sale and delivery of the Securities and the consummation of
the transactions and agreements contemplated by this Agreement and the Representative’s Warrant Agreement and as contemplated
by the Registration Statement, the Disclosure Package and the Prospectus, except with respect to applicable state securities laws
and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.16 D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors, officers and principal shareholders immediately prior to the Offering (the
“Insiders”) as supplemented by all information concerning the Company’s directors, officers and principal
shareholders as described in the Registration Statement, the Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement
(as defined in Section 2.26 below), provided to the Underwriters is true and correct in all material respects and the Company has
not become aware of any information which would cause the information disclosed in the Questionnaires to become inaccurate and
incorrect in any material respect.
2.17 Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or the Subsidiary or, to
the Company’s knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the
Disclosure Package and the Prospectus or in connection with the Company’s listing application for the listing of the Public
Securities on the NasdaqCM which is required to be disclosed.
2.18 Good
Standing. Each of the Company and the Subsidiary has been duly organized and is validly existing as a corporation and is in
good standing under the laws of its jurisdiction of incorporation, and is duly qualified to do business and is in good standing
in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification,
except where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material
Adverse Change.
2.19 Insurance.
Each of the Company and the Subsidiary carries or is entitled to the benefits of insurance (including, without limitation, as to
directors and officers insurance coverage), with reputable insurers, in such amounts and covering such risks which the Company
believes are adequate, and all such insurance is in full force and effect. The Company and the Subsidiary will be able (i) to renew
their existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct their business as now conducted and at a cost that would not result in a Material
Adverse Change.
2.20 Transactions
Affecting Disclosure to FINRA.
2.20.1 Finder’s
Fees. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company,
the Subsidiary or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements
or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.20.2 Payments
Within Twelve (12) Months. Except as described in the Registration Statement, the Disclosure Package and the Prospectus and
except for payments made to the Representative as underwriter in connection with the Company’s public offering consummated
in July 2014, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person,
as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing
to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity
that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the initial
filing of the Registration Statement, other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.20.3 Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.20.4 FINRA
Affiliation. There is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class of the Company’s
securities or (iii) except as disclosed to Representative or Representative’s Counsel in writing, beneficial owner of the
Company’s unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of
the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined
in accordance with the rules and regulations of FINRA). Neither the Company nor any of its affiliates (within the meaning of FINRA’s
Conduct Rule 5121(f)(i)) directly or indirectly controls, is controlled by, or is under common control with, or is an associated
person (with the meaning of Article 1, Section 1(ee) of the By-Laws of FINRA) or, any member of FINRA.
2.20.5 Information.
All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete
in all material respects.
2.21 Foreign
Corrupt Practices Act. Neither the Company, the Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or the Subsidiary nor any other person acting on behalf of the Company or the Subsidiary,
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate
for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company
or the Subsidiary (or assist it in connection with any actual or proposed transaction) that (i) might subject the Company
or the Subsidiary to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given
in the past, might have had a Material Adverse Change or (iii) if not continued in the future, might adversely affect the
assets, business, operations or prospects of the Company or the Subsidiary. Each of the Company and the Subsidiary has taken reasonable
steps to ensure that its accounting controls and procedures are sufficient to cause the Company and the Subsidiary to comply in
all material respects with the Foreign Corrupt Practices Act of 1977, as amended.
2.22 Compliance
with OFAC. Neither the Company, the Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or the Subsidiary nor any other person acting on behalf of the Company or the Subsidiary, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”),
and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise
make available such proceeds to the subsidiary, joint venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.23 Money
Laundering Laws. To the Company’s knowledge, the operations of the Company and the Subsidiary are and have been conducted
at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively,
the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving
the Company or the Subsidiary with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
2.24 Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in either the Registration Statement, Disclosure Package or the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
2.25 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.26 Lock-Up
Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors
and each owner of at least 5% of the Company’s outstanding Common Shares (or securities convertible or exercisable into Common
Shares) (collectively, the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties to deliver
to the Representative an executed Lock-Up Agreement, in the form attached hereto as Exhibit B (the “Lock-Up
Agreement”), prior to the execution of this Agreement.
2.27 Subsidiary.
The Company owns all of the capital stock and/or the equity interests in DAG Funding Solutions, Inc., a New York corporation (the
“Subsidiary”). Other than a nominal interest (i.e., less than 1%) in Dune Medical Devices LTD, the Company has
no other interest, nominal or beneficial, direct or indirect, in any other corporation, partnership, limited liability company,
joint venture or other business entity. All of the outstanding shares of capital stock and/or equity interests of the Subsidiary
have been duly authorized and validly issued, are fully paid and non-assessable and, except to the extent set forth in the Registration
Statement or the Prospectus, are owned by the Company directly or indirectly through one or more wholly-owned subsidiaries, free
and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third
party. Except as disclosed in the Registration Statement or the Prospectus, no director, officer, or key employee of the Company
named in the Prospectus holds any direct equity, debt or other pecuniary interest in the Subsidiary or, to the best of the Company’s
knowledge, any individual or entity with whom the Company or the Subsidiary does business or is in privity of contract with.
2.28 Related
Party Transactions.
2.28.1 Business
Relationships. There are no business relationships or related party transactions involving the Company or the Subsidiary or
any other person required to be described in the Registration Statement, the Disclosure Package and the Prospectus that have not
been described as required.
2.28.2 No
Relationships with Customers and Suppliers. No relationship, direct or indirect, exists between or among the Company or the
Subsidiary on the one hand, and the directors, officers, 5% or greater shareholders, customers or suppliers of the Company or the
Subsidiary or any of the Company’s affiliates on the other hand, which is required to be described in the Disclosure Package
and the Prospectus or a document incorporated by reference therein and which is not so described.
2.28.3 No
Unconsolidated Entities. There are no transactions, arrangements or other relationships between and/or among the Company or
the Subsidiary, any of the Company’s affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated
entity, including, but not limited to, any structure finance, special purpose or limited purpose entity that could reasonably be
expected to materially affect the Company’s liquidity or the availability of or requirements for its capital resources required
to be described in the Disclosure Package and the Prospectus or a document incorporated by reference therein which have not been
described as required.
2.28.4 No
Loans or Advances to Affiliates. There are no outstanding loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors
of the Company or any of their respective family members, except as disclosed in the Registration Statement, the Disclosure Package
and the Prospectus. All transactions by the Company with its officers or directors or control persons of the Company have been
duly approved by the Board of Directors of the Company.
2.29 Board
of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Prospectus
captioned “Management.” The qualifications of the persons serving as board members and the overall composition of
the board comply with the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the “Exchange
Act Regulations”), the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley
Act”) applicable to the Company and the listing rules of The NASDAQ Stock Market LLC. At least one member of the Audit
Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,” as such term
is defined under Regulation S-K and the listing rules of The NASDAQ Stock Market LLC. In addition, at least a majority of the
persons serving on the Board of Directors qualify as “independent,” as defined under the listing rules of The NASDAQ
Stock Market LLC.
2.30 Sarbanes-Oxley
Compliance.
2.30.1 Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that comply with Rule 13a-15
or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information
concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure documents.
2.30.2 Compliance.
The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions
of the Sarbanes-Oxley Act.
2.31 Accounting
Controls. The Company maintain systems of “internal control over financial reporting” (as defined under Rules
13a-15 and 15d-15 under the Exchange Act Regulations ) that complies in all material respects with the requirements of the Exchange
Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers,
or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement,
the Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls. The Company’s
auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies
and material weaknesses in the design or operation of internal controls over financial reporting which are known to the Company’s
management and that have adversely affected or are reasonably likely to adversely affect the Company’ ability to record,
process, summarize and report financial information; and (ii) any fraud known to the Company’s management, whether or not
material, that involves management or other employees who have a significant role in the Company’s internal controls over
financial reporting.
2.32 No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Disclosure Package and the Prospectus, will not be, required to register
as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.33 No
Labor Disputes. No labor dispute with the employees of the Company or the Subsidiary exists or, to the knowledge of the Company
or the Subsidiary, is imminent. The Company is not aware that any key employee or significant group of employees of the Company
or the Subsidiary plans to terminate employment with the Company or the Subsidiary.
2.34 Intellectual
Property Rights. The Company owns or possesses or has valid rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets software,
databases, know-how, internet domain names, other unpatented and/or unpatentable proprietary confidential information systems,
processes or procedures and similar rights (“Intellectual Property Rights”) necessary for the conduct of the
business of the Company and the Subsidiary as currently carried on and as described in the Registration Statement, the Disclosure
Package and the Prospectus. The Intellectual Property licenses described in the Registration Statement, Disclosure Package and
the Prospectus are valid, binding upon and enforceable against the parties thereto in accordance with their respective terms.
To the knowledge of the Company, no action or use by the Company or the Subsidiary necessary for the conduct of its business as
currently carried on and as described in the Registration Statement, the Disclosure Package and the Prospectus will involve or
give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither the Company
nor the Subsidiary has received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property
Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse
Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of
the Intellectual Property Rights owned by the Company or the Subsidiary; (B) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging the rights of the Company or the Subsidiary in or to any such
Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim,
that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably be expected to result
in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company,
the Intellectual Property Rights licensed to the Company or the Subsidiary have not been adjudged by a court of competent jurisdiction
invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company
is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together
with any other claims in this Section 2.33, reasonably be expected to result in a Material Adverse Change; (D) there is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company or the Subsidiary
infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, neither
the Company nor the Subsidiary has received any written notice of such claim and the Company is unaware of any other facts which
would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims
in this Section 2.34, reasonably be expected to result in a Material Adverse Change; and (E) to the Company’s knowledge,
no employee of the Company or the Subsidiary is in or has ever been in violation in any material respect of any term of any employment
contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to
such employee’s employment with the Company or the Subsidiary, or actions undertaken by the employee while employed with
the Company or the Subsidiary and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse
Change. To the Company’s knowledge, all material technical information developed by and belonging to the Company or the
Subsidiary which has not been patented has been kept confidential. Neither the Company nor the Subsidiary is a party to or bound
by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are
required to be set forth in the Registration Statement, the Disclosure Package and the Prospectus and are not described therein.
The Registration Statement, the Disclosure Package and the Prospectus contain in all material respects the same description of
the matters set forth in the preceding sentence. None of the technology employed by the Company or the Subsidiary has been obtained
or is being used by the Company in violation of any contractual obligation binding on the Company or the Subsidiary or, to the
Company’s knowledge, any of their officers, directors or employees, or otherwise in violation of the rights of any persons.
2.35 Taxes.
Each of the Company and the Subsidiary has filed all returns (as hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and the Subsidiary
has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed
against the Company or the Subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed with or
as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods
to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no
issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted
as due from the Company or the Subsidiary, and (ii) no waivers of statutes of limitation with respect to the returns or collection
of taxes have been given by or requested from the Company or the Subsidiary. There are no tax liens against the assets, properties
or business of the Company or the Subsidiary. The term “taxes” means all federal, state, local, foreign and
other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service,
service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions
to tax or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports,
statements and other documents required to be filed in respect to taxes.
2.36 Compliance
with Environmental Laws. Except as described in the Registration Statement, the Disclosure Package and the Prospectus and
except as would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Change, (i) neither the
Company nor the Subsidiary is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental
Laws ), (ii) each of the Company and the Subsidiary has all material permits, authorizations and approvals required under
any applicable Environmental Laws and is in compliance with their requirements, (iii) there are no pending or, to the Company’s
knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or the Subsidiary
and (iv) to the Company’s knowledge, there are no events, conditions, incidents or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental
body or agency, against or affecting the Company or the Subsidiary relating to Hazardous Materials or any Environmental Laws.
2.37 ERISA
Compliance. The Company, the Subsidiary and any “employee benefit plan” (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material
respects with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”) of which the Company is a member. No “reportable event”
(as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or
maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have
any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates
has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification. The execution of this Agreement, or consummation of the Offering does
not constitute a triggering event under any employee benefit plan or any other employment contract, whether or not legally enforceable,
which (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (of severance
pay or otherwise), acceleration, increase in vesting, or increase in benefits to any current or former participant, employee or
director of the Company other than an event that is not material to the financial condition or business of the Company and the
Subsidiary taken as a whole.
2.38 Compliance
with Laws. Each of the Company and the Subsidiary: (A) is and at all times has been in material compliance with all statutes,
rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution,
marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed
by the Company or the Subsidiary (“Applicable Laws”), except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Change; (B) possesses all material Authorizations and such Authorizations are
valid and in full force and effect and are not in material violation of any term of any such Authorizations; (C) has not received
notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental
Entity or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations
and has no knowledge that any such governmental authority or third party is considering any such claim, litigation, arbitration,
action, suit, investigation or proceeding; (D) has not received notice that any Governmental Entity has taken, is taking or intends
to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such governmental authority
is considering such action; and (E) has filed, obtained, maintained or submitted all material reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and
that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were
complete and correct on the date filed (or were corrected or supplemented by a subsequent submission).
2.39
REIT Election and Qualification. The Company has been organized and operated in conformity with the requirements for qualification
and taxation as a real estate investment trust (a “REIT”) under the Code, beginning with its taxable year ending
December 31, 2104. The Company intends to make an election to be taxed as a REIT under the Code beginning with its taxable year
ending December 31, 2014, and intends to operate in a manner which would permit it to qualify as a REIT under the Code. The proposed
method of operation of the Company as described in the Registration Statement, the Disclosure Package and the Prospectus will enable
it to meet the requirements for qualification and taxation as a REIT under the Code. All statements regarding the Company’s
qualification and taxation as a REIT and descriptions of the Company’s organization and proposed method of operation (to
the extent they relate to the Company’s qualification as a REIT and purport to summarize applicable U.S. federal income tax
law or legal conclusions with respect thereto) set forth in the Registration Statement, the Disclosure Package and the Prospectus
are accurate in all material respects.
2.40 Smaller
Reporting Company. As of the time of the effective date of the Registration Statement and on the date of this Agreement,
the Company was a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act Regulations.
2.41 Industry
Data. The statistical and market-related data included in each of the Registration Statement, the Disclosure Package
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and
accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.42 Margin
Securities. Neither the Company nor the Subsidiary owns any “margin securities” as that term is defined in Regulation
U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds
of the Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the Common Shares to be considered a “purpose credit” within the meanings of Regulation
T, U or X of the Federal Reserve Board.
2.43 Integration.
Neither the Company nor the Subsidiary or affiliates, nor any person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the
Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration
of any such securities under the Securities Act.
2.44 Title
to Real and Personal Property. Each of the Company and the Subsidiary has good and marketable title in fee simple to, or has
valid rights to lease or otherwise use, all items of real or personal property that are material to the business of the Company
and the Subsidiary taken as a whole, free and clear of all liens, encumbrances, security interests, claims and defects that do
not, singularly or in the aggregate, result in a Material Adverse Change and do not interfere with the use made of such property
by the Company or the Subsidiary; and all of the leases and subleases material to the business of the Company and the Subsidiary
taken as a whole, and under which the Company or the Subsidiary holds properties described in the Registration Statement, the Disclosure
Package and the Prospectus, are, to the Company’s knowledge in full force and effect, and neither the Company nor the Subsidiary
has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company
or the Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or
the Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease, which would result
in a Material Adverse Change.
2.45 Confidentiality
and Non-Competitions. To the Company’s knowledge, no director, officer, key employee or consultant of the Company or
the Subsidiary is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with
any employer or prior employer that could materially affect his ability to be and act in
his respective capacity of the Company or the Subsidiary or be expected to result in a Material Adverse Change.
2.46 Corporate
Records. The minute books of the Company and the Subsidiary have been made available to the Representative and the Representative
Counsel, and such books (i) contain a summary of all meetings and actions of the board of directors (including each board committee)
and shareholders of the Company, and (ii) reflect all material transactions referred to in such minutes.
2.47 Electronic
Road Show. The Company has made available a Bona Fide Electric Road Show in compliance with Rule 433(d)(8)(ii) of the Securities
Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities Act Regulations)
is required in connection with the Offering.
2.48 Diligence
Materials. The Company has provided to the Representative and the Representative Counsel all materials response to the diligence
request submitted to the Company or its counsel by the Representative.
3. Covenants
of the Company. The Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to
the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, Disclosure Package or Prospectus proposed
to be filed after the date of the Agreement and not file any such amendment, supplement or document to which the Representative
shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 424(b) and Rule 430B of the Securities Act Regulations,
and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement or any amendment or supplement to any Preliminary Prospectus, the Disclosure Package or the Prospectus shall
have been filed and when any post-effective amendment to the Registration Statement shall become effective; (ii) of the receipt
of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to any Preliminary Prospectus, the Disclosure Package or the Prospectus or for additional information;
(iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus, Disclosure Package or
the Prospectus, or of the suspension of the qualification of the Public Securities and Representative’s Securities for offering
or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination
pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement; and (v) if the Company
becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Public Securities
and Representative’s Securities. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations,
in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps
as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received
for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its
commercially reasonable efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued,
to obtain the lifting thereof at the earliest possible moment.
3.2.2 Continued
Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange
Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and
in the Registration Statement, the Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Public
Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the reasonable opinion of Representative Counsel or counsel for
the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; (ii) amend or supplement the Disclosure Package
or the Prospectus in order that the Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend
or supplement the Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities
Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare
any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the
Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing
or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such
amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative
or Representative Counsel shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant
to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company will give the Representative
notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in
full or expiation of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with copies
of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any
such document to which the Representative Counsel shall reasonably object.
3.2.3 Exchange
Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use commercially reasonable
efforts to maintain the registration of the Common Shares under the Exchange Act. The Company shall not deregister the Common Shares
under the Exchange Act without the prior written consent of the Representative, which consent shall not be unreasonably withheld.
3.2.4 Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall
not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission
or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General
Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i)
that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such
free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto,
including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of
an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the
Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and Representative Counsel, without charge, signed copies of the Registration Statement as originally filed
and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed
and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement, Preliminary
Prospectus, the Disclosure Package and each amendment thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each
Underwriter, without charge, as many copies of each Preliminary Prospectus and Disclosure Package as such Underwriter reasonably
requests, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company
will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Public Securities is (or,
but for the exception afforded by Rule 172 of the Securities Act Regulations, would be) required to be delivered under the Securities
Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.5 Effectiveness
and Events Requiring Notice to the Representative. The Company shall use commercially reasonable efforts to cause the Registration
Statement to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify
the Representative immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement
and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening,
of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension
of the qualification of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement
to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information
from the Commission; and (vi) of the happening of any event during the period described in this Section 3.5 that, in the
reasonable judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Disclosure
Package or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading, or (b) in the Disclosure
Package or the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at
any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.
3.6 Review
of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense, shall
cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial
statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7 Listing.
The Company shall use commercially reasonable efforts to maintain the listing of the Common Shares (including the Public Securities)
on the NasdaqCM for at least two (2) years from the date of this Agreement.
3.8 Financial
Public Relations Firm. The Company has retained Sabr Capital, a financial public relations, which firm is reasonably acceptable
to the Representative, and shall retain such firm or another firm reasonably acceptable to the Representative for a period of not
less than one (1) year after the date of the Agreement.
3.9 Reports
to the Representative.
3.9.1 Periodic
Reports. For a period of three (3) years after the date of this Agreement, at the Representative’s request, the Company
shall furnish to the Representative copies of such financial statements and other periodic and special reports as the Company from
time to time furnishes generally to holders of any class of its securities and also promptly furnish to the Representative: (i)
a copy of each periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange
Act Regulations; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs
which was released by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration
statement filed by the Company under the Securities Act; (v) a copy of each report or other communication furnished to shareholders;
and (vi) additional documents and information with respect to the Company and the affairs of the Company as the Representative
may from time to time reasonably request provided the Representative shall sign, if requested by the Company, a Regulation FD compliant
confidentiality agreement which is reasonably acceptable to the Representative and Representative Counsel in connection with the
Representative’s receipt of such information. Documents filed with the Commission pursuant to its EDGAR system or otherwise
publicly filed or made available shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1.
3.9.2 Transfer
Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer
agent and registrar acceptable to the Representative (the “Transfer Agent”). American Stock Transfer &
Trust Company, LLC is acceptable to the Representative to act as Transfer Agent for the Common Shares.
3.9.3 Trading
Reports. For a period of three (3) years after the date of this Agreement, the Company shall provide to the Representative,
at the Company’s expense, such reports published by NasdaqCM relating to price trading of the Public Securities, as the Representative
shall reasonably request; provided that such provision shall not prevent a sale, merger or similar transaction involving the Company.
3.10 Payment
of Expenses
3.10.1 General
Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date,
if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company
under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration
of Public Securities to be issued and sold in the Offering with the Commission; (b) all filing fees associated with the review
of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Public Securities on the NasdaqCM; (d) all
fees, expenses and disbursements relating to background checks of the Company’s officers and directors in an amount not to
exceed $5,000 per individual or $20,000 in the aggregate; (e) all fees, expenses and disbursements relating to the registration
or qualification of the Public Securities under the “blue sky” securities laws of such states and other jurisdictions
as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable
fees and disbursements of “blue sky” counsel, it being agreed that such fees and expenses will be limited to $1,000
if the Common Shares are listed on any of the Nasdaq Global Select Market, Nasdaq Global Market, Nasdaq Capital Market or the NYSE/AMEX,
which amount shall be payable at the Closing; (f) all fees, expenses and disbursements relating to the registration, qualification
or exemption of the Public Securities under the securities laws of such foreign jurisdictions and the Representative may reasonably
designate; (g) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting
Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’
Questionnaire and Power of Attorney), Registration Statements, Preliminary Prospectuses, Disclosure Packages, Prospectuses and
all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably
deem necessary; (h) the costs and expenses of the public relations firm referred to in Section 3.8 hereof; (i) the costs of preparing,
printing and delivering certificates representing the Public Securities; (j) fees and expenses of the Transfer Agent for the Common
Shares; (k) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters;
(l) the costs (up to $5,000) associated with digital copies of the public offering materials as well as commemorative mementos
and lucite tombstones, each of which the Company or its designee will provide, including to the Representative, within a reasonable
time after the Closing in such quantities as the Representative may reasonably request; (m) the fees and expenses of the Company’s
accountants; (n) the fees and expenses of the Company’s legal counsel and other agents and representatives; (o) the fees
and expenses of the Underwriter’s legal counsel not to exceed $50,000; (p) the $25,000 cost associated with the Underwriters’
use of Ipreo’s book building, prospectus tracking and compliance software for the Offering; and (q) up to $20,000 of the
Underwriters’ actual accountable “road show” expenses for the offering. The Representative may deduct from the
net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth
herein to be paid by the Company to the Underwriters, less the Advance (as such term is defined in Section 8.3 hereof); provided,
however, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section
8.3 hereof.
3.10.2 Non-accountable
Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date
it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense
allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Shares.
3.11 Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Disclosure Package
and the Prospectus.
3.12 Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an earnings
statement (which need not be certified by an independent registered public accounting firm unless required by the Securities Act
or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative)
has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Public Securities.
3.14 Internal
Controls. The Company shall use commercially reasonable efforts to maintain a system of internal accounting controls sufficient
to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance
with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
3.15 Accountants.
As of the date of this Agreement, the Company shall retain an independent registered public accounting firm, as required by the
Securities Act and the Regulations and the Public Company Accounting Oversight Board, reasonably acceptable to the Representative,
and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period of
at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor is acceptable to the
Representative.
3.16 FINRA.
For a period of 90 days from the later of the Closing Date or the Option Closing Date, the Company shall advise the Representative
(who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii)
any beneficial owner of 5% or more of any class of the Company’s securities or (iii) any beneficial owner of the Company’s
unregistered equity securities which were acquired during the 180 days immediately preceding the filing of the Registration Statement
is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with
the rules and regulations of FINRA).
3.17 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in
a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this Agreement.
3.18 Company
Lock-Up Agreements.
3.18.1 Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, during the period commencing on the Closing Date and ending on the three (3) month
anniversary thereof (the “Lock-Up Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable
or exchangeable for shares of capital stock of the Company; (ii) file or cause to be filed any registration statement with the
Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable
or exchangeable for shares of capital stock of the Company; or (iii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction
described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock of the Company or such other
securities, in cash or otherwise.
The restrictions contained
in this Section 3.18.1 shall not apply to (i) the Public Securities to be sold hereunder, (ii) the issuance by the Company of Common
Shares upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date hereof, which is
disclosed in the Registration Statement, Disclosure Package and Prospectus, and (iii) the issuance by the Company of stock options
or shares of capital stock of the Company under any equity compensation plan of the Company. In the event the Company files a registration
statement on Form S-8 prior to the expiration of the Lock-Up Period, the Company shall cause each holder of Common Shares, options
or other equity awards which shall be covered by such registration statement to execute a Lock-Up Agreement.
Notwithstanding the foregoing,
if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event
relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release
earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last
day of the Lock-Up Period, the restrictions imposed by this Section 3.18.1 shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable,
unless the Representative waives, in writing, such extension.
3.18.2 Restriction
on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and
any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of nine months
after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer
to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for shares of capital stock of the Company. The Company is not a party,
and is not subject to any “at the market” or continuous offering transactions described in this Section 3.18.2.
3.19 Release
of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth
in the Lock-Up Agreements described in Section 2.25 hereof for an officer or director of the Company and provide the Company with
notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver,
the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C
hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20 Blue
Sky Qualifications. The Company shall use commercially reasonable efforts, in cooperation with the Underwriters, if necessary,
to qualify the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to
complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
3.21 Reporting
Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations.
3.22 Press
Releases. Prior to the Closing Date and any Option Closing Date, the Company shall not issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the Representative is notified), without the prior written consent
of the Representative, which consent shall not be unreasonably withheld, unless in the reasonable judgment of the Company and its
counsel, and after notification to the Representative, such press release or communication is required by law.
3.23 Sarbanes-Oxley.
The Company shall use commercially reasonable efforts to comply with all applicable provisions of the Sarbanes-Oxley Act in effect
from time to time.
3.24 REIT
Qualification. The Company will use its best reasonable efforts to meet the requirements for qualification and taxation as
a REIT under the Code for its taxable year ending December 31, 2014 and future taxable years unless the Board of Directors of the
Company determines that it is no longer in the best interests of the Company to continue to qualify as a REIT.
3.25 IRS
Forms. The Company shall deliver to each Underwriter (or its agent), prior to or at the Closing Date, a properly completed
and executed Internal Revenue Service (“IRS”) Form W-9 or an IRS Form W-8, as appropriate, together with all
required attachments to such form.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided
herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof
and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the
following conditions:
4.1 Regulatory
Matters.
4.1.1 Absence
of Certain Commission Actions; Required Filings. At each of the Closing Date and any Option Closing Date, no stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment thereto shall have been issued under the Securities
Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus shall have been issued and no proceedings
for any of those purposes shall have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission.
The Company has complied with each request (if any) from the Commission for additional information. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b)
under the Securities Act Regulations (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information
shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430B under the
Securities Act Regulations.
4.1.2 FINRA
Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount
of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3 NasdaqCM
Stock Market Clearance. On the Closing Date, the Firm Shares and the Additional Shares shall have been approved for listing
on the NasdaqCM.
4.2 Company
Counsel Matters.
4.2.1 Closing
Date Opinion of Counsel to the Company. On the Closing Date, the Representative shall have received the favorable opinion of
Morse, Zelnick, Rose & Lander, LLP, and a written statement providing certain “10b-5” negative assurances, dated
the Closing Date and addressed to the Representative, substantially in a form acceptable to the Representative.
4.2.2 Option
Closing Date Opinion of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable opinion
of counsel listed in Section 4.2.1, dated the Option Closing Date, addressed to the Representative and in form and substance reasonably
satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsel in its opinion
delivered on the Closing Date.
4.2.3 Opinion
of Representative Counsel. On the Closing Date and the Option Closing Date, if any, the Representative shall have received
from Representative counsel, such opinion or opinions and negative assurances statement, dated the Closing Date and any Option
Closing Date (if such date is other than the Closing Date) addressed to the Underwriters, with respect to such matters as the Representative
may reasonably require, and the Company shall have furnished to such counsel such documents as they request for enabling them to
pass upon such matters.
4.2.4 Reliance.
In rendering such opinion, such counsel may rely: (i) as to matters involving the application of laws other than the laws
of the United States and jurisdictions in which it is admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of
other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact,
to the extent it deems proper, on certificates or other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Representative Counsel if requested. The opinions referred
to in Sections 4.2.1 and 4.2.2 above and any related Option Closing Date opinion shall include a statement to the effect that it
may be relied upon by Representative Counsel in its opinion delivered to the Underwriters.
4.3 Comfort
Letters.
4.3.1 Cold
Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter containing statements
and information of the type customarily included in accountants’ comfort letters with respect to the financial statements
and certain financial information contained in the Registration Statement, the Disclosure Package and the Prospectus, addressed
to the Representative and in form and substance satisfactory in all respects to you and to Representative’s Counsel from
the Auditor, dated as of the date of this Agreement.
4.3.2 Bring-down
Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from
the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms
the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date
not more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing
Date (if such date is other than the Closing Date), of its Chief Executive Officer and its Chief Financial Officer stating that
(i) such officers have carefully examined the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus
and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and
as of the date of this Agreement and as of the Closing Date (or any Option Closing Date if such date is other than the Closing
Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein
or necessary to make the statements therein, and the Disclosure Package, as of the Applicable Time and as of the Closing Date (or
any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as
of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment
or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading, (ii) since the date of this Agreement, no event has occurred which should
have been set forth in a supplement or amendment to the Registration Statement, the Disclosure Package or the Prospectus, (iii)
to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date
is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct in all
material respects, except for such representations and warranties qualified by materiality or material adverse change which shall
be true and correct in all respects and the Company has complied in all material respect with all agreements and satisfied in all
material respects and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date
(or any Option Closing Date if such date is other than the Closing Date), and (iv) there has not been, subsequent to the date of
the most recent audited financial statements included or incorporated by reference in the Disclosure Package, any material adverse
change in the financial position or results of operations of the Company, or any change or development that, singularly or in the
aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition (financial
or otherwise), results of operations, business, assets or prospects of the Company, except as set forth in the Prospectus.
4.4.2 Secretary’s
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively,
certifying: (i) that each of the Charter and by-laws is true and complete, has not been modified and is in full force and
effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and
effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel
and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate
shall be attached to such certificate.
4.5 No
Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have
been no material adverse change or development involving a prospective material adverse change in the condition or prospects or
the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in
the Registration Statement and no change in the capital stock or debt of the Company, the Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any
Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement, the Disclosure Package and the Prospectus; (iii) no stop order shall have
been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; (iv)
no action shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any
Governmental Entity which would prevent the issuance or sale of the Public Securities or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company; (v) no injunction, restraining order or order of any
other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance or
sale of the Public Securities or materially and adversely affect or potentially materially and adversely affect the business or
operations of the Company; and (vi) the Registration Statement, the Disclosure Package and the Prospectus and any amendments
or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities
Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and
the Securities Act Regulations, and neither the Registration Statement, the Disclosure Package, the Prospectus nor any Issuer Free
Writing Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
4.6 No
Material Misstatement or Omission. The Underwriters shall not have discovered and disclosed to the Company on or prior to the
Closing Date and any Option Closing Date that the Registration Statement or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading,
or that the Registration Statement, Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any amendment or
supplement thereto contains an untrue statement of fact which, in the opinion of such counsel, is material or omits to state any
fact which, in the opinion of such counsel, is material and is necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
4.7 Corporate
Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of each of
this Agreement, the Representative’s Warrant Agreement, the Public Securities, the Registration Statement, the Disclosure
Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal matters relating to this Agreement,
the Representative’s Warrant Agreement and the transactions contemplated hereby and thereby shall be reasonably satisfactory
in all material respects to Representative Counsel and the Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
4.8 Delivery
of Agreements.
4.8.1 Date
of Agreement Deliveries. On or before the date of this Agreement, the Company shall have delivered to the Representative executed
copies of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.8.2 Closing
Date Deliveries. On the Closing Date, the Company shall have delivered to the Representative an executed copy of the Representative’s
Warrant Agreement.
4.9 Additional
Documents. At the Closing Date and at each Option Closing Date (if any), Representative Counsel shall have been furnished with
such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the
Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities
and the Representative’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative
and Representative Counsel.
5. Indemnification.
5.1 Indemnification
by the Company. The Company shall indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective
directors, officers, members, employees, representatives and agents and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified
Parties,” and each a “Underwriter Indemnified Party”) against any loss, claim, damage, expense or
liability whatsoever (or any action, investigation or proceeding in respect thereof), to which such Underwriter Indemnified Party
may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation
or proceeding arises out of or is based upon (A) any untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Disclosure Package, any Issuer Free Writing Prospectus, any “issuer information”
filed or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, any Registration Statement or the Prospectus,
or in any amendment or supplement thereto or document incorporated by reference therein, (B) the omission or alleged omission to
state in any Preliminary Prospectus, the Disclosure Package, any Issuer Free Writing Prospectus, any “issuer information”
filed or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, any Registration Statement or the Prospectus,
or in any amendment or supplement thereto or document incorporated by reference therein, a material fact required to be stated
therein or necessary to make the statements therein not misleading or (C) any breach of the representations and warranties of the
Company contained herein or any certificate delivered pursuant to this Agreement or failure of the Company to perform its obligations
hereunder or pursuant to any law, any act or failure to act, or any alleged act or failure to act, by the Underwriters in connection
with, or relating in any manner to, this Agreement, the Securities, Representative Securities or the Offering, and which is included
as part of or referred to in any loss, claim, damage, expense, liability, action, investigation or proceeding arising out of or
based upon matters covered by subclause (A), (B) or (C) above of this Section 5.1 (provided that the Company shall not be
liable in the case of any matter covered by this subclause (C) to the extent that it is determined in a final judgment by a court
of competent jurisdiction that such loss, claim, damage, expense or liability resulted directly from any such act or failure to
act undertaken or omitted to be taken by such Underwriter through its gross negligence or willful misconduct), and shall reimburse
the Underwriter Indemnified Party promptly upon demand for any legal fees or other expenses reasonably incurred by that Underwriter
Indemnified Party in connection with investigating, or preparing to defend, or defending against, or appearing as a third party
witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation
or proceeding, as such fees and expenses are incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement in,
or omission from any Preliminary Prospectus, the Disclosure Package, any Registration Statement or the Prospectus, or any such
amendment or supplement thereto, or any Issuer Free Writing Prospectus made in reliance upon and in conformity with written information
furnished to the Company through the Representative by or on behalf of any Underwriter specifically for use therein, which information
the parties hereto agree is limited to the Underwriters’ Information. This indemnity agreement is not exclusive and will
be in addition to any liability, which the Company might otherwise have and shall not limit any rights or remedies which may otherwise
be available at law or in equity to each Underwriter Indemnified Party.
5.2 Indemnification
by the Underwriter. Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, the Company’s
directors, its officers who signed the Registration Statement 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 (collectively the “Company Indemnified Parties”
and each a “Company Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever (or
any action, investigation or proceeding in respect thereof), to which such Company Indemnified Party may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation or proceeding arises
out of or is based upon (i) any untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the Securities
Act Regulations, any Registration Statement, the Disclosure Package, or the Prospectus, or in any amendment or supplement thereto,
or (ii) the omission to state in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer information”
filed or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, any Registration Statement, the Disclosure
Package, or the Prospectus, or in any amendment or supplement thereto, a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case
only to the extent that the untrue statement or omission was made in reliance upon and in conformity with written information furnished
to the Company through the Representative by or on behalf of any Underwriter specifically for use therein, which information the
parties hereto agree is limited to the Underwriters’ Information and shall reimburse the Company Indemnified Parties for
any legal or other expenses reasonably incurred by any Company Indemnified Party in connection with investigating or preparing
to defend or defending against or appearing as third party witness in connection with any such loss, claim, damage, liability,
action, investigation or proceeding, as such fees and expenses are incurred. Notwithstanding the provisions of this Section 5.2,
in no event shall any indemnity by an Underwriter under this Section 5.2 exceed the total discount and commission received by such
Underwriter in connection with the Offering.
5.3 Procedure.
Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 5, notify such indemnifying
party in writing of the commencement of that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this Section 5 except to the extent it has been materially
adversely prejudiced by such failure; and, provided, further, that the failure to notify an indemnifying party shall
not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 5. If any such action
shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense of such action with counsel reasonably satisfactory to the indemnified party (which counsel shall not, except
with the written consent of the indemnified party, be counsel to the indemnifying party). After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such action, except as provided herein, the indemnifying party
shall not be liable to the indemnified party under Section 5 for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense of such action other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense of such
action but the fees and expenses of such counsel (other than reasonable costs of investigation) shall be at the expense of such
indemnified party unless (i) the employment thereof has been specifically authorized in writing by the Company in the case of a
claim for indemnification under 5.1 or the Representative in the case of a claim for indemnification under Section 5.2, (ii) such
indemnified party shall have been advised by its counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party, or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the indemnified party within a reasonable period of time
after notice of the commencement of the action or the indemnifying party does not diligently defend the action after assumption
of the defense, in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of (or,
in the case of a failure to diligently defend the action after assumption of the defense, to continue to defend) such action on
behalf of such indemnified party and the indemnifying party shall be responsible for legal or other expenses subsequently incurred
by such indemnified party in connection with the defense of such action; provided, however, that the indemnifying
party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate
firm of attorneys at any time any such indemnified party (in addition to any local counsel), which firm shall be designated in
writing by the Representative if the indemnified party under this Section 5 is an Underwriter Indemnified Party or by
the Company if an indemnified party under this Section 5 is a Company Indemnified Party. Subject to this Section 5.3, the amount
payable by an indemnifying party under Section 5 shall include, but not be limited to, (x) reasonable legal fees and expenses
of counsel to the indemnified party and any other expenses in investigating, or preparing to defend or defending against, or appearing
as a third party witness in respect of, or otherwise incurred in connection with, any action, investigation, proceeding or claim,
and (y) all amounts paid in settlement of any of the foregoing. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of judgment with respect to any pending or threatened
action or any claim whatsoever, in respect of which indemnification or contribution could be sought under this Section 5 (whether
or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes
an unconditional release of each indemnified party in form and substance reasonably satisfactory to such indemnified party from
all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of any indemnified party. Subject to the provisions of the following sentence, no indemnifying
party shall be liable for settlement of any pending or threatened action or any claim whatsoever that is effected without its written
consent (which consent shall not be unreasonably withheld or delayed), but if settled with its written consent, if its consent
has been unreasonably withheld or delayed or if there be a judgment for the plaintiff in any such matter, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement
or judgment. In addition, if at any time an indemnified party shall have requested that an indemnifying party reimburse the indemnified
party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated herein effected without its written consent if (i) such settlement is entered into more than forty-five (45) days
after receipt by such indemnifying party of the request for reimbursement, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least thirty (30) days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
5.4 Contribution.
If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under
Section 5.1 or Section 5.2, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid, payable or otherwise incurred by such indemnified party as a result of such loss, claim, damage, expense or liability
(or any action, investigation or proceeding in respect thereof), as incurred, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and each of the Underwriters on the other hand from the Offering,
or (ii) if the allocation provided by clause (i) of this Section 5.4 is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) of this Section 5.4 but also the relative fault
of the Company on the one hand and the Underwriters on the other with respect to the statements, omissions, acts or failures to
act which resulted in such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof)
as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same proportion as the total proceeds from the Offering
purchased under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discount and
commissions received by the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company on the one hand and the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other, the intent
of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement,
omission, act or failure to act; provided that the parties hereto agree that the written information furnished to the Company through
the Representative by or on behalf of any Underwriter for use in any Preliminary Prospectus, any Registration Statement, the Disclosure
Package or the Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriters’ Information. The
Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.4 be determined
by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage, expense, liability, action,
investigation or proceeding referred to above in this Section 5.4 shall be deemed to include, for purposes of this Section 5.4,
any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing to defend
or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss,
claim, damage, expense, liability, action, investigation or proceeding. Notwithstanding the provisions of this Section 5.4, no
Underwriter shall be required to contribute any amount in excess of the total discount and commission received by such Underwriter
in connection with the Offering less the amount of any damages which such Underwriter has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or failure to act or alleged
failure to act. 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. The Underwriters’ obligation
to contribute as provided in this Section 5.4 are several and in proportion to their respective underwriting obligation, and not
joint.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Shares or Additional Shares. If any Underwriter or Underwriters shall default in its or their obligations
to purchase the Firm Shares or the Additional Shares, if the Over-allotment Option is exercised hereunder, and if the number of
the Firm Shares or Additional Shares with respect to which such default relates does not exceed in the aggregate 10% of the number
of Firm Shares or Additional Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Additional
Shares to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments
hereunder.
6.2 Default
Exceeding 10% of Firm Shares or Additional Shares. In the event that the default addressed in Section 6.1 relates to more than
10% of the Firm Shares or Additional Shares, you may in your discretion arrange for yourself or for another party or parties to
purchase such Firm Shares or Additional Shares to which such default relates on the terms contained herein. If, within one (1)
Business Day after such default relating to more than 10% of the Firm Shares or Additional Shares, you do not arrange for the purchase
of such Firm Shares or Additional Shares, then the Company shall be entitled to a further period of one (1) Business Day within
which to procure another party or parties satisfactory to you to purchase said Firm Shares or Additional Shares on such terms.
In the event that neither you nor the Company arrange for the purchase of the Firm Shares or Additional Shares to which a default
relates as provided in this Section 6.2, this Agreement will automatically be terminated by you or the Company without liability
on the part of the Company (except as provided in Sections 3.10 and 5 hereof) or the several Underwriters (except as provided in
Section 5 hereof); provided, however, that if such default occurs with respect to the Additional Shares, this Agreement
will not terminate as to the Firm Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of
its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.
6.3 Postponement
of Closing Date. In the event that the Firm Shares or Additional Shares to which the default relates are to be purchased by
the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have
the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5)
Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Disclosure
Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to
the Registration Statement, the Disclosure Package or the Prospectus that in the reasonable opinion of counsel for the Underwriter
may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such Common Shares.
7. Additional
Covenants.
7.1 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members
of the Board of Directors and the overall composition of the Board comply with the Sarbanes-Oxley Act, the Exchange Act and the
listing rules of the NasdaqCM or any other national securities exchange, as the case may be, in the event the Company seeks to
have any of its securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable,
at least one member of the Audit Committee of the Board of Directors qualifies as an “audit committee financial expert,”
as such term is defined under Regulation S-K and the listing rules of the NasdaqCM.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (lst)
Business Day following the fortieth (40th) day after the Closing Date, other than
normal and customary releases issued in the ordinary course of the Company’s business.
7.3 Right
of First Refusal. Provided that the Public Securities are sold in accordance with the terms of this Agreement, the Representative
shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of six (6) months
after the date hereof, to act as sole investment banker, sole book runner and/or sole placement agent, at the Representative’s
sole discretion, for each and every public and private equity and debt offering (including equity linked financing) on terms customary
to the Representative (each, a “Subject Transaction”). The Company shall notify the Representative of its intention
to pursue a Subject Transaction, including the material terms thereof, by providing written notice thereof by registered mail or
overnight courier service addressed to the Representative. If the Representative fails to exercise its Right of First Refusal
with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written notice, then the Representative
shall have no further claim or right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute
discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided that any such election
by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subject
Transaction. The terms and conditions of any such engagements shall be set forth in separate agreements and may be
subject to, among other things, satisfactory completion of due diligence by the Representative, market conditions, the absence
of a material adverse change to the Company’s business, financial condition and prospects, approval of the Representative’s
internal committee and any other conditions that the Representative may deem appropriate for transactions of such nature.
8. Effectiveness
of this Agreement and Termination Thereof.
8.1 Effectiveness
of the Agreement. This Agreement shall become effective when both the Company and the Representative have executed the same
and delivered counterparts of such signatures to the other party.
8.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic
or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially
disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or The NASDAQ
Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government
authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major
hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a
moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets;
or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage
or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable
to proceed with the delivery of the Firm Shares or Additional Shares; or (vii) if the Company is in breach of any of its representations,
warranties or covenants hereunder; or (viii) if the Representative shall have become aware after the date hereof of such a
material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions
as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the
Public Securities or to enforce contracts made by the Underwriters for the sale of the Public Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein
or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees
and disbursements of Representative Counsel) up to $50,000 inclusive of the $25,000 advance for actual, out-of-pocket accountable
expenses previously paid by the Company to the Representative (the “Advance”) and upon demand the Company shall
pay the full amount thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap
in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any
advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with
FINRA Rule 5110(f)(2)(C).
8.4 Survival
of Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination
of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full
force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this
Agreement or any part hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9. Miscellaneous.
9.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission or electronic mail and confirmed
and shall be deemed given when so delivered or faxed or emailed and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
Aegis Capital Corp.
810 Seventh Avenue, 18th
Floor
New York, New York 10019
Attn: Mr. David Bocchi, Managing Director of Investment Banking
Fax No.: (212) 813-1047
Email:
with a copy (which shall not constitute notice) to:
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
Attn: Brad L. Shiffman, Esq.
Fax No.: (917) 332-3725
Email: bshiffman@blankrome.com
If to the Company:
Manhattan Bridge Capital, Inc.
60 Cutter Mill Road
Great Neck, New York 11021
Attn: Assaf Ran, Chief Executive Officer
Fax No.: (516) 444-3404
Email: assaf@dagmedia.com
with a copy (which shall not constitute notice) to:
Morse, Zelnick, Rose & Lander, LLP
825 Third Avenue
New York, New York 10022
Attention: Stephen A. Zelnick, Esq.
Fax No.: (212) 208-6809
Email: szelnick@mzrl.com
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.3 Absence
of Fiduciary Relationship. The Company acknowledges and agrees that:
(i) each
Underwriter’s responsibility to the Company is solely contractual in nature, each Underwriter has been retained solely to
act as an underwriter in connection with the Offering and no fiduciary, advisory or agency relationship between the Company and
the Underwriters has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether
either the Representative has advised or is advising the Company on other matters;
(ii) the
price of the Public Securities set forth in this Agreement was established by the Company following discussions and arms-length
negotiations with the Representative, and the Company is capable of evaluating and understanding, and understands and accepts,
the terms, risks and conditions of the transactions contemplated by this Agreement; and
(iii) it
has been advised that the Representative and their respective affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that the Underwriters have no obligation to disclose such interests
and transactions to the Company by virtue of any fiduciary, advisory or agency relationship.
9.4 Research
Analyst Independence. The Company acknowledges that each Underwriter’s research analysts and research departments are
required to be independent from its investment banking division and are subject to certain regulations and internal policies, and
that such Underwriter’s research analysts may hold views and make statements or investment recommendations and/or publish
research reports with respect to the Company and/or the offering that differ from the views of their investment banking division.
The Company acknowledges that each Underwriter is a full service securities firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for its own account or the account of its customers and hold long
or short positions in debt or equity securities of the Company; provided, however, that nothing in this Section 9.4 shall
relieve the Underwriter of any responsibility or liability it may otherwise bear in connection with activities in violation of
applicable securities laws, rules or regulations.
9.5 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.6 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.7 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors
and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.8 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that
any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced
in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to
such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal
and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating
to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its shareholders and affiliates) and each of the Underwriters hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
9.9 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission
shall constitute valid and sufficient delivery thereof.
9.10 Waiver,
etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof
or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance
or non-fulfillment.
[Signature Page Follows]
If the foregoing correctly
sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
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Very truly yours, |
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MANHATTAN BRIDGE CAPITAL, INC. |
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By: |
/s/ Assaf Ran |
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Name: Assaf Ran |
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Title: CEO |
Confirmed as of the date first written
above, on behalf of itself and as
Representative of the several Underwriters
named on Schedule 1 hereto:
| AEGIS CAPITAL CORP. |
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| By: |
/s/ David Bocchi |
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| Name: David Bocchi |
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| Title: Head of Investment Banking |
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SCHEDULE 1
| Underwriter | |
Total Number of Firm Shares to be Purchased | | |
Number of Additional
Shares to be Purchased if
Over-Allotment Option is
Fully Exercised | |
| Aegis Capital Corp | |
| 1,015,000 | | |
| 152,250 | |
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SCHEDULE 2-A
Pricing Information
Number of Firm Shares: 1,015,000
Number of Additional Shares: 152,250
Public Offering Price per Share: $ 4.39
Underwriting Discount per Share: $ 0.3073
Proceeds to Company per Share (before other expenses): $
4.0827
Underwriting Non-accountable expense allowance per Share: $
0.0439
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
May 18, 2015
SCHEDULE 3
List of Lock-Up Parties
EXHIBIT A
Form of Representative’s Warrant
Agreement
EXHIBIT B
Form of Lock-Up Agreement
May __, 2015
Aegis Capital Corp.
810 Seventh Avenue, 18th Floor
New York, New York 10019
Ladies and Gentlemen:
The undersigned understands
that Aegis Capital Corp. (the “Representative”) proposes to enter into an Underwriting Agreement (the “Underwriting
Agreement ”) with Manhattan Bridge Capital, Inc., a New York corporation (the “Company”), dated the
date hereof, providing for the public offering (the “Public Offering”) of Common Shares, par value $0.001 per
share, of the Company (the “Shares”).
To induce the Representative
to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent
of the Representative, the undersigned will not, during the period commencing on the date of this lock-up agreement (the “Lock-Up
Agreement”) and ending three (3) months after the closing date of the Public Offering (the “Lock-Up Period”),
(1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares
or any securities convertible into or exercisable or exchangeable for Shares, whether now owned or hereafter acquired by the undersigned
or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up
Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect
to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition,
or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing,
and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative
in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of
the Public Offering; provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), shall be required or shall be voluntarily made in connection with subsequent sales of
Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by
will or intestacy or to a family member or trust for the benefit of a family member (for purposes of this lock-up agreement, “family
member” means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up
Securities to a charity or educational institution; or (d) if the undersigned, directly or indirectly, controls a corporation,
partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner
or member of, or owner of similar equity interests in, the undersigned, as the case may be; provided that in the case of
any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for
value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this
lock-up agreement and (iii) no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made.
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and
registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with this lock-up agreement.
If (i) during the last 17 days of the Lock-Up
Period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior
to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material
news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions
imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives,
in writing, such extension.
The undersigned agrees
that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during
the period from the date hereof to and including the 34th day following the expiration
of the initial Lock-Up Period, the undersigned will give notice thereof to the Company and will not consummate any such transaction
or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as may have been
extended pursuant to the previous paragraph) has expired.
If the undersigned is
an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable to
any issuer-directed or “friends and family” Shares that the undersigned may purchase in the Public Offering; (ii) the
Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing
restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release
or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press
release through a major news service at least two (2) business days before the effective date of the release or waiver. Any release
or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days
after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver
is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing
to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in
effect at the time of such transfer.
No provision in this
lock-up agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities
exercisable or exchangeable for or convertible into Shares, as applicable; provided that the undersigned does not transfer
the Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to
the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or
modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in
such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period) or a sale of 100% of the Company’s
outstanding Shares.
The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors and assigns.
The undersigned understands that, if the
Underwriting Agreement is not executed by July 31, 2015, or if the Underwriting Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, then
this lock-up agreement shall be void and of no further force or effect.
Whether or not the Public Offering actually
occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation between the Company and the Representative.
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Very truly yours, |
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(Name - Please Print) |
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(Signature) |
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(Name of Signatory, in the case of entities - Please Print) |
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(Title of Signatory, in the case of entities - Please Print) |
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Address: |
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EXHIBIT C
Form of Press Release
Manhattan Bridge Capital, Inc.
[Date]
Manhattan Bridge Capital,
Inc. (the “Company”) announced today that Aegis Capital Corp., acting as representative for the underwriters
in the Company’s recent public offering of the Company’s common shares, is [waiving] [releasing] a lock-up restriction
with respect to _________ of the Company’s common shares held by [certain officers or directors] [an officer or director]
of the Company. The [waiver] [release] will take effect on _________, 20___, and the shares may be sold on or after such
date.
This press release
is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited,
and such securities may not be offered or sold in the United States absent registration or an exemption from registration under
the Securities Act of 1933, as amended.
