Exhibit 1.1
2,164,000 SHARES of
Common Stock, 8,872 SHARES
OF
SERIES A CONVERTIBLE PREFERRED STOCK
(CONVERTIBLE
INTO 4,436,000 SHARES OF COMMON STOCK) AND
6,600,000
Warrants (exercisable for 6,600,000 shares of common stock)
of
CYCLACEL PHARMACEUTICALS, INC.
UNDERWRITING AGREEMENT
July 19, 2017
Ladenburg Thalmann & Co. Inc.
As the Representative of the
Several underwriters, if any, named in Schedule
I hereto
4400 Biscayne Boulevard, 14th Floor
Miami, Florida 33137
Ladies and Gentlemen:
The undersigned, Cyclacel
Pharmaceuticals, Inc., a Delaware corporation (collectively with its subsidiaries and affiliates, including, without limitation,
all entities disclosed or described in the Registration Statement as being subsidiaries or affiliates of Cyclacel Pharmaceuticals,
Inc., the “Company”), hereby confirms its agreement (this “Agreement”) with the several underwriters
(such underwriters, including the Representative (as defined below), the “Underwriters” and each an “Underwriter”)
named in Schedule I hereto for which Ladenburg Thalmann & Co. Inc. is acting as representative to the several Underwriters
(the “Representative” and if there are no Underwriters other than the Representative, references to multiple
Underwriters shall be disregarded and the term Representative as used herein shall have the same meaning as Underwriter) on the
terms and conditions set forth herein.
It is understood that the
several Underwriters are to make a public offering of the Public Securities as soon as the Representative deems it advisable to
do so. The Public Securities are to be initially offered to the public at the public offering price set forth in the Prospectus.
The Representative may from time to time thereafter change the public offering price and other selling terms.
It is further understood
that you will act as the Representative for the Underwriters in the offering and sale of the Closing Securities and, if any, the
Option Securities in accordance with this Agreement.
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Certificate of Designation (as defined herein) and (b) the following terms have the meanings
set forth in this Section 1.1:
“Action”
shall have the meaning ascribed to such term in Section 3.1(k).
“Affiliate”
means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or
is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities
Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.
“Certificate
of Designation” means the Certificate of Designation to be filed prior to the Closing by the Company with the Secretary
of State of Delaware, in substantially the form of Exhibit A attached hereto.
“Closing”
means the closing of the purchase and sale of the Closing Securities pursuant to Section 2.1.
“Closing
Date” means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters’
obligations to pay the Closing Purchase Price and (ii) the Company’s obligations to deliver the Closing Securities, in each
case, have been satisfied or waived, but in no event later than 10:00 a.m. (New York City time) on the third Trading Day following
the date hereof or at such earlier time as shall be agreed upon by the Representative and the Company.
“Closing
Preferred Shares” shall have the meaning ascribed to such term in Section 2.1(a)(i).
“Closing
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b), which aggregate purchase price shall
be net of the underwriting discounts and commissions.
“Closing
Securities” shall have the meaning ascribed to such term in Section 2.1(a)(iii).
“Closing
Shares” shall have the meaning ascribed to such term in Section 2.1(a)(ii).
“Closing
Warrants” shall have the meaning ascribed to such term in Section 2.1(a)(iii).
“Combined
Preferred Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Combined
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“Company
Auditor” means RSM US LLP, with offices located at 1185 Avenue of the Americas, New York, New York 10036.
“Company
Counsel” means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with offices located at 666 Third Avenue, New York,
New York 10017.
“Conversion
Price” shall have the meaning ascribed to such term in the Certificate of Designation.
“Conversion
Shares” shall have the meaning ascribed to such term in the Certificate of Designation.
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Effective
Date” shall have the meaning ascribed to such term in Section 3.1(f).
“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Execution
Date” shall mean the date on which the parties execute and enter into this Agreement.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options
or
other equity awards to employees, officers or directors of the Company pursuant to any stock or option plan or other equity incentive
plan duly adopted for such purpose by a majority of the non-employee members of the Board of Directors or a majority of the members
of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion
of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date
of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price
of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
until after January 5, 2018 and provided that any such issuance shall only be to a Person
(or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to
the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“FINRA”
means the Financial Industry Regulatory Authority.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(i).
“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreements” means the lock-up agreements with a term of 90 days that are delivered on the date hereof by each of the
Company’s officers and directors, in the form of Exhibit E attached hereto.
“Material
Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction Document, provided that a change
in the market price of the Common Stock or trading volume of the Common Stock alone shall not be deemed, in and of itself, to constitute
a Material Adverse Effect and adverse effects resulting solely from or relating solely to the following shall be not be taken into
account in determining whether there has been a Material Adverse Effect, except, in the case of clauses (a), (b) and (d) below,
to the extent the impact of the event described therein has an adverse effect on the Company taken as a whole that is materially
disproportionate to the Company taken as a whole compared to other companies operating in the same industry: (a) general economic
conditions, or conditions in financial, banking or securities markets; (b) general conditions in the industry or any industry
sector in which the Company operates or participates; (c) any natural disaster or any national or international political
or social conditions or any act of terrorism, sabotage, military action or war or any escalation or worsening thereof; or (d) any
changes in applicable laws or governmental regulations or the interpretation thereof.
“Offering”
shall have the meaning ascribed to such term in Section 2.1(c).
“Option
Closing Date” shall have the meaning ascribed to such term in Section 2.2(c).
“Option
Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.2(b), which aggregate purchase price
shall be net of the underwriting discounts and commissions.
“Option
Securities” shall have the meaning ascribed to such term in Section 2.2(a).
“Option
Shares” shall have the meaning ascribed to such term in Section 2.2(a)(i).
“Option
Warrants” shall have the meaning ascribed to such term in Section 2.2(a).
“Over-Allotment
Option” shall have the meaning ascribed to such term in Section 2.2.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred
Stock” means up to 8,872 shares of the Company’s Series A Convertible Preferred Stock issued or issuable pursuant
to Section 2.1(a)(i) and having the rights, preferences and privileges set forth in the Certificate of Designation.
“Preferred
Stock Agency Agreement” means the Addendum to Transfer Agency and Registrar Services Agreement, dated as of July 17,
2017, between the Company and the Transfer Agent, pursuant to which the Transfer Agent agrees to act as transfer agent and conversion
agent for the Preferred Stock.
“Preliminary
Prospectus” means, if any, any preliminary prospectus relating to the Securities included in the Registration Statement
or filed with the Commission pursuant to Rule 424(b).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed for the Registration Statement.
“Prospectus
Supplement” means, if any, any supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is
filed with the Commission.
“Public
Securities” means, collectively, the Closing Securities and, if any, the Option Securities.
“Registration
Statement” means, collectively, the various parts of the registration statement prepared by the Company on Form S-1 (File
No. 333-218305) with respect to the Securities, each as amended as of the date hereof, including the Prospectus and Prospectus
Supplement, if any, the Preliminary Prospectus, if any, and all exhibits filed with or incorporated by reference into such registration
statement and includes the Rule 462(b) Registration Statement.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants
or conversion in full of all shares of Preferred Stock, ignoring any conversion or exercise limits set forth therein.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“Rule
462(b) Registration Statement” means the registration statement prepared by the Company as a post-effective amendment
to the Registration Statement, which was filed with the Commission on or prior to the date hereof and became automatically effective
pursuant to Rule 462(b) promulgated by the Commission pursuant to the Securities Act.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(i).
“Securities”
means the Closing Securities, the Option Securities and the Underlying Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Shares”
means, collectively, the shares of Common Stock delivered to the Underwriters in accordance with Section 2.1(a)(ii) and Section
2.2(a).
“Stated
Value” means $1,000 per share of Preferred Stock.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company
formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the
New York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Certificate of Designation, the Warrants, the Warrant Agency Agreement, the Preferred
Stock Agency Agreement, the Lock-Up Agreements, and any other documents or agreements executed in connection with the transactions
contemplated hereunder.
“Transfer
Agent” means American Stock Transfer & Trust Company, with offices located at 6201 15th Avenue, Brooklyn,
New York 11219, and any successor transfer agent of the Company.
“Underlying
Shares” means, collectively, the Conversion Shares and the Warrant Shares.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined
by an independent
appraiser selected in good faith by the Representative and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.
“Warrant
Agency Agreement” means the warrant agency agreement dated on or about the date hereof, between the Company and the Transfer
Agent, pursuant to which the Transfer Agent will act as warrant agent for the Warrants, in the form of Exhibit E attached
hereto.
“Warrant
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Underwriters in accordance with Section 2.1(a) and Section
2.2(a), which warrants shall be exercisable immediately and have a term of exercise equal to seven (7) years, in the form of Exhibit
B attached hereto.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
(a) Upon
the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate 2,164,000 shares of Common
Stock, 8,872 shares of Preferred Stock, and 6,600,000 Warrants, and each Underwriter agrees to purchase, severally and not jointly,
at the Closing, the following securities of the Company:
(i) the
number of shares of Preferred Stock (the “Closing Preferred Shares”) set forth opposite the name of such Underwriter
on Schedule I hereof;
(ii) the
number of shares of Common Stock (the “Closing Shares”) set forth opposite the name of such Underwriter on Schedule
I hereof; and
(iii) Warrants
to purchase up to 100% of the sum of the number of Closing Shares set forth opposite the name of such Underwriter on Schedule
I hereof plus the aggregate number of Conversion Shares underlying the Closing Preferred Shares set forth opposite the name
of such Underwriter on Schedule I hereof (the “Closing Warrants” and, collectively with the Closing Shares
and the Closing Preferred Shares, the “Closing Securities”), which Warrants shall have an exercise price of
$2.00, subject to adjustment as provided therein.
(b) The
aggregate purchase price for the Closing Securities shall equal the amount set forth opposite the name of such Underwriter on Schedule
I hereto (the
“Closing
Purchase Price”). The combined purchase price for one Share and a Warrant to purchase one (1) Warrant Share shall be
$1.86 (the “Combined Purchase Price”) which shall be allocated as $1.8507 per Share (the “Share Purchase
Price”) and $0.0093 per Warrant (the “Warrant Purchase Price”). The combined purchase price for one
Closing Preferred Share and Warrants to purchase 500 Warrant Shares shall be $930.00 (the “Combined Preferred Purchase
Price”) which shall be allocated as $925.35 per Preferred Share and $0.0093 per Warrant; and
(c) On the Closing Date, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer, immediately available
funds equal to such Underwriter’s Closing Purchase Price and the Company shall deliver to, or as directed by, such Underwriter
its respective Closing Securities and the Company shall deliver the other items required pursuant to Section 2.3 deliverable at
the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4, the Closing shall occur at the
offices of EGS or such other location as the Company and Representative shall mutually agree. The Public Securities are to be offered
initially to the public at the offering price set forth on the cover page of the Prospectus (the “Offering”).
(d) The
Company acknowledges and agrees that, with respect to any Notice(s) of Conversion (as defined in the Certificate of Designation)
delivered by a Holder (as defined in the Certificate of Designation) on or prior to 12:00 p.m. (New York City time) on the Closing
Date, which Notice(s) of Conversion may be delivered at any time after the time of execution of this Agreement, the Company shall
deliver the Conversion Shares (as defined in the Certificate of Designation) subject to such notice(s) to the Holder by 4:00 p.m.
(New York City time) on the Closing Date. The Company acknowledges and agrees that the Holders are third-party beneficiaries of
this covenant of the Company.
2.2 Over-Allotment
Option.
(a) For
the purposes of covering any over-allotments in connection with the distribution and sale of the Closing Securities, the Representative
is hereby granted an option (the “Over-Allotment Option”) to purchase, in the aggregate, up to 990,000 shares
of Common Stock (the “Option Shares”) and Warrants to purchase up to 990,000 shares of Common Stock (the “Option
Warrants” and, collectively with the Option Shares, the “Option Securities”) which may be purchased
in any combination of Option Shares and/or Option Warrants at the Share Purchase Price and/or Warrant Purchase Price, respectively.
(b) In
connection with an exercise of the Over-Allotment Option, (a) the purchase price to be paid for the Option Shares is equal to the
product of the Share Purchase Price multiplied by the number of Option Shares to be purchased and (b) the purchase price to be
paid for the Option Warrants is equal to the product of the Warrant Purchase Price multiplied by the number of Option Warrants
(the aggregate purchase price to be paid on an Option Closing Date, the “Option Closing Purchase Price”).
(c) The
Over-Allotment Option granted pursuant to this Section 2.2 may be
exercised by the
Representative as to all (at any time) or any part (from time to time) of the Option Securities within forty-five (45) days after
the Execution Date. An Underwriter will not be under any obligation to purchase any Option Securities prior to the exercise of
the Over-Allotment Option by the Representative. The Over-Allotment Option granted hereby may be exercised by the giving of oral
notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic
transmission setting forth the number of Option Shares and/or Option Warrants to be purchased and the date and time for delivery
of and payment for the Option Securities (each, an “Option Closing Date”), which will not be later than three
(3) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative,
at the offices of EGS or at such other place (including remotely by facsimile or other electronic transmission) as shall
be agreed upon by the Company and the Representative. If such delivery and payment for the Option Securities does not occur on
the Closing Date, each Option Closing Date will be as set forth in the notice. Upon exercise of the Over-Allotment Option, the
Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters
will become obligated to purchase, the number of Option Shares and/or Option Warrants specified in such notice. The Representative
may cancel the Over-Allotment Option at any time prior to the expiration of the Over-Allotment Option by written notice to the
Company.
2.3 Deliveries.
The Company shall deliver or cause to be delivered to each Underwriter (if applicable) the following:
(i) At
the Closing Date, the Closing Shares and, as to each Option Closing Date, if any, the applicable Option Shares, which shall be
delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;
(ii) At
the Closing Date, the Closing Preferred Shares, which shall be delivered via The Depository Trust Company Deposit or Withdrawal
at Custodian system for the accounts of the several Underwriters;
(iii) At
the Closing Date, the Closing Warrants and, as to each Option Closing Date, if any, the applicable Option Warrants, which shall
be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;
(iv) At
the Closing Date, evidence of the filing and acceptance of the Certificate of Designation from the Secretary of State of Delaware;
(v) At
the Closing Date, the Warrant Agency Agreement duly executed by the parties thereto;
(vi) At
the Closing Date, the Preferred Stock Agency Agreement duly executed by the parties thereto;
(vii) At
the Closing Date, a legal opinion of Company Counsel addressed to the Underwriters, including, without limitation, a negative assurance
letter, substantially in the form of Exhibit C attached hereto, and as to each Option Closing Date, if any, a bring-down
opinion and negative assurance letter from Company Counsel in form and substance reasonably satisfactory to the Representative;
(viii) Contemporaneously
herewith, a cold comfort letter, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative
from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated as of the Closing
Date and each Option Closing Date, if any;
(ix) On
the Closing Date and on each Option Closing Date, the duly executed and delivered Officer’s Certificate, substantially in
the form set forth on Exhibit F attached hereto;
(x) On
the Closing Date and on each Option Closing Date, the duly executed and delivered Secretary’s Certificate, substantially
in the form set forth on Exhibit G attached hereto; and
(xi) Contemporaneously
herewith, the duly executed and delivered Lock-Up Agreements.
2.4 Closing
Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing and each Option Closing
Date are subject to the following conditions being met:
(i) the
accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company
already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the
Company contained herein (unless as of a specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been
performed in all material respects;
(iii) the
delivery by the Company of the items set forth in Section 2.3 of this Agreement;
(iv) the
Registration Statement shall be effective on the date of this Agreement and at each of the Closing Date and each Option Closing
Date, if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of
the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative;
(v) by
the Execution Date, if required by FINRA, the Underwriters shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriters as described in the Registration Statement;
(vi) the
Closing Shares, the Option Shares and the Underlying Shares have been approved for listing on the Trading Market; and
(vii) 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 Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any
Affiliate of the Company before or by any court or federal or state commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition
or income of the Company, except as set forth in the Registration Statement and Prospectus; (iii) no stop order shall have
been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and
(iv) the Registration Statement 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 rules and regulations thereunder and shall
conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and neither
the Registration Statement nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules, the Company represents and warrants to the Underwriters as of the Execution Date, as of the
Closing Date and as of each Option Closing Date, if any, as follows:
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities. If the Company has no Subsidiaries, all other
references to the
Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filing with the Commission of the Prospectus, (ii) the application to the Trading Market for the listing of the Shares and
the Underlying Shares for trading thereon and (iii) such filings as are required to be made under applicable state securities laws
(collectively, the “Required Approvals”).
(f) Registration
Statement. The Company has filed with the Commission the Registration Statement, including any related Prospectus or Prospectuses,
for the registration of the Securities under the Securities Act, which Registration Statement has been 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 Registration Statement has been declared effective by the Commission on July 18, 2017 (the “Effective
Date”) and was post-effectively amended by the Rule 462(b) Registration Statement which is effective on the date hereof.
The Company has advised the Representative of all further information (financial and other) with respect to the Company required
to be set forth therein in the Registration Statement and Prospectus. Any reference in this Agreement to the Registration Statement,
the Prospectus or any Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein;
and any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with
respect to the Registration Statement, the Prospectus or any Prospectus Supplement shall be deemed to refer to and include the
filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Prospectus or any Prospectus
Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements
and schedules and other information which is “contained,” “included,” “described,” “referenced,”
“set forth” or “stated” in the Registration Statement, the Prospectus or any Prospectus Supplement (and
all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the Registration Statement, the Prospectus or any Prospectus
Supplement, as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus
or any Prospectus Supplement has been issued, and no proceeding for
any such purpose
is pending or has been initiated or, to the Company's knowledge, is threatened by the Commission. For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act. The Company will not,
without the prior consent of the Representative, prepare, use or refer to, any free writing prospectus.
(g) Issuance
of Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The
Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and
nonassessable, and free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum and the Option
Shares issuable pursuant to the Over-Allotment Option on the date hereof. The holder of the Securities will not be subject to personal
liability by reason of being such holders. The Securities are not and will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights granted by the Company. All corporate action required to be taken
for the authorization, issuance and sale of the Securities has been duly and validly taken. The Securities conform in all
material respects to all statements with respect thereto contained in the Registration Statement.
(h) Capitalization.
The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its most
recently filed periodic or current report under the Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the
date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except
as a result of the purchase and sale of the Securities and as set forth in the Registration Statement, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is
or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Underwriters) and
will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under
any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The authorized
shares of the Company conform in all material respects to all statements relating thereto
contained in the
Registration Statement and the Prospectus. The offers and sales of the Company’s securities were at all relevant times either
registered under the Securities Act and the applicable state securities or Blue Sky laws or, based in part on the representations
and warranties of the purchasers, exempt from such registration requirements. No further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party
or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(i) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and any Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on
a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and
documents described in the Registration Statement, the Preliminary Prospectus, the Prospectus, any Prospectus Supplement and the
SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other documents required by the
Securities Act and the rules and regulations thereunder to be described in the Registration Statement, the Prospectus, any Prospectus
Supplement or the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been
so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party
or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Prospectus, the
Prospectus Supplement or the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and
validly executed by the Company, is in full force and effect in all
material respects
and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its
terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under
the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be
brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the
Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no event
has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best
of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will
not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation,
those relating to environmental laws and regulations.
(j) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the
Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option
plans and (vi) no officer or director of the Company has resigned from any position with the Company. The Company does not have
pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities
contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is
reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects,
properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to
the date that this representation is made. Unless otherwise disclosed in an SEC Report filed prior to the date hereof, the Company
has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared
or paid any dividend or made any other distribution on or in respect to its capital stock.
(k) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.
(l) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(m) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has
the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety,
product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (each,
a “Material Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material Permit. The disclosures in the Registration Statement concerning the effects
of Federal, State, local and all foreign regulation on the Company’s business as currently contemplated are correct in all
material respects.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights
to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with
GAAP and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and
the Subsidiaries are in compliance.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses
and which the failure to do so could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement, except as could not reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights
of any Person, except as could not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do
so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered
by the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and
its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.
(t) Certain
Fees. Except as set forth in the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the
Company, any Subsidiary or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company’s
knowledge, there are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any
of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA. The Company has not made any
direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee
or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised
or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member, within the twelve months prior to the Execution Date. None of the net proceeds
of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized
herein.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities will not
be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(v) Registration
Rights. Except as set forth in the Registration Statement, no Person has any right to cause the Company or any Subsidiary to
effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible
for electronic transfer through the
Depository Trust
Company or another established clearing corporation and the Company is current in payment of the fees of the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
(x) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable as a result of the Underwriters and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents.
(y) Disclosure;
10b-5. The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules
as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, if any, at the
time it became effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable rules
and regulations under the Securities Act and did not and, as amended or supplemented, if applicable, will not, contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading. The Preliminary Prospectus, the Prospectus and any Prospectus Supplement, each as of its respective date,
comply in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations. Each of
the Preliminary Prospectus, the Prospectus and any Prospectus Supplement, as amended or supplemented, did not and will not contain
as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. The SEC Reports, when they were filed
with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable rules and regulations,
and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein (with respect to the SEC Reports incorporated by reference in
the Prospectus), in light of the circumstances under which they were made not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are filed with the Commission, will conform in all material respects
to the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances
under which they were made not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events
arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth
therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection
with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not
be filed within the requisite time period. There are no contracts or other documents required to be described in the Prospectus
or any Prospectus Supplement, or to be filed as exhibits or
schedules to the
Registration Statement, which have not been described or filed as required. The press releases disseminated by the Company during
the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made and when made, not misleading.
(z) No
Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would
cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder
approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(aa) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports sets forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments.
(bb) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary know of no basis for
any such claim.
The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement
are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such
consolidated financial statements. The term “taxes” mean all federal, state, local, foreign, and other net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes,
fees, assessments, or charges of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional
amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents
required to be filed in respect to taxes.
(cc) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of FCPA. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient
to cause the Company to comply in all material respects with the FCPA.
(dd) Accountants.
To the knowledge and belief of the Company, the Company Auditor (i) is an independent registered public accounting firm as required
by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ending December 31, 2017. The Company Auditor has not, during the periods covered by the financial
statements included in the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of
the Exchange Act.
(ee) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation)
against the Company
or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other
communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration,
or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling
and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or
withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii)
imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any
facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction
with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company
or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties,
business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable
laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing,
sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has
the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed
by the Company.
(ff) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department.
(gg) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s
request.
(hh) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%)
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(ii) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or
proceeding by or
before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect
to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(jj) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the
Company’s directors and officers within the six months prior to the Offering as well as in the Lock-Up Agreement provided
to the Underwriters is true and correct in all respects and the Company has not become aware of any information which would cause
the information disclosed in such questionnaires become inaccurate and incorrect.
(kk) FINRA
Affiliation. To the Company’s knowledge, no officer, director or any beneficial owner of 5% or more of the Company’s
unregistered securities has any direct or indirect affiliation or association with any FINRA member (as determined in accordance
with the rules and regulations of FINRA) that is participating in the Offering. The Company will advise the Representative and
EGS if it learns that any officer, director or owner of 5% or more of the Company’s outstanding shares of Common
Stock or Common Stock Equivalents is or becomes an affiliate or associated person of a FINRA member firm.
(ll) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or EGS
shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
(mm) Board
of Directors. The Board of Directors 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 of Directors comply with the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of the Trading Market.
At least one member of the Board of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley
Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market. In addition, at least a majority of the persons
serving on the Board of Directors qualify as “independent” as defined under the rules of the Trading Market.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Amendments
to Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriters complete
conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof,
and conformed copies of the Registration Statement (without exhibits), the Prospectus and the Prospectus Supplement, as amended
or supplemented, in such quantities and at such places as an Underwriter reasonably requests. Neither the Company nor any of its
directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection
with the offering and sale of the Securities other than the
Prospectus, the Prospectus
Supplement, the Registration Statement, any Permitted Free Writing Prospectus, and copies of the documents incorporated by reference
therein. The Company shall not file any such amendment or supplement to which the Representative shall reasonably object in writing.
4.2 Federal
Securities Laws.
(a) Compliance.
During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use its best efforts to
comply with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance of sales
of or dealings in the Securities in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus
relating to the Securities is required to be delivered under the Securities Act, any event shall have occurred as a result of which,
in the opinion of counsel for the Company or counsel for the Underwriters, the Prospectus, as then amended or supplemented, includes
an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time
to amend the Prospectus to comply with the Securities Act, the Company will notify the Underwriters promptly and prepare and file
with the Commission, subject to Section 4.1 hereof, an appropriate amendment or supplement in accordance with Section 10 of the
Securities Act.
(b) Filing
of Final Prospectus. The Company will file the final Prospectus (in form and substance reasonably satisfactory to the Representative)
with the Commission pursuant to the requirements of Rule 424.
(c) Exchange
Act Registration. For a period of three years from the Execution Date, the Company will use its best efforts to maintain the
registration of the Common Stock under the Exchange Act. The Company will not deregister the Common Stock under the Exchange Act
without the prior written consent of the Representative.
(d) Free
Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Securities
that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities
Act, without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative
is herein referred to as a “Permitted Free Writing Prospectus.” The Company represents that it will treat
each Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in rule and regulations under
the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including
timely Commission filing where required, legending and record keeping.
4.3 Delivery
to the Underwriters of Prospectuses. The Company will deliver to the Underwriters, without charge, from time to time during
the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of
each Prospectus as the Underwriters
may reasonably request and, as soon as the Registration Statement or any amendment or supplement thereto becomes effective, deliver
to you two original executed Registration Statements, including exhibits, and all post-effective amendments thereto and copies
of all exhibits filed therewith or incorporated therein by reference and all original executed consents of certified experts.
4.4 Effectiveness
and Events Requiring Notice to the Underwriters. The Company will use its best efforts to cause the Registration Statement
to remain effective with a current prospectus until the later of nine (9) months from the Execution Date and the date on which
the Warrants are no longer outstanding, and will notify the Underwriters and holders of the Warrants 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 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 4.4 that, in the judgment of the Company, makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made,
not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at
any time, the Company will make every reasonable effort to obtain promptly the lifting of such order.
4.5 Expenses.
(a) General
Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and each Option Closing Date,
if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company
under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration
of the Securities to be sold in the Offering (including the Option Securities) with the Commission; (b) all FINRA Public Offering
Filing System fees associated with the review of the Offering by FINRA; all fees and expenses relating to the listing of such Closing
Shares, Option Shares and Underlying Shares on the Trading Market and such other stock exchanges as the Company and the Representative
together determine; (c) all fees, expenses and disbursements relating to the registration or qualification of such Securities under
the “blue sky” securities laws of such states and other foreign jurisdictions as the Representative may reasonably
designate; (d) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting
Agreement and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire
and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many
preliminary and final Prospectuses as the Representative may reasonably deem necessary;
(e) the costs and
expenses of the Company’s public relations firm; (f) the costs of preparing, printing and delivering the Securities; (g)
fees and expenses of the Transfer Agent for the Securities (including, without limitation, any fees required for same-day processing
of any instruction letter delivered by the Company), including, without limitation, fees and expenses pursuant to the Warrant Agency
Agreement and the Preferred Stock Agency Agreement; (h) stock transfer and/or stamp taxes, if any, payable upon the transfer of
securities from the Company to the Underwriters; (i) the fees and expenses of the Company’s accountants; (j) the fees and
expenses of the Company’s legal counsel and other agents and representatives; (k) the Underwriters’ costs of mailing
prospectuses to prospective investors; (l) the costs associated with advertising the Offering in the national editions of the Wall
Street Journal and New York Times after the Closing Date; (m) the Underwriters’ use of i-Deal’s book-building, prospectus
tracking and compliance software (or other similar software) for the Offering; and (n) the Underwriters’ actual “road
show” expenses for the Offering. The Underwriters may also deduct from the net proceeds
of the Offering payable to the Company on the Closing Date, or each Option Closing Date, if any, the expenses set forth herein
to be paid by the Company to the Underwriters.
(b) Expenses
of the Representative. The Company further agrees that, in addition to the expenses payable pursuant to Section 4.5(a), on
the Closing Date, the Company will reimburse the Representative for its out-of-pocket expenses related to the Offering up to an
aggregate of $85,000 (which shall include any expenses incurred under clauses (m) and (n) of Section 4.5(a) herein), $15,000 of
which has been paid prior to the date hereof, which shall be paid by deduction from the proceeds of the Offering contemplated herein.
4.6 Application
of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application
described under the caption “Use Of Proceeds” in the Prospectus.
4.7 Delivery
of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which
need not be certified by independent public or independent certified public accountants unless required by the Securities Act or
the Rules and Regulations under the Securities Act, 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 consecutive months beginning after the Execution Date.
4.8 Stabilization.
Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative)
has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected
to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
4.9 Internal
Controls. The Company will 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.
4.10 Accountants.
The Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least
three years after the Execution Date. The Underwriters acknowledge that the Company Auditor is acceptable to the Underwriters.
4.11 FINRA.
The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater
shareholder of the Company becomes an affiliate or associated person of an Underwriter.
4.12 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates
or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company
or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding
anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the
success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the
Company by the Underwriters for the shares and the Underwriters have no obligation to disclose, or account to the Company for,
any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any
claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty.
4.13 Underlying
Shares. The shares of Common Stock underlying the Preferred Stock shall be issued free of legends. If all or any portion of
a Warrant is exercised at a time when there is an effective registration statement to cover the issuance of the Warrant Shares
or if the Warrant is exercised via cashless exercise at a time when such Warrant Shares would be eligible for resale under Rule
144 by a non-affiliate of the Company, the Warrant Shares issued pursuant to any such exercise shall be issued free of all restrictive
legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering
the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale of the Warrant Shares, the
Company shall promptly notify the holders of the Warrants in writing that such registration statement is not then effective and
thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale of
the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any
holder thereof to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws).
4.14 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board
members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated
thereunder and with the listing requirements of the Trading Market and (ii) if applicable, at least one member of the Board
of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the
rules promulgated thereunder.
4.15 Securities
Laws Disclosure; Publicity. At the request of the Representative, by 9:00 a.m. (New York City time) on the date hereof, the
Company shall issue a press release disclosing the material terms of the Offering. The Company and the Representative shall consult
with each other in issuing any other press releases with respect to the Offering, and neither the Company nor any Underwriter shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of
the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. The
Company will not issue press releases or engage in any other publicity, without the Representative’s prior written consent,
for a period ending at 5:00 p.m. (New York City time) on the first business day following the 40th day following the Closing Date,
other than normal and customary releases issued in the ordinary course of the Company’s business.
4.16 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Underwriter of the Securities is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Underwriter of Securities could be deemed to trigger the provisions of any such plan or arrangement,
by virtue of receiving Securities.
4.17 Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue the Required Minimum plus the number of Option Shares issuable pursuant to the Over-Allotment Option.
4.18 Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on
the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the Closing Shares, Option Shares and Underlying Shares on such Trading Market and promptly secure the listing of all of
the Closing Shares, Option Shares and Underlying Shares on such Trading Market. The Company further agrees, if the Company applies
to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Closing Shares,
Option Shares and Underlying Shares, and will take such other action as is necessary to cause all of the Closing Shares, Option
Shares and Underlying Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then
take all action reasonably necessary to continue the listing and trading of its Common Stock on a
Trading Market and will comply
in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.
The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company
or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company
or such other established clearing corporation in connection with such electronic transfer.
4.19 Subsequent
Equity Sales.
(a) From
the date hereof until January 5, 2018, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or
announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.
(b) From
the date hereof until twelve (12) months following the Closing Date, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction; provided, however, that the foregoing
prohibition shall terminate after (i) the VWAP of the Common Stock for each of 30 consecutive Trading Days (the “Measurement
Period,” which 30 consecutive Trading Day period shall not have commenced until after the Closing Date) exceeds $6.00
(subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the date hereof)
and (ii) the daily dollar volume of the Common Stock for each Trading Day during such Measurement Period exceeds $500,000 per Trading
Day. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common
Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with,
the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity
securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial
issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.
Any Underwriter shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall
be in addition to any right to collect damages.
(c) Notwithstanding
the foregoing, this Section 4.19 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.
4.20 Research
Independence. The Company acknowledges that each Underwriter’s research analysts and research departments, if any, are
required to be independent from their respective investment banking divisions and are subject to certain regulations and internal
policies, and that such Underwriter’s research analysts may hold and make statements or
investment recommendations
and/or publish research reports with respect to the Company and/or the offering that differ from the views of its investment bankers.
The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against such
Underwriter with respect to any conflict of interest that may arise from the fact that the views expressed by their independent
research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company
by such Underwriter’s investment banking divisions. The Company acknowledges that the Representative is a full service securities
firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account
of its customers and hold long or short position in debt or equity securities of the Company.
ARTICLE V.
DEFAULT BY
UNDERWRITERS
If
on the Closing Date or any Option Closing Date, if any, any Underwriter shall fail to purchase and pay for the portion of the Closing
Securities or Option Securities, as the case may be, which such Underwriter has agreed to purchase and pay for on such date (otherwise
than by reason of any default on the part of the Company), the Representative, or if the Representative is the defaulting Underwriter,
the non-defaulting Underwriters, shall use their reasonable efforts to procure within 36 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein,
the Closing Securities or Option Securities , as the case may be, which the defaulting Underwriter or Underwriters failed to purchase.
If during such 36 hours the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing
Securities or Option Securities, as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then
(a) if the aggregate number of Closing Securities or Option Securities, as the case may be, with respect to which such default
shall occur does not exceed 10% of the Closing Securities or Option Securities, as the case may be, covered hereby, the other Underwriters
shall be obligated, severally, in proportion to the respective numbers of Closing Securities or Option Securities, as the case
may be, which they are obligated to purchase hereunder, to purchase the Closing Securities or Option Securities, as the case may
be, which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of Closing Securities
or Option Securities, as the case may be, with respect to which such default shall occur exceeds 10% of the Closing Securities
or Option Securities, as the case may be, covered hereby, the Company or the Representative will have the right to terminate this
Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided in Article
VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the applicable Closing
Date may be postponed for such period, not exceeding seven days, as the Representative, or if the Representative is the defaulting
Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus or in any other
documents or arrangements may be effected. The term “Underwriter” includes any person substituted for a defaulting
Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
ARTICLE VI.
INDEMNIFICATION
6.1 Indemnification
of the Underwriters. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriters,
and each dealer selected by each Underwriter that participates in the offer and sale of the Securities (each a “Selected
Dealer”) and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter
or any Selected Dealer (“Controlling Person”) within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to
any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, whether arising out of any action between such Underwriter and the Company or between such
Underwriter and any third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange
Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in (i) any Preliminary Prospectus, if any, the Registration
Statement or the Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided
to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities, including
any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or
(iii) any application or other document or written communication (in this Article VI, collectively called “application”)
executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the
Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, Trading Market
or any securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to the applicable
Underwriter by or on behalf of such Underwriter expressly for use in any Preliminary Prospectus, if any, the Registration Statement
or Prospectus, or any amendment or supplement thereto, or in any application, as the case may be. With respect to any untrue statement
or omission or alleged untrue statement or omission made in the Preliminary Prospectus, if any, the indemnity agreement contained
in this Section 6.1 shall not inure to the benefit of an Underwriter to the extent that any loss, liability, claim, damage or expense
of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the Person asserting any such
loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such Person as required by
the Securities Act and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the
Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under
this Agreement. The Company agrees promptly to notify each Underwriter of the commencement of any litigation or proceedings against
the Company or any of its officers, directors or Controlling Persons in connection with the issue and sale of the Public Securities
or in connection with the Registration Statement or Prospectus.
6.2 Procedure.
If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be
sought against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may
be, shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of
such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter or such Selected
Dealer, as the case may be) and payment of actual expenses. Such Underwriter, such Selected Dealer or Controlling Person shall
have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the
Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company
shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available
to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected
by such Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding
anything to the contrary contained herein, if any Underwriter, Selected Dealer or Controlling Person shall assume the defense of
such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval
shall not be unreasonably withheld.
6.3 Indemnification
of the Company. Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its directors,
officers and employees and agents who control the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the
Company to such Underwriter, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements
or omissions made in any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement
thereto or in any application, in reliance upon, and in strict conformity with, written information furnished to the Company with
respect to such Underwriter by or on behalf of such Underwriter expressly for use in such Preliminary Prospectus, if any, the Registration
Statement or Prospectus or any amendment or supplement thereto or in any such application. In case any action shall be brought
against the Company or any other Person so indemnified based on any Preliminary Prospectus, if any, the Registration Statement
or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against
such Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other Person
so indemnified shall have the rights and duties given to such Underwriter by the provisions of this Article VI. Notwithstanding
the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting
discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters' obligations in this Section
6.3 to indemnify the Company are several in proportion to their respective underwriting obligations and not joint.
6.4 Contribution.
(a) Contribution
Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person
entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article
VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may
be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then,
and in each such case, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter,
as incurred, in such proportions that such Underwriter is responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is
responsible for the balance; provided, that, no Person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each director, officer and employee of such Underwriter or the Company, as applicable, and each Person,
if any, who controls such Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities Act shall
have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding the provisions of this
Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions
applicable to the Securities purchased by such Underwriter. The Underwriters' obligations in this Section 6.4 to contribute are
several in proportion to their respective underwriting obligations and not joint.
(b) Contribution
Procedure. Within fifteen days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to
so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representative of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall
not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such
party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this
Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the
Exchange Act or otherwise available.
ARTICLE VII.
MISCELLANEOUS
7.1 Termination.
(a) Termination
Right. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if
any domestic or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market shall have been
suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction,
or (iii) if the United States shall have become involved in a new war or an increase in major hostilities, or (iv) if
a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign exchange
trading has been declared which materially adversely impacts the United States securities markets, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious
act which, whether or not such loss shall have been insured, will, in the Representative’s opinion, make it inadvisable to
proceed with the delivery of the Securities, or (vii) if the Company is in material breach of any of its representations,
warranties or covenants hereunder, or (viii) if the Representative shall have become aware after the date hereof of such a
material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions
as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the
Securities or to enforce contracts made by the Underwriters for the sale of the Securities.
(b) Expenses.
In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions
thereof pursuant to the terms herein, the Company shall be obligated to pay to the Representative its actual and accountable out
of pocket expenses related to the transactions contemplated herein then due and payable, including the fees and disbursements of
EGS up to $30,000 (provided, however, that such expense
cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).
(c) Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such
election or termination or failure to carry out the terms of this Agreement or any part hereof.
7.2 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, and the Prospectus contain the entire
understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules. Notwithstanding anything herein to the contrary,
the Investment Banking Agreement,
dated May 15, 2017 (“Investment Banking Agreement”), by and between the Company and the Representative, shall
continue to be effective and the terms therein, including, without limitation, Section 4(c) and Section 5 with respect to any future
offerings, shall continue to survive and be enforceable by the Representative in accordance with its terms, provided that, in the
event of a conflict between the terms of the Investment Banking Agreement and this Agreement, the terms of this Agreement shall
prevail.
7.3 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or e-mail attachment at the email address set forth on the signature pages attached hereto
at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the e-mail address as set forth
on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto.
7.4 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
7.5 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
7.6 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns.
7.7 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action,
suit or proceeding, any claim
that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions
of the Transaction Documents, then, in addition to the obligations of the Company under Article VI, the prevailing party in such
action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
7.8 Survival.
The representations and warranties contained herein shall survive the Closing and the Option Closing, if any, and the delivery
of the Securities.
7.9 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.
7.10 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
7.11 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents
and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy
at law would be adequate.
7.12 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day,
then such action may be taken
or such right may be exercised on the next succeeding Business Day.
7.13 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
7.14 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO
THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY
RIGHT TO TRIAL BY JURY.
(Signature Pages Follow)
If the foregoing correctly
sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in accordance
with its terms.
| |
Very truly yours, |
| |
|
| |
CYCLACEL PHARMACEUTICALS, INC. |
| |
|
|
| |
By: |
/s/ Spiro Rombotis |
| |
|
Name: |
Spiro Rombotis |
| |
|
Title: |
President & Chief Executive Officer |
| |
|
|
|
| |
Address for Notice: |
| |
200 Connell Drive, Suite 1500 |
| |
Berkeley Heights, NJ 07922 |
| |
Attention: Chief Executive Officer |
| |
|
| |
Copy to: |
| |
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. |
| |
666 Third Avenue |
| |
New York, New York 10017 |
| |
Facsimile: (212) 983-3115 |
| |
Attention: Joel I. Papernik, Esq. |
Accepted on the date first above written.
LADENBURG THALMANN & CO. INC.
As the Representative of the several
Underwriters listed on Schedule I
| By: |
/s/ Nicholas Stergis |
|
| |
Name: Nicholas Stergis |
|
| |
Title: Managing Director |
|
Address for Notice:
4400 Biscayne Boulevard,
14th Floor
Miami, Florida 33137
Attention: General Counsel
Copy to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Facsimile: (212) 401-4741
Attention: Michael Nertney
SCHEDULE I
Schedule
of Underwriters
| Underwriters | |
Closing
Shares | | |
Closing
Preferred Shares | | |
Closing
Warrants | | |
Closing
Purchase Price | |
| | |
| | |
| | |
| | |
| |
| Ladenburg Thalmann & Co. Inc. | |
| 2,164,000 | | |
| 8,872 | | |
| 6,600,000 | | |
$ | 12,276,000.00 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
| 2,164,000 | | |
| 8,872 | | |
| 6,600,000 | | |
$ | 12,276,000.00 | |
