Exhibit 1.1
IMMUNE PHARMACEUTICALS INC.
UNDERWRITING AGREEMENT
[ ],
2017
Maxim Group LLC
405 Lexington Avenue
New York, New York 10174
As Representative of the Underwriters
named on Schedule A hereto
Ladies and Gentlemen:
Immune Pharmaceuticals
Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein,
to issue and sell to the underwriters named in Schedule A hereto (the “Underwriters,” or each,
an “Underwriter”), for whom Maxim Group LLC is acting as representative (the “Representative”),
15,000 units (the “Units”), with each Unit consisting of one share of the Company’s Series E convertible preferred
stock, $0.0001 par value per share (the “Preferred Stock”) with a stated value of $1,080.00 per share
(each a “Share” and, collectively, the “Shares”) convertible at any time into shares of
the Company’s common stock, par value $0.0001 per share (the “Common Stock”) (the “Conversion
Shares”) and a warrant to purchase Common Stock (the “Warrants” and shares of Common Stock issuable
upon exercise of the Warrants (the “Warrant Shares”)). The Units will not be certificated and the shares of
Series E Preferred Stock and warrants comprising such Units are immediately separable and will be issued separately. Each Warrant
will have an initial exercise price of $[ ] per share of Common Stock. The Units, the Shares, the Conversion Shares, the Warrants
and the Warrant Shares are collectively referred to as the “Securities.”
The Company confirms
as follows its agreement with each of the Underwriters:
1. Agreement
to Sell and Purchase.
(a) Purchase
of Securities. On the basis of the representations, warranties and agreements of the Company contained herein and subject
to all the terms and conditions of this Agreement, the Company agrees to sell to the Underwriters, severally and not jointly,
and the Underwriters, severally and not jointly, agree to purchase from the Company, the Securities, at an aggregate purchase
price (prior to discount and commissions) of $1,000 per Share and Warrants (or $915 per Share and Warrants, net of discount and
commissions).
2. Delivery
and Payment.
(a) Closing.
Delivery of the Units shall be made to the Representative through the facilities of the Depository Trust Company (“DTC”)
for the respective accounts of the Underwriters against payment of the Purchase Price by wire transfer of immediately available
funds to the order of the Company. Such payment shall be made at 10:00 a.m., New York City time, on the third business day
(the fourth business day, should the offering be priced after 4:00 p.m., New York City Time) after the date of this Agreement
or at such time on such other date, not later than ten business days after such date, as may be agreed upon by the Company and
the Representative (such date is hereinafter referred to as the “Closing Date”).
(b) Electronic
Transfer. Electronic transfer of the Securities shall be made at the time of purchase in such names and in such denominations
as the Representative shall specify.
(c) Tax
Stamps. The cost of original issue tax stamps, if any, in connection with the issuance and delivery of the Securities by the
Company to the Underwriters shall be borne by the Company. The Company shall pay and hold each Underwriter and any subsequent
holder of the Securities harmless from any and all liabilities with respect to or resulting from any failure or delay in paying
United States federal and state and foreign stamp and other transfer taxes, if any, which may be payable or determined to be payable
in connection with the original issuance, sale and delivery to such Underwriter of the Securities.
3. Representations
and Warranties of the Company. The Company represents and warrants to, and covenants with, each of the Underwriters as follows:
(a) Compliance
with Registration Requirements. A registration statement on Form S-1 (Registration No. 333-220413) relating to the Securities,
including a preliminary prospectus and such amendments to such registration statement as may have been required prior to the date
of this Agreement, has been prepared by the Company under the provisions of the Securities Act of 1933, as amended (the “Act”),
and the rules and regulations (collectively referred to as the “Rules and Regulations”) of the Securities and
Exchange Commission (the “Commission”) thereunder, and has been filed with the Commission. Copies of such registration
statement and of each amendment thereto, if any, including the related preliminary prospectuses, heretofore filed by the Company
with the Commission have been delivered to the Underwriters. The term “Registration Statement” means such registration
statement on Form S-1 as amended at the time it becomes or became effective, including financial statements, all exhibits and
any information deemed to be included or incorporated by reference therein, including any information deemed to be included pursuant
to Rule 430A or Rule 430B of the Rules and Regulations, as applicable. If the Company files a registration statement to register
a portion of the Securities and relies on Rule 462(b) of the Rules and Regulations for such registration statement to become
effective upon filing with the Commission (the “Rule 462 Registration Statement”), then any reference
to the “Registration Statement” shall be deemed to include the Rule 462 Registration Statement, as amended from
time to time. The term “preliminary prospectus” as used herein means a preliminary prospectus as contemplated
by Rule 430 or Rule 430A of the Rules and Regulations included at any time as part of, or deemed to be part of or included
in, the Registration Statement. The term “Prospectus” means the final prospectus in connection with this offering
as first filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is required,
the form of final prospectus included in the Registration Statement at the effective date, except that if any revised prospectus
or prospectus supplement shall be provided to the Representative by the Company for use in connection with the Securities which
differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company
pursuant to Rule 424(b)), the term “Prospectus” shall also refer to such revised prospectus or prospectus supplement,
as the case may be, from and after the time it is first provided to the Representative for such use. Any reference herein to the
terms “amend”, “amendment” or “supplement” with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include: (i) the filing of any document under the Securities
Exchange Act of 1934, as amended, and together with the rules and regulations promulgated thereunder (collectively, the “Exchange
Act”) after the effective date of the Registration Statement, the date of such preliminary prospectus or the date of
the Prospectus, as the case may be, which is incorporated therein by reference, and (ii) any such document so filed.
(b) Effectiveness
of Registration. The Registration Statement, any Rule 462 Registration Statement and any post-effective amendment thereto
have been declared effective by the Commission under the Act or have become effective pursuant to Rule 462 of the Rules and Regulations.
The Company has responded to all requests, if any, of the Commission for additional or supplemental information. No stop order
suspending the effectiveness of the Registration Statement or any Rule 462 Registration Statement is in effect and no proceedings
for such purpose have been instituted or are pending or, to the knowledge of the Company, are threatened by the Commission.
(c) Accuracy
of Registration Statement. Each of the Registration Statement, any Rule 462 Registration Statement and any post-effective
amendment thereto, at the time it became effective, when any document filed under the Exchange Act was or is filed and at all
subsequent times, complied and will comply in all material respects with the Act and the Rules and Regulations, and did not and
will 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 not misleading. The Prospectus, as amended or supplemented, as of its date and at all
subsequent times when a prospectus is delivered or required (or, but for the provisions of Rule 172, would be required) by applicable
law to be delivered in connection with sales of Securities, complied and will comply in all material respects with the Act, the
Exchange Act and the Rules and Regulations, and did not or will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading, in the light of the circumstances under which they
were made. Each preliminary prospectus (including the preliminary prospectus or prospectuses filed as part of the Registration
Statement or any amendment thereto) complied when so filed in all material respects with Act, the Exchange Act and the Rules and
Regulations, and each preliminary prospectus and the Prospectus delivered to the Representative for use in connection with this
offering is identical to the electronically transmitted copies thereof filed with the Commission on EDGAR, except to the extent
permitted by Regulation S-T. The foregoing representations and warranties in this Section 3(c) do not apply to any statements
or omissions made in reliance on and in conformity with information relating to the Underwriters furnished in writing to the Company
by the Underwriters through the Representative specifically for inclusion in the Registration Statement or Prospectus or any amendment
or supplement thereto. For all purposes of this Agreement, the information set forth in the Prospectus under the caption “Underwriting”
in the third, ninth, tenth, thirteenth, fifteenth and sixteenth paragraphs, constitutes the only information (the “Underwriters’
Information”) relating to the Underwriters furnished in writing to the Company by the Underwriters through the Representative
specifically for inclusion in the preliminary prospectus, the Registration Statement or the Prospectus.
(d) Company
Not Ineligible Issuer. (i) At the time of filing the Registration Statement relating to the Securities and (ii) as of the
date of the execution and delivery of this Agreement (with such date being used as the determination date for purposes of this
clause (ii)), the Company was not and is not an “ineligible issuer” (as defined in Rule 405 of the Rules and Regulations).
(e) Disclosure
at the Time of Sale. As of the Applicable Time, neither (i) the Issuer General Use Free Writing Prospectus(es) (as defined
below) issued at or prior to the Applicable Time, the most recent preliminary prospectus related to this offering, and the information
included on Schedule II hereto, all considered together (collectively, the “General Disclosure Package”),
nor (ii) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package,
included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the General Disclosure Package based upon and in conformity with written information furnished
to the Company by the Underwriters through the Representative specifically for use therein, it being understood and agreed that
the only such information furnished by the Underwriters consists of the Underwriters’ Information.
As used in this subsection
and elsewhere in this Agreement:
“Applicable
Time” means [ ] (New York City Time) on [ ], 2017 or such other time as agreed by the Company
and the Representative.
“Issuer Free
Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Rules and
Regulations, relating to the Securities that (i) is required to be filed with the Commission by the Company, (ii) is
“a written communication that is a road show” within the meaning of Rule 433(d)(8)(i), whether or not required to
be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description
of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed
with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“Issuer General
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being specified in Schedule I hereto.
“Issuer Limited
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
(f) Issuer
Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the
Prospectus Delivery Period (as defined below), does not include any information that conflicts with the information contained
in the Registration Statement. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing
Prospectus based upon and in conformity with the Underwriters’ Information. If at any time following the issuance of an
Issuer Free Writing Prospectus there occurred an event or development as a result of which such Issuer Free Writing Prospectus
conflicted with the information contained in the Registration Statement relating to the Securities or included an untrue statement
of material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances
prevailing at that subsequent time, not misleading, the Company has promptly notified the Representative and has promptly amended
or supplemented, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission.
(g) Distribution
of Offering Material by the Company. The Company has not distributed and will not distribute, prior to the later of the Closing
Date and the completion of the Underwriters’ distribution of the Securities, any offering material in connection with the
offering or sale of the Securities, the Registration Statement, the preliminary prospectus, the Permitted Free Writing Prospectuses
reviewed and consented to by the Representative and included in Schedule I hereto, and the Prospectus. None of the Marketing
Materials, as of their respective issue dates and at all subsequent times through the Prospectus Delivery Period (as defined below),
include any information that conflicts with the information contained in the Registration Statement. If at any time following
the issuance of any Marketing Material there occurred an event or development as a result of which such Marketing Material conflicted
with the information contained in the Registration Statement relating to the Securities or included an untrue statement of material
fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing
at that subsequent time, not misleading, the Company has promptly notified the Representative and has promptly amended or supplemented,
at its own expense, such Marketing Material to eliminate or correct such conflict, untrue statement or omission.
(h) Due
Incorporation; Subsidiaries. Each of the Company and its Subsidiaries is, and at the Closing Date will be, a corporation duly
organized, validly existing and in good standing under the laws of its jurisdiction of incorporation (to the extent the concept
of “good standing” or such equivalent concept exists under the laws of such jurisdiction). Each of the Company and
its Subsidiaries has, and at the Closing Date will have, full corporate power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its business as described in the Registration Statement
and the Prospectus. Each of the Company and its Subsidiaries is, and at the Closing Date will be, duly licensed or qualified to
do business in and in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing or qualification necessary, except where the failure
so to qualify or to be in good standing would not reasonably be expected to have a material adverse effect on the business, properties,
assets, business prospects, condition (financial or otherwise), results of operations or capitalization of the Company and its
subsidiaries, taken as a whole, (a “Material Adverse Effect”). The Company has no “significant subsidiaries”
(as such term is defined in Rule 1-02 of Regulation S-X). All of the issued share capital or other equity interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid and (in the case of subsidiaries organized under
the laws of any state of the United States, non-assessable), and are owned by the Company directly or indirectly through subsidiaries,
free and clear of all liens, charges, encumbrances, security interests, restrictions on voting or transfer, equities or any other
claims of any third parties.
(i) Capitalization.
The issued and outstanding share capital of the Company is as set forth in the Registration Statement, the General Disclosure
Package and the Prospectus. The Common Stock issued and outstanding and any other outstanding share capital of the Company have
been, and the Securities will be, duly authorized, validly issued, fully paid and nonassessable and will not be subject to any
preemptive, first refusal, or similar right. The description of the Securities included in the Registration Statement, the General
Disclosure Package and the Prospectus are now, and at the Closing Date will be, complete and accurate in all material respects.
Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the Company does not have
outstanding, and at the Closing Date will not have outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or commitments to issue or sell, any securities of the
Company or any such warrants, convertible securities or obligations. 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 shareholders. Upon the issuance and delivery pursuant to the terms
of this Agreement, the Underwriters will acquire good and marketable title to the Securities, free and clear of any liens, charge,
claim, encumbrance, pledge, security interest, defect or other restriction or equity of any kind whatsoever.
(j) Financial
Statements. The financial statements (including the related notes thereto) and schedules included in the Registration Statement,
the General Disclosure Package, the Prospectus and the SEC Reports present fairly in all material respects the financial condition
of the Company and its consolidated subsidiaries as of the respective dates thereof and their results of operations and cash flows
for the respective periods covered thereby, all in conformity with on a consistent basis throughout the entire period involved.
The selected financial data and the summary financial information included in the Registration Statement, the General Disclosure
Package, the Prospectus and the SEC Reports present fairly in all material respects the information shown therein and have been
compiled on a basis consistent with that of the financial statements included therein and the books and records of the Company
and its subsidiaries. No other financial statements, schedules or reconciliations of “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the Commission) of the Company are required by the Act or the Rules and
Regulations to be included in the Registration Statement, the General Disclosure Package, the Prospectus or the SEC Reports.
(k) Independent
Accountants. BDO USA LLP (the “Accountants”), who certified the financial statements and supporting schedules
of the Company and its subsidiaries included in the Registration Statement, the General Disclosure Package and the Prospectus,
are independent accountants as required by the Act, the Exchange Act and the Rules and Regulations and by the rules of the Public
Company Accounting Oversight Board (United States) (the “PCAOB”) and, to the Company’s knowledge, such
accountants are not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002.
(l) No
Material Adverse Changes. Since the respective dates as of which information is given in the Registration Statement and the
Prospectus and prior to the Closing Date, except as set forth in the Registration Statement, the General Disclosure Package and
the Prospectus, (i) there has not been a material adverse change, or any development that would be expected to result in a material
adverse change, in the business, properties, assets, business prospects, condition (financial or otherwise), results of operations
or capitalization of the Company and its subsidiaries, taken as a whole, arising for any reason whatsoever (a “Material
Adverse Change”), (ii) the Company has not incurred any material liabilities or obligations, direct or contingent, nor
has it entered into any material transactions not in the ordinary course of business, other than pursuant to this Agreement and
the transactions referred to herein, (iii) the Company has not paid or declared any dividends or other distributions of any kind
on any class of its capital stock, and (iv) the Company has not altered its method of accounting.
(m) Investment
Company. The Company is not, and, after giving effect to the issuance and sale of the Securities and the use of the proceeds
therefrom as described in the General Disclosure Package and the Prospectus under the caption "Use of Proceeds," will
not be, required to register as an “investment company” under the Investment Company Act of 1940, as amended, and
the rules and regulations of the Commission promulgated thereunder.
(n) Litigation.
Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there are no actions,
suits or proceedings pending, or to the Company’s knowledge, threatened against or affecting, (i) the Company or any of
its subsidiaries, or (ii) any of their respective officers in their capacity as such, before or by any foreign, federal or state
court, commission, regulatory body, including, but not limited to, the Financial Industry Regulatory Authority, Inc. (“FINRA”),
the NYSE American, administrative agency or other governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding could reasonably be expected to (i) have a Material Adverse Effect, individually or in the aggregate, or (ii) prevent
or materially interfere with the consummation of the transactions contemplated hereby or the performance by the Company of its
obligations hereunder. The Company has not received any notice of proceedings relating to the revocation or modification of any
material authorization, approval, order, license, certificate, franchise or permit. There are no pending investigations known
to the Company involving the Company by any governmental agency having jurisdiction over the Company or its business or operations.
(o) Compliance
with Laws and Regulations and Performance of Obligations and Contracts. The agreements, instruments and other documents described
in the Registration Statement, the General Disclosure Package, the Prospectus and the SEC Reports conform to the descriptions
thereof contained therein, and there are no agreements, instruments or other documents required by the applicable provisions of
the Act, the Rules and Regulations or the Exchange Act to be described in the Registration Statement, the General Disclosure Package
or the Prospectus or to be filed with the Commission as exhibits to the Registration Statement that have not been so described
or filed. All such documents and Contracts (as defined below) described in the Registration Statement, the General Disclosure
Package and the Prospectus or filed as an exhibit to the Registration Statement were duly authorized, executed and delivered by
the Company, constitute valid and binding agreements of the Company and are enforceable against the Company in accordance with
the respective terms thereof, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors’ rights generally or general equitable principles. Each of the Company and
its subsidiaries has (i) complied in all material respects with all laws, regulations and orders applicable to it or its business
and is not in breach or default of any approval, consent, waiver, authorization, exemption, permission, endorsement or license
granted by court, administrative agency or other governmental or regulatory body or stock exchange authorities and (ii) performed
all obligations required to be performed by it, and is not in default under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease or other agreement or instrument (individually, a “Contract”
and collectively, “Contracts”) to which it is a party or by which its property is bound or affected, except
for such defaults, if any, as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect
and would not prevent or materially interfere with the consummation of the transactions contemplated hereby. To the knowledge
of the Company and its subsidiaries, no other party under any Contract to which it is a party is in default in any respect thereunder
or has given written or oral notice to the Company or its subsidiaries or any of their respective officers or directors of such
other party’s intention to terminate, cancel or refuse to renew any Contract. Each of the Company and its subsidiaries is
not now in violation of any provision of its constitution. The disclosures included in the Registration Statement, the General
Disclosure Package and the Prospectus concerning the effects of federal, state, local and foreign laws, rules and regulations
on the business of the Company as currently conducted and as proposed to be conducted are correct in all material respects.
(p) No
Consent of Governmental Body Needed. No consent, approval, authorization, license, registration, qualification or order of,
or any filing or declaration with, any court or arbitrator or governmental or regulatory authority, agency or body is required
in connection with the authorization, issuance, transfer, sale or delivery of the Securities by the Company, in connection with
the execution, delivery and performance of this Agreement by the Company or in connection with the taking by the Company of any
action contemplated hereby, except for the filing of the Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and delivery of this Agreement and as have been made or obtained
under the Act, the Rules and Regulations, and such as may be required under state securities or Blue Sky laws or the by-laws and
rules of FINRA in connection with the purchase and distribution by the Underwriters of the Securities to be sold by the Company.
(q) Agreements
Duly Authorized. The Company has full corporate power and authority to enter into this Agreement, the Warrants and all other
agreements, documents, certificates and instruments required to be delivered pursuant to this Agreement. The Company has duly
and validly authorized this Agreement, the Warrants and each of the transactions contemplated thereby. This Agreement and the
Warrants have been duly authorized, executed and delivered by the Company and each such document constitutes a valid and binding
agreement of the Company enforceable against the Company in accordance with the terms hereof, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally
or general equitable principles. When issued, the Warrants will constitute the legal, valid and binding obligations of the Company,
including to issue and sell, upon exercise thereof and payment of the respective exercise prices therefor, the number and type
of securities of the Company called for thereby in accordance with the terms thereof, and all such warrants are enforceable against
the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally or subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law), and except as enforceability of any indemnification
or contribution provision may be limited under federal or state securities laws.
(r) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the Warrants and the consummation
of the transactions contemplated hereby, and the application of the net proceeds from the offering and sale of the Securities
to be sold by the Company in the manner set forth in the General Disclosure Package and the Prospectus under “Use of Proceeds”
do not and will not (i) violate the constitution of the Company or (ii) result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company pursuant to the terms or provisions of, or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or give any other party a right to terminate any of its obligations
under, or result in the acceleration of any obligation under any Contract to which the Company is a party or by which the Company
or any of its properties is bound or affected, except for such liens, breaches, violations, or defaults that would not, individually
or in the aggregate, result in a Material Adverse Effect or prevent or materially interfere with the consummation of the transactions
contemplated hereby, (iii) violate or conflict with any judgment, ruling, decree, order, law, statute, rule or regulation or any
approval, consent, waiver, authorization, exemption, permission, endorsement or license granted by of any court or other governmental
agency or body applicable to the business or properties of the Company.
(s) [Reserved].
(t) Title
to Real and Personal Property. The Company and its subsidiaries have good and marketable title to all properties and assets
described in the Registration Statement, the General Disclosure Package and the Prospectus as being owned respectively by them,
in each case, free and clear of all liens, charges, encumbrances or restrictions, except (a) as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus, or (b) do not, individually or in the aggregate, materially affect
the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any
of its subsidiaries. The Company and its subsidiaries have valid, subsisting and enforceable leases for the properties described
in the General Disclosure Package and the Prospectus as leased by them, with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such properties by the Company and its subsidiaries.
(u) [Reserved].
(v) Statistical
and Market Data. All statistical or market-related data included in the Registration Statement, the General Disclosure Package
and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and the Company
has obtained the written consent to the use of such data from such sources to the extent required.
(w) No
Price Stabilization or Manipulation. Neither the Company nor, to its knowledge, any of its directors, officers or controlling
persons, has taken, directly or indirectly, any action intended to cause or result in, or which might reasonably be expected to
cause or result in, or which has constituted, stabilization or manipulation, under the Act or otherwise, of the price of any security
of the Company to facilitate the sale or resale of the Securities.
(x) No
Registration Rights. No holder of securities of the Company has rights to register any securities of the Company because of
the filing of the Registration Statement or the Prospectus or the offering of the Securities, except for rights that have been
duly waived by such holder or have expired.
(y) Exchange
Act and Stock Exchange Listing. Prior to the Closing Date, the Common Stock is registered pursuant to Section 12(b) or 12(g)
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 Conversion Shares have been approved for listing on the Nasdaq
Capital Market, subject to official notice of issuance.
(z) Labor
Matters. Neither the Company nor any of its subsidiaries is involved in any labor dispute except, where the dispute would
not, individually or in the aggregate, have a Material Adverse Effect, nor, to the knowledge of the Company, is any such dispute
threatened.
(aa) No
Unlawful Payments. Neither the Company nor any of its subsidiaries, nor any of their respective officers, directors or affiliates,
nor, to the knowledge of the Company, any of their respective agents, employees, representatives or other persons acting on behalf
of the Company or its subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization
of any direct or indirect unlawful payment of corporate funds or benefit to any “foreign official”, as defined in
the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or any political party or party official
or candidate for political office; (iii) violated or is in violation of any provision of the FCPA, the U.K. Bribery Act 2010,
the Commonwealth Criminal Code Act 1995 or any applicable law or regulation implementing the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions, or violated any other applicable anti-bribery or anti-corruption
laws; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit,
including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
The Company has instituted, maintained and enforced, and will continue to maintain and enforce policies and procedures intended
to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
(bb) Compliance
with Anti-Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act and the applicable money laundering
statutes of all jurisdictions in which the Company and its subsidiaries conduct business, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued, administered or enforced thereunder by any governmental or
regulatory agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator against the Company or its subsidiaries with respect to
the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(cc) No
Conflicts with Sanctions Laws. Neither the Company nor any of its subsidiaries, nor any of their respective directors, officers
or affiliates, nor, to the knowledge of the Company, any of their respective agents, employees, representatives or other persons
acting on behalf of the Company or its subsidiaries, is currently the subject of any sanctions administered or enforced by the
U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”)
or the U.S. Department of State and including, without limitation, the designation as a “specially designated national”
or “blocked person”), the United Nations Security Council, the European Union or other relevant sanctions authority
that corresponds to sanctions imposed by OFAC, the U.S. Department of State, the United Nations Security Council or the European
Union (collectively, “Sanctions”), nor is the Company or any of its subsidiaries located, organized or resident
in a country or territory that is the subject or the target of Sanctions, including, without limitation, Cuba, Iran, North Korea,
Sudan and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds
of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that,
at the time of such funding or facilitation, is the subject or the target of Sanctions, (ii) to fund or facilitate any activities
of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including
any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past
five years, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage
in, any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target
of Sanctions or with any Sanctioned Country.
(dd) Taxes.
The Company and its subsidiaries have filed all material federal, state and foreign income and franchise tax returns that
are required to be filed by them and have paid all taxes required to be filed or paid by them and, if due and payable, any related
or similar assessment, fine or penalty levied against them, except for such taxes, assessments, fines or penalties, if any, currently
being contested in good faith by appropriate actions and as to which adequate reserves have been established. The Company has
made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 3(j) hereof in respect
of all material federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company
has not been finally determined. The Company and its subsidiaries are not aware of any material claims against them by any taxing
authority in relation to the filing of tax returns or the payment of required taxes.
(ee) Insurance.
The Company and its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company
believes are adequate for the conduct of their business and the value of their properties and is customary for companies engaged
in similar industries, and all such insurance is in full force and effect. The Company has no reason to believe that it and its
subsidiaries will not be able to (i) renew their existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate to conduct their business as currently conducted
or proposed to be conducted and at a cost that would not, individually or in the aggregate, result in a Material Adverse Effect.
Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has
applied.
(ff) Defined
Benefit Plans. The Company has not maintained or contributed to a defined benefit plan as defined in Section 3(35) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). No plan maintained or contributed
to by the Company that is subject to ERISA (an “ERISA Plan”) (or any trust created thereunder) has engaged
in a “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1986, as amended (the “Code”) that could subject the Company to any material tax penalty on
prohibited transactions and that has not adequately been corrected. Each ERISA Plan is in compliance in all material respects
with all reporting, disclosure and other requirements of the Code and ERISA as they relate to such ERISA Plan, except for any
noncompliance which would not result in the imposition of a material tax or monetary penalty. With respect to each ERISA Plan
that is intended to be “qualified” within the meaning of Section 401(a) of the Code, either (i) a determination
letter has been issued by the Internal Revenue Service stating that such ERISA Plan and the attendant trust are qualified thereunder,
or (ii) the remedial amendment period under Section 401(b) of the Code with respect to the establishment of such ERISA Plan
has not ended and a determination letter application will be filed with respect to such ERISA Plan prior to the end of such remedial
amendment period. The Company has never completely or partially withdrawn from a “multiemployer plan,” as defined
in Section 3(37) of ERISA.
(gg) Title
to Intellectual Property. The Company and each of its subsidiaries owns or possesses or has valid rights or licenses to use
and practice all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations,
copyrights, works of authorship, licenses, inventions, trade secrets, technology, know-how, and similar rights (“Intellectual
Property”) necessary for the conduct of the business of the Company and its subsidiaries as currently carried on and
as described in the Registration Statement, the General Disclosure Package and the Prospectus. To the knowledge of the Company,
no action or use by the Company or any of its subsidiaries will involve or give rise to any infringement of, or license or similar
fees for, any Intellectual Property of others, except where such action, use, license or fee is not reasonably likely to result
in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice alleging any such infringement
or fee, nor is the Company or any of its subsidiaries presently a party in any proceeding in which the Company’s or any
of its subsidiaries’ rights or licenses to use or practice such Intellectual Property have been challenged or the validity
or enforceability of such Intellectual Property has been challenged, except for the normal filing and prosecuting of any related
Intellectual Property applications before applicable Intellectual Property offices or agencies.
(hh) [Reserved].
(ii) [Reserved].
(jj) Related
Party Transactions. There are no business relationships or related party transactions involving the Company or any other person
required to be described in the General Disclosure Package and the Prospectus that have not been described. Without limiting the
generality of the immediately preceding sentence, no relationship, direct or indirect, exists between or among the Company on
the one hand, and the directors, officers, stockholders, customers or suppliers of the Company on the other hand, that is required
to be described in the General Disclosure Package and the Prospectus and that is not so described. The Company has not, directly
or indirectly, extended or maintained credit, arranged to extend credit, or renewed any extension of credit, in the form of a
personal loan, to or for any director or executive officer of the Company, or to or for any family member or affiliate of any
director or executive officer of the Company in violation of applicable laws, including Section 13(k) of the Exchange Act.
(kk) Environmental
Matters. Each of the Company and its subsidiaries (i) is in compliance in all material respects with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”),
(ii) except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, has received
all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its businesses and (iii)
is in compliance in all material respects with all terms and conditions of any such permit, license or approval.
(ll) Controls
and Procedures.
(i) Disclosure
Controls and Procedures. Except as disclosed in the SEC Reports (as defined herein), the Company has established and maintains
disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act), that (A)
are designed to ensure that material information relating to the Company is made known to the Company’s principal executive
officer and its principal financial officer by others within the Company and its subsidiaries; (B) provide for the periodic evaluation
of the effectiveness of such disclosure controls and procedures, commencing as of the end of the period covered by the Company’s
most recent annual or semi-annual report; and (C) are effective in all material respects to perform the functions for which they
were established.
(ii) Internal
Control Over Financial Reporting and Internal Accounting Controls. Except as disclosed in the SEC Reports (as defined herein),
the Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) that complies in all material respects with the requirements of the Exchange Act and has been designed by the Company’s
principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.
generally accepted accounting principles. The Company’s internal control over financial reporting is effective and the Company
is not aware of any material weakness (as defined in Rule 1-02 of Regulation S-X of the Commission) in its internal control over
financial reporting.
(iii) No
Material Weakness in Internal Controls. Since the date of the latest audited financial statements included or incorporated
by reference in the Registration Statement, the General Disclosure Package and the Prospectus, there has been no change in the
Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting. The Company is not aware of (x) any significant deficiency
in the design or operation of its internal control over financial reporting which is reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report financial data or any material weaknesses in its internal controls,
except as disclosed in the SEC Reports (as defined herein), the Registration Statement, the General Disclosure Package and the
Prospectus, or in any document incorporated by reference therein, since the end of the Company’s most recent audited fiscal
year; or (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the
Company’s internal controls.
(mm) Off-Balance
Sheet Transactions. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus,
there are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), or any other
relationships with unconsolidated entities or other persons, that may have a material current or future effect on the Company’s
financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources,
or significant components of revenues or expenses.
(nn) Audit
Committee. The Company’s Board of Directors has validly appointed an audit committee whose composition satisfies, and
the Board of Directors and/or the audit committee has adopted a charter that satisfies the requirements of, the Nasdaq Capital
Market. The audit committee has reviewed the adequacy of its charter within the past twelve months. Except as set forth in the
SEC Reports (as defined herein), neither the Board of Directors nor the Audit Committee is aware of (i) any significant deficiency
in the design or operation of the Company’s internal control over financial reporting which is reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial data or any material weakness in the Company’s
internal controls; or (ii) any fraud, whether or not material, that involves management or other employees of the Company who
have a significant role in the Company’s internal controls.
(oo) Sarbanes-Oxley.
Except as set forth in the SEC Reports (as defined herein), the Company and its Affiliates are in 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 has not, in violation of the Sarbanes-Oxley Act of 2002, directly or indirectly, extended or maintained credit,
arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any director or
executive officer of the Company.
(pp) Accurate
Disclosure. The statements included in the Registration Statement, the General Disclosure Package and the Prospectus under
the captions “Risk Factors,” “Business—Contact Research Organizations”, “Business—Environmental
Matters”, “Business—Government Regulation”, “Description of Securities We are Offering,” insofar
as such statements contain descriptions of the terms of statutes, rules, regulations, legal or governmental proceedings, the Company’s
constitution provisions or legal conclusions, are a fair and accurate summary in all material respects, of the matters referred
to therein.
(qq) Clinical
Trials. The clinical, pre-clinical and other studies and tests conducted by or on behalf of or sponsored by the Company or
its subsidiaries that are described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus
were and, if still pending, are being conducted in accordance with all statutes, laws, rules and regulations, as applicable (including,
without limitation, those administered by the FDA or by any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA). The descriptions of the results of such studies and tests that are
described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus are accurate and complete
in all material respects and fairly present the published data derived from such studies and tests, and each of the Company and
its subsidiaries has no knowledge of other studies or tests the results of which are materially inconsistent with or otherwise
call into question the results described or referred to in the Registration Statement, the General Disclosure Package and the
Prospectus. Neither the Company nor its subsidiaries has received any notices or other correspondence from the FDA or any other
foreign, federal, state or local governmental or regulatory authority performing functions similar to those performed by the FDA
with respect to any ongoing clinical or pre-clinical studies or tests requiring the termination or suspension of such studies
or tests. For the avoidance of doubt, the Company makes no representation or warranty that the results of any studies, tests or
preclinical or clinical trials conducted by or on behalf of the Company will be sufficient to obtain governmental approval from
the FDA or any foreign, state or local governmental body exercising comparable authority.
(rr) Regulatory
Filings. Except as would not be reasonably expected to result in a Material Adverse Effect, neither the Company nor any of
its subsidiaries has failed to file with the applicable regulatory authorities (excluding the FDA or any foreign, federal, state
or local governmental or regulatory authority performing functions similar to those performed by the FDA) any filing, declaration,
listing, registration, report or submission that is required to be so filed. Neither the Company nor any of its subsidiaries has
failed to file with the FDA or any foreign, federal, state or local governmental or regulatory authority performing functions
similar to those performed by the FDA, any filing, declaration, listing, registration, report or submission that is required to
be so filed. All such filings, declarations, listings, registrations, reports or submissions were in material compliance with
applicable laws when filed; all such filings, declarations, listings, registrations, reports or submissions were, when filed,
timely, complete and accurate in all material respects and not misleading in any material respect (or were corrected or supplemented
by a subsequent submission); and no deficiencies have been asserted by any applicable regulatory authority (including, without
limitation, the FDA or any foreign, federal, state or local governmental or regulatory authority performing functions similar
to those performed by the FDA) with respect to any such filings, declarations, listings, registrations, reports or submissions.
(ss) Licenses
and Permits. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the Company and its
subsidiaries hold, and are operating in compliance with, such permits, licenses, franchises, registrations, exemptions, approvals,
authorizations and clearances of any other governmental authorities (including, without limitation, the FDA) required for the
conduct of its business as currently conducted (collectively, the “Permits”), and all such Permits are in full
force and effect; and (ii) the Company and its subsidiaries have fulfilled and performed all of their obligations with respect
to the Permits, and, to the Company’s knowledge, no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other impairment of the rights of the holder of any Permit. All applications,
notifications, submissions, information, claims, reports and statistics, and other data and conclusions derived therefrom, utilized
as the basis for any and all requests for a Permit from the FDA or other governmental authority relating to the Company or a subsidiary,
its business and its products, when submitted to the FDA or other governmental authority by or on behalf of the Company or a subsidiary,
were true, complete and correct in all material respects (or were corrected or supplemented by a subsequent submission). Any necessary
or required updates, changes, corrections or modification to such applications, notifications, submissions, information, claims,
reports and statistics and other data have been submitted to the FDA or other governmental authority, except as would not, individually
or in the aggregate, have a Material Adverse Effect. The Company and its subsidiaries have not received any notification, correspondence
or any other written or oral communication, including notification of any pending or, to the Company’s knowledge, threatened
claim, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental authority, including,
without limitation, the FDA or the United States Drug Enforcement Administration (“DEA”), of potential or actual
material non-compliance by, or material liability of, the Company or a subsidiary under any Permits. To the Company’s knowledge,
there are no facts or circumstances that would reasonably be expected to give rise to any material liability of the Company or
a subsidiary under any Permits.
(tt) Compliance
with Certain Regulatory Matters. The Company, its subsidiaries and their respective officers and directors and, to the Company’s
knowledge, their respective employees and agents have operated and currently are in compliance in all material respects with applicable
statutes and implementing regulations administered or enforced by the FDA, DEA, or any other federal, state, local, or foreign
governmental authority, including, without limitation, the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)); the Civil
Monetary Penalties Law (42 U.S.C. § 1320a-7a); the civil False Claims Act (31 U.S.C. §§ 3729 et seq.); all applicable
federal, state, local and foreign criminal laws relating to health care fraud and abuse, including but not limited to the administrative
False Claims Law (42 U.S.C. § 1320a-7b(a)); 18 U.S.C. Sections 286 and 287; the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. § 1320d et seq.), as amended by the Health Information Technology for Economic and Clinical Health
Act (42 U.S.C. §§ 17921 et seq.); the exclusion laws (42 U.S.C. § 1320a-7); the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. §§ 301 et seq.); Medicare (Title XVIII of the Social Security Act); Medicaid (Title XIX of the Social
Security Act); the Patient Protection and Affordable Care Act of 2010 (Pub. Law 111-148), as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. Law 111-152); and the regulations promulgated pursuant to such laws; and any other applicable
local, state, federal or foreign law or regulation. Neither the Company nor its subsidiaries are a party to, and do not have any
ongoing reporting obligations pursuant to, any corporate integrity agreement, deferred prosecution agreement, monitoring agreement,
consent decree, settlement order, plan of correction or similar agreement imposed by any governmental authority. Neither the Company,
its subsidiaries nor, to the knowledge of the Company, any of their respective directors, officers, employees or agents has been
debarred, excluded or suspended from participation in or receiving payment from any federal, state or local government health
care program, or is subject to an audit, investigation, proceeding, or other similar action by any governmental authority that
could reasonably be expected to result in debarment, suspension, or exclusion.
(uu) Absence
of Certain Regulatory Actions. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus,
or as would not, individually or in the aggregate, have a Material Adverse Effect, the Company and its subsidiaries have not had
any product or manufacturing site (whether Company-owned or that of a contract manufacturer for Company products or product candidates)
subject to a governmental authority (including, without limitation, the FDA) shutdown or import or export prohibition, nor received
any FDA Form 483 or other governmental authority notice of inspectional observations, “warning letters,” “untitled
letters,” requests to make changes to the Company products, processes or operations, or similar correspondence or notice
from the FDA or other governmental authority alleging or asserting material noncompliance with any applicable laws. To the Company’s
knowledge, neither the FDA nor any other governmental authority has threatened such action. Neither the Company nor its subsidiaries
have received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other
action from any court, arbitrator, Regulatory Agency, or other governmental authority or third party alleging that any product
operation or activity is in violation of any health care laws nor, to the Company’s knowledge, is any such claim, action,
suit, proceeding, hearing, enforcement, investigation, arbitration or other action threatened.
(vv) SEC
Reports. Except for the Annual Report on Form
10-K for the fiscal year ended December 31, 2016 and the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2017, The Company has filed all reports, schedules, forms, statements or other documents required to be filed by the Company
under the Act or Exchange Act, during the twelve months preceding the date hereof (the foregoing materials filed during such twelve-month
period, including the exhibits thereto and documents incorporated by reference therein, 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 filing or amendment dates, the SEC Reports complied in all material respects with
the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder; and as of their respective
filing or amendment dates, the SEC Reports did not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
All SEC Reports are readily available and accessible on the Company’s website. The Company has never been an issuer subject
to Rule 144(i) under the Act.
(ww) [Reserved].
(xx) [Reserved].
(yy) No
Rating. Neither the Company nor any of its subsidiaries has debt securities or preferred stock that is rated by any “nationally
recognized statistical rating organization” (as such term is defined in Section 3(a)(62) of the Exchange Act).
(zz) No
Broker’s Fees. The Company is not a party to any contract, agreement or understanding with any person (other than this
Agreement) that would give rise to a valid claim against the Company or the Underwriters for a brokerage commission, finder’s
fee or like payment in connection with the offering and sale of the Securities.
(aaa) No
Immunity. Neither the Company nor any of its subsidiaries nor any of its or their respective properties or assets has any
immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution or otherwise) under the laws of the United States; and, to the extent that the Company,
any subsidiary of the Company or any of their respective properties or assets may have or may hereafter become entitled to any
such right of immunity in any such court in which proceedings may at any time be commenced, each of the Company and its subsidiaries
waives or will waive such right to the extent permitted by law and has consented to such relief and enforcement as provided in
Section 8 of this Agreement.
(bbb) Insolvency.
No event of insolvency has occurred in relation to the Company or its subsidiaries, nor is there, nor will there be at the
Closing Date, any act which has occurred or, to the best of the Company's knowledge, is anticipated to occur which is likely to
result in an event of insolvency in relation to the Company or its subsidiaries.
(ccc) Shareholder
Approvals. The Company has obtained all shareholder or other third party approvals which are required to be obtained under
applicable law in connection with the issuance, transfer, sale or delivery of the Securities by the Company or in connection with
the execution, delivery and performance of this Agreement.
(ddd) No
Integration. Neither the Company, its officers and directors, nor any of their affiliates has, prior to the date hereof, directly
or indirectly, made any offer or sale of any securities which are required to be “integrated” pursuant to the Act
or the Rules and Regulations with the offer and sale of the Securities pursuant to the Registration Statement. Except as disclosed
in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company, its officers and directors,
nor any of its affiliates has sold or issued any security of the Company during the six-month period preceding the date of the
Prospectus, including but not limited to any sales pursuant to Rule 144A, Regulation D or Regulation S under the Act, other than
common stock issued pursuant to employee benefit plans, qualified stock option plans or employee compensation plans or pursuant
to outstanding options, rights or warrants as described in the Registration Statement, the General Disclosure Package and the
Prospectus.
4. Agreements
of the Company. The Company agrees with the Underwriters as follows:
(a) Amendments
and Supplements to Registration Statement. The Company shall not, either prior to any effective date or thereafter during
such period as the Prospectus is required by law to be delivered (whether physically or through compliance with Rule 172 of the
Rules and Regulations or any similar rule) (the “Prospectus Delivery Period”) in connection with sales of the
Securities by an Underwriter or dealer, amend or supplement the Registration Statement, the General Disclosure Package or the
Prospectus, unless a copy of such amendment or supplement thereof shall first have been submitted to the Representative within
a reasonable period of time prior to the filing or, if no filing is required, the use thereof and the Representative shall not
have objected thereto in good faith.
(b) Amendments
and Supplements to the Registration Statement, the General Disclosure Package, and the Prospectus and Other Securities Act Matters.
During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as
now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act so far as
necessary to permit the continuance of sales of or dealings in the Securities as contemplated by the provisions hereof, the General
Disclosure Package, the Registration Statement and the Prospectus. If, during the Prospectus Delivery Period, any event or development
shall occur or condition exist as a result of which the General Disclosure Package or the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading,
or if it shall be necessary to amend or supplement the General Disclosure Package or the Prospectus in order to make the statements
therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading,
or if in the opinion of the Representative it is otherwise necessary to amend or supplement the Registration Statement, the General
Disclosure Package or the Prospectus, or to file a new registration statement containing the Prospectus, in order to comply with
the Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules, including in connection with the delivery of the
Prospectus, the Company agrees to (i) promptly notify the Representative of any such event or condition and (ii) promptly prepare
(subject to Section 4(a) and 4(f) hereof), file with the Commission (and use its best efforts to have any amendment to the Registration
Statement or any new registration statement to be declared effective) and furnish at its own expense to the Representative (and,
if applicable, to dealers), amendments or supplements to the Registration Statement, the General Disclosure Package or the Prospectus,
or any new registration statement, necessary in order to make the statements in the General Disclosure Package or the Prospectus
as so amended or supplemented, in the light of the circumstances then prevailing or under which they were made, as the case may
be, not misleading, or so that the Registration Statement or the Prospectus, as amended or supplemented, will comply with the
Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules or any other applicable law.
(c) Notifications
to the Underwriters. The Company shall use its best efforts to cause the Registration Statement to become effective, and shall
notify the Representative promptly, and shall confirm such advice in writing, (i) when any post-effective amendment to the Registration
Statement has become effective and when any post-effective amendment thereto becomes effective, (ii) of any request by the Commission
for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (iii) of the commencement
by the Commission or by any state securities commission of any proceedings for the suspension of the qualification of any of the
Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose,
including, without limitation, the issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat thereof, (iv) of the happening of any event during
the Prospectus Delivery Period that in the judgment of the Company makes any statement made in the Registration Statement or the
Prospectus misleading (including by omission) or 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 in which they are made, not misleading
(including by omission), and (v) of receipt by the Company or any representative of the Company of any other communication from
the Commission relating to the Company, the Registration Statement, any preliminary prospectus or the Prospectus. If at any time
the Commission shall issue any order suspending the effectiveness of the Registration Statement, the Company shall use best efforts
to obtain the withdrawal of such order at the earliest possible moment. The Company shall comply with the provisions of and make
all requisite filings with the Commission pursuant to Rules 424(b), 430A, 430B and 462(b) of the Rules and Regulations and
to notify the Representative promptly of all such filings.
(d) Amendment
to Certificate of Designation of Preferred Stock. The Company shall not issue any shares of Preferred Stock except as required
pursuant to this Agreement without the prior written consent of the Representative.
(e) Executed
Registration Statement. The Company shall furnish to the Representative, without charge, one signed copy of the Registration
Statement, and of any post-effective amendment thereto, including financial statements and schedules, and all exhibits thereto,
and shall furnish to the Representative, without charge, a copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules but without exhibits.
(f) Undertakings.
The Company shall comply with all the provisions of any undertakings contained and required to be contained in the Registration
Statement.
(g) Prospectus.
The Company shall prepare the Prospectus in a form approved by the Representative and shall file such Prospectus with the
Commission pursuant to Rule 424(b) of the Rules and Regulations with a filing date not later than the second business day following
the execution and delivery of this Agreement. Promptly after the effective date of the Registration Statement, and thereafter
from time to time during the period when the Prospectus is required (or, but for the provisions of Rule 172 under the Act, would
be required) to be delivered, the Company shall deliver to the Representative, without charge, as many copies of the Prospectus
and any amendment or supplement thereto as the Representative may reasonably request. The Company consents to the use of the Prospectus
and any amendment or supplement thereto by the Representative and by all dealers to whom the Securities may be sold, both in connection
with the offering or sale of the Securities and for any period of time thereafter during the Prospectus Delivery Period. If, during
the Prospectus Delivery Period any event shall occur that in the judgment of the Company or counsel to the Underwriters should
be set forth in the Prospectus in order to make any statement therein, in the light of the circumstances under which it was made,
not misleading (including by omission), or if it is necessary to supplement or amend the Prospectus to comply with law, the Company
shall forthwith prepare and duly file with the Commission an appropriate supplement or amendment thereto, and shall deliver to
the Representative, without charge, such number of copies thereof as the Representative may reasonably request.
(h) Permitted
Free Writing Prospectuses. The Company represents and agrees that it has not made and, unless it obtains the prior consent
of the Representative, will not make, any offer relating to the Securities that would constitute a “free writing prospectus”
as defined in Rule 405 of the Rules and Regulations, required to be filed with the Commission or retained by the Company under
Rule 433 of the Rules and Regulations; provided that the prior written consent of the Representative hereto shall be deemed
to have been given in respect of the Issuer Free Writing Prospectuses included in Schedule I hereto. Any such free writing
prospectus consented to by the Representative is herein referred to as a “Permitted Free Writing Prospectus.”
The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus, and (ii) has complied and will comply, as the case may be, with the requirements of Rules 164 and 433
of the Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending
and record keeping. If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development
as a result of which such Issuer Free Writing Prospectus would conflict with the information contained in the Registration Statement
relating to the Securities or would include an untrue statement of material fact or would omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the
Company will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement, or omission. The Company represents that it has satisfied
and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road
show.
(i) Compliance
with Blue Sky Laws. Prior to any public offering of the Securities by the Underwriters, the Company shall cooperate with the
Representative and counsel to the Underwriters in connection with the registration or qualification (or the obtaining of exemptions
from the application thereof) of the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representative may request limitation, provided, however, that in no event shall the Company be obligated
to qualify a public offering outside the United States or to do business as a foreign corporation in any jurisdiction where it
is not now so qualified, to qualify or register as a dealer in securities, to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject or subject itself to ongoing taxation in respect of doing
business in any jurisdiction in which it is not so subject.
(j) Delivery
of Financial Statements. During the period of five years commencing on the effective date of the Registration Statement applicable
to the Underwriters, the Company shall furnish to the Representative and each other Underwriter who may so request copies of such
financial statements and other periodic and special reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will furnish to the Representative and each other Underwriter who may so request a copy
of each annual or other report it shall be required to file with the Commission; provided, however, that the availability of electronically
transmitted copies filed with the Commission pursuant to EDGAR shall satisfy the Company’s obligation to furnish copies
hereunder.
(k) Availability
of Earnings Statements. The Company shall make generally available to holders of its securities as soon as may be practicable
but in no event later than the last day of the fifteenth (15th) full calendar month following the calendar quarter
in which the most recent effective date occurs in accordance with Rule 158 of the Rules and Regulations, an earnings statement
(which need not be audited but shall be in reasonable detail) for a period of twelve (12) months ended commencing after the effective
date, and satisfying the provisions of Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
(l) Consideration;
Payment of Expenses. In consideration of the services to be provided for hereunder, the Underwriters or their respective designees
shall receive an underwriting discount equal to eight percent (8.5%) of the aggregate gross proceeds raised in the offering.
(i) The
Company grants the Representative the right of first refusal for a period of eleven (11) months from the date of commencement
of sales pursuant to the Prospectus to act as lead managing underwriter and sole book runner or minimally as a co-lead manager
and co-book runner and/or co-lead placement agent with at least 50.0% of the economics; or in the case of a three-handed deal
33.0% of the economics, for any and all future equity, equity-linked or debt (excluding any equity-line financings and any commercial
bank debt) offerings undertaken by the Company or any subsidiary of the Company. The Company shall provide written notice to the
Representative with the terms of such offering and if the Representative fails to accept in writing any such proposal within ten
(10) days after receipt of such written notice, then the Representative will have no claim or right with respect to any such offering.
(ii) The
Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event
that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of
FINRA rules or that the terms thereof require adjustment.
(iii) Whether
or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this
Agreement is terminated, the Company hereby agrees to pay the following:
(1) all
expenses in connection with the preparation, printing, formatting for EDGAR and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and any and all exhibits, amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers;
(2) all
fees and expenses in connection with filings with FINRA’s Public Offering System;
(3) all
fees, disbursements and expenses of the Company’s counsel, accountants and other agents and representatives in connection
with the registration of the Securities under the Act and the offering;
(4) all
expenses in connection with the qualifications of the Securities for offering and sale under state or foreign securities or blue
sky laws (including, without limitation, all filing and registration fees, and up to $5,000 in fees and disbursements of Underwriters’
counsel;
(5) all
fees and expenses in connection with listing the Securities on a national securities exchange;
(6) all
expenses, including travel and lodging expenses, of the Company’s officers, directors and employees and any other expense
of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities;
(7) any
stock transfer taxes or other taxes incurred in connection with this Agreement or the offering, including any stock transfer taxes
payable upon the transfer of securities to the Underwriters;
(8) the
costs associated with preparing, printing and delivering certificates representing the Securities;
(9) the
cost and charges of any transfer agent or registrar for the Securities;
(10) subject
to the following proviso, other costs (including Underwriters’ counsel’s fees and expenses) and expenses incident
to the Offering that are not otherwise specifically provided for in this Section 4(k);
provided, however,
that all such costs and expenses (including Underwriters’ counsel’s fees and expenses) that are incurred by the Underwriters
shall not exceed $80,000 in the aggregate and Maxim shall return any portion of advances not applied to actual out-of-pocket expenses.
(m) Reimbursement
of Expenses upon Termination of Agreement. If this Agreement shall be terminated by the Company pursuant to any of the provisions
hereof or if for any reason the Company shall be unable to perform its obligations or to fulfill any conditions hereunder, or
if the Underwriters shall terminate this Agreement pursuant to the last paragraph of Section 5, Section 7(a), Section 7(e)
or Section 7(f), the Company shall reimburse the Underwriters for all out-of-pocket expenses (including the reasonable fees, disbursements
and other charges of counsel to the Underwriter) actually incurred by the Underwriters in connection herewith and as allowed under
FINRA Rule 5110; provided, however, that the maximum amount of costs and expenses to be reimbursed by Company to
the Underwriters pursuant to this Section 4(l) shall not exceed $50,000 (including the reasonable fees, disbursements and other
charges of counsel to the Underwriters). If the Underwriters’ expenses through the date of termination of this Agreement
are less than $50,000, it shall return any portion of the advance not used for actual expenses.
(n) No
Stabilization or Manipulation. The Company shall not at any time, directly or indirectly, take any action intended to cause
or result in, or which might reasonably be expected to cause or result in, or which will constitute, stabilization or manipulation,
under the Act or otherwise, of the price of the Shares or the Securities to facilitate the sale or resale of any of the Securities.
(o) Use
of Proceeds. The Company shall apply the net proceeds from the offering and sale of the Securities to be sold by the Company
in the manner set forth in the General Disclosure Package and the Prospectus under “Use of Proceeds” and shall file
such reports with the Commission with respect to the sale of the Securities and the application of the proceeds therefrom as may
be required in accordance with Rule 463 under the Act.
(p) Lock-Up
Agreements of Company, Management and Affiliates. The Company shall not, for a period of ninety (90) days after the Closing
Date (the “Lock-Up Period”), without the prior written consent of Maxim (which consent may be withheld in its
sole discretion), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, or
file with the Commission a registration statement under the Act to register, any shares of common stock warrants, or any securities
convertible into or exercisable or exchangeable for common stock or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, directly or indirectly, any of the economic benefits or risks of ownership of shares
of common stock, or warrants, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of
common stock, warrants or other securities, in cash or otherwise, or publicly disclose the intention to enter into any transaction
described in clause (1) or (2) above. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of common stock issued pursuant to a trading plan established prior to March 23, 2017 pursuant to Rule 10b5-1 of the Exchange
Act, (C) the issuance of Common Stock upon the exercise of warrants as disclosed as outstanding in the Registration Statement,
the General Disclosure Package or the Prospectus, and (D) the issuance of (a) shares of Common Stock or options to employees,
officers, consultants or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee
members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established
for such purpose for services rendered to the Company. The Company has caused each of its officers and directors to enter into
agreements with the Representative in the form set forth in Exhibit B.
(q) Lock-Up
Releases. If Maxim, in its sole discretion, agrees to release or waive the restrictions set forth in a lock-up letter described
in Section 4(o) hereof for an officer or director of the Company and provides the Company with notice of the impending release
or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the
impending release or waiver by a press release substantially in the form of Exhibit C hereto through a major news service
at least two business days before the effective date of such release or waiver, or any other method that satisfies the obligations
described in FINRA Rule 5131(d)(2) at least two business days before the effective date of the release or waiver.
(r) Nasdaq
listing. The Company will use its reasonable best efforts to maintain the listing of the Common Stock on the Nasdaq Capital
Market for at least three (3) years after the Closing Date.
5. Conditions
of the Obligations of the Underwriters. The obligation of the Underwriters to purchase the Units on the Closing Date as provided
herein is subject to the accuracy of the representations and warranties of the Company, the performance by the Company of its
covenants and other obligations hereunder and to the following additional conditions:
(a) Post
Effective Amendments and Prospectus Filings. Notification that the Registration Statement has become effective shall be received
by the Representative not later than 4:30 p.m., New York City time, on the date of this Agreement or at such later date and time
as shall be consented to in writing by the Representative and all filings made pursuant to Rules 424, 430A, or 430B of the
Rules and Regulations, as applicable, shall have been made or will be made prior to the Closing Date in accordance with all such
applicable rules.
(b) No
Stop Orders, Requests for Information and No Amendments. (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be pending or are, to the knowledge of the Company,
threatened by the Commission, (ii) no order suspending the qualification or registration of the Securities under the securities
or Blue Sky laws of any jurisdiction shall be in effect and no proceeding for such purpose shall be pending before or threatened
or contemplated by the authorities of any such jurisdiction, (iii) any request for additional information on the part of the staff
of the Commission or any such authorities shall have been complied with to the satisfaction of the staff of the Commission or
such authorities and (iv) after the date hereof no amendment or supplement to the Registration Statement or the Prospectus shall
have been filed unless a copy thereof was first submitted to the Representative and the Representative did not object thereto
in good faith, and the Representative shall have received certificates, dated the Closing Date and signed by the Chief Executive
Officer or the Chairman of the Board of Directors and the Chief Financial Officer of the Company in their capacities as such,
and not individually, (who may, as to proceedings threatened, certify to their knowledge), to the effect of clauses (i), (ii)
and (iii).
(c) No
Material Adverse Changes. Since the respective dates as of which information is given in the Registration Statement and the
Prospectus, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus (i) there shall
not have been a Material Adverse Change, (ii) the Company shall not have incurred any material liabilities or obligations, direct
or contingent, (iii) the Company shall not have entered into any material transactions not in the ordinary course of business
other than pursuant to this Agreement and the transactions referred to herein, (iv) the Company shall not have issued any securities
(other than the Units or Shares issued in the ordinary course of business pursuant to existing employee benefit plans of the Company
referred to in the Registration Statement, General Disclosure Package and the Prospectus) or declared or paid any dividend or
made any distribution in respect of its capital stock of any class or debt (long-term or short-term), and (v) no material amount
of the assets of the Company shall have been pledged, mortgaged or otherwise encumbered.
(d) No
Actions, Suits or Proceedings. Since the respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and the Prospectus, there shall have been no actions, suits or proceedings instituted, or to the
Company’s knowledge, threatened against or affecting, the Company or its subsidiaries or any of their respective officers
in their capacity as such, before or by any federal, state or local court, commission, regulatory body, administrative agency
or other governmental body, domestic or foreign.
(e) All
Representations True and Correct and All Conditions Fulfilled. Each of the representations and warranties of the Company contained
herein shall be true and correct as of the date of the Agreement and at the Closing Date as if made at the Closing Date and all
covenants and agreements contained herein to be performed by the Company and all conditions contained herein to be fulfilled or
complied with by the Company at or prior to the Closing Date shall have been duly performed, fulfilled or complied with.
(f) Opinions
of Counsel to the Company. The Underwriters shall have received the opinions and letters, each dated the Closing Date each
reasonably satisfactory in form and substance to the Representative and counsel for the Underwriters, from Sheppard, Mullin, Richter
& Hampton LLP, counsel to the Company, and Pearl Cohen Zedek Latzer Baratz LLP, intellectual property counsel to the Company.
(g) Opinion
of Counsel to the Underwriters. The Representative shall have received an opinion, dated the Closing Date from Ellenoff Grossman
& Schole LLP, U.S. securities counsel to the Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinions shall be satisfactory in all respects to the Representative.
(h) Accountants’
Comfort Letter. On the date of the Prospectus, the Representative shall have received from the Accountants a letter dated
the date of its delivery, addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative and
counsel to the Underwriters, containing statements and information of the type ordinarily included in accountant’s “comfort
letters” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with
respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement
and the Prospectus. At the Closing Date, the Representative shall have received from the Accountants a letter dated such date,
in form and substance reasonably satisfactory to the Representative and counsel to the Underwriters, to the effect that they reaffirm
the statements made in the letter furnished by them pursuant to the preceding sentence and have conducted additional procedures
with respect to certain financial figures included in the Prospectus, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to the Closing Date.
(i) Officers’
Certificates. At the Closing Date, there shall be furnished to the Representative an accurate certificate, dated the date
of its delivery, signed by each of the Interim Chief Executive Officer and the Vice President, Finance, Controller and Chief Accounting
Officer of the Company, in their capacities as such, and not individually, in form and substance satisfactory to the Representative
and counsel to the Underwriters, to the effect that:
(i) each
signer of such certificate has carefully examined the Registration Statement and the Prospectus;
(ii) there
has not been a Material Adverse Change; and
(iii) with
respect to the matters set forth in Sections 5(b)(i) and 5(e).
(j) [Reserved].
(k) Regulatory
Certificate. The Company shall have delivered to the Representative at the Closing Date a certificate addressed to the Representative
and dated such date, of the Company’s regulatory affairs officer, in form and substance satisfactory to the Representative.
(l) Transfer
Agent’s Certificate. The Company’s transfer agent shall have furnished or caused to be furnished to the Representative
a certificate satisfactory to the Representative of one of its authorized officers with respect to the issuance of the Securities
and such other customary matters related thereto as the Representative may reasonably request.
(m) Eligible
for DTC Clearance. At or prior to the Closing Date, the Securities shall be eligible for clearance and settlement through
the facilities of the DTC.
(n) Lock-Up
Agreements. At the date of this Agreement, the Representative shall have received the executed “lock-up” agreements
referred to in Section 4(o) hereof from the Company’s officers and directors.
(o) Compliance
with Blue Sky Laws. The Securities shall be qualified for sale in such states and jurisdictions as the Representative may
reasonably request, including, without limitation, qualification for exemption from registration or prospectus delivery requirements
in the provinces and territories of Canada and other jurisdictions outside the United States, and each such qualification shall
be in effect and not subject to any stop order or other proceeding on the Closing Date.
(p) [Reserved].
(q) Exchange
Act Registration. One or more registration statements in respect of the Securities have been filed on Form 8-A pursuant to
Section 12(b) of the Exchange Act, each of which registration statement complies in all material respects with the Exchange Act.
(r) Good
Standing. At the Closing Date, the Company shall have furnished to the Representative satisfactory evidence of the good standing
of the Company and its subsidiaries, in their respective jurisdictions of organization (to the extent the concept of “good
standing” or such equivalent concept exists under the laws of the applicable jurisdictions) and their good standing as foreign
entities in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form
of telecommunication from the appropriate governmental authorities of such jurisdictions. If the applicable jurisdiction does
not have a concept of “good standing,” the Company will furnish evidence in writing or any standard form of telecommunication
from the appropriate governmental authorities that the relevant company was duly incorporated and remains duly registered in the
jurisdiction of its incorporation.
(s) Company
Certificates. The Company shall have furnished to the Representative such certificates, in addition to those specifically
mentioned herein, as the Representative may have reasonably requested as to the accuracy and completeness at the Closing Date
of any statement in the Registration Statement, the General Disclosure Package or the Prospectus, as to the accuracy at the Closing
Date of the representations and warranties of the Company herein, as to the performance by the Company of its obligations hereunder,
or as to the fulfillment of the conditions concurrent and precedent to the obligations hereunder of the Underwriters.
(t) No
Objection. FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements relating to the offering of the Securities.
(u) Subsequent
Equity Sales.
(i) From
the date hereof until the date that is sixty (60) days following the date hereof, 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.
(ii) From
the date hereof until the date that is sixty (60) days following the date hereof, the Company shall be prohibited from effecting
or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the 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.
Notwithstanding the
foregoing, this Section 5(u) shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance. “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers, consultants or directors of the Corporation pursuant to any stock or option plan duly adopted by a majority
of the non-employee members of the Board of Directors of the Corporation or a majority of the members of a committee of non-employee
directors established for such purpose for services rendered to the Corporation; provided, however, issuances to consultants shall
need exceed 250,000 shares of Common Stock during any calendar quarter, (b) securities to be sold pursuant to and issuable
upon the exercise or exchange of or conversion of any securities issued pursuant to the Transaction Documents and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of the Underwriting
Agreement, provided that such securities have not been amended since the date of the Underwriting Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of any such securities, and (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Corporation,
provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its
subsidiaries, an operating company or an asset in a business synergistic with the business of the Corporation and shall provide
to the Corporation additional benefits in addition to the investment of funds, but shall not include a transaction in which the
Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities.
If any of the conditions
hereinabove provided for in this Section 5 shall not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the Representative by notifying the Company of such termination
in writing at or prior to the Closing Date.
6. Indemnification.
(a) Indemnification
of the Underwriters. The Company shall indemnify and hold harmless each Underwriter, its affiliates, the directors, officers,
employees and agents of such Underwriter and each person, if any, who controls such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act from and against any and all losses, claims, liabilities, expenses and damages
(including any and all investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any
indemnified party and any third party, or otherwise, or any claim asserted), to which they, or any of them, may become subject
under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, liabilities, expenses or damages arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed
to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and
430B of the Rules and Regulations, as applicable, or the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, any preliminary prospectus supplement, any Issuer Free Writing Prospectus
or the Prospectus (or any amendment or supplement to any of the foregoing) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading or (iii) any untrue statement or alleged untrue statement of a material fact contained in 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 roadshow or investor presentations made to investors by the Company (whether in person or electronically) (collectively,
Marketing Materials”) or the omission or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading or (iv) in whole or in part
any inaccuracy in any material respect in the representations and warranties of the Company contained herein; provided,
however, that the Company shall not be liable to the extent that such loss, claim, liability, expense or damage is based
on any untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with Underwriters’
Information. This indemnity agreement will be in addition to any liability that the Company might otherwise have.
(b) Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its affiliates,
the directors, officers, employees and agents of the Company and each other person or entity, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages
and expenses whatsoever, as incurred (including but not limited to reasonable attorneys’ fees and any and all reasonable
expenses whatsoever, incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules
430A and 430B of the Rules and Regulations, any Preliminary Prospectus, the Prospectus, or any amendment or supplement to any
of them, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense (or action in respect thereof) arises out of or is based upon any such untrue statement
or alleged untrue statement or omission or alleged omission made therein in reliance upon the Underwriters’ Information;
provided, however, that in no case shall any Underwriter be liable or responsible for any amount in excess of the
underwriting discount and commissions applicable to the Securities purchased by such Underwriter hereunder. The parties agree
that such information provided by or on behalf of the Underwriters through the Representative consists solely of the material
referred to in the last sentence of Section 3(c) hereof.
(c) Indemnification
Procedures. Any party that proposes to assert the right to be indemnified under this Section 6 shall, promptly after
receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying
party or parties under this Section 6, notify each such indemnifying party of the commencement of such action, enclosing
a copy of all papers served, but the omission so to notify such indemnifying party shall not relieve the indemnifying party from
any liability that it may have to any indemnified party under the foregoing provisions of this Section 6 unless, and only
to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying
party similarly notified, to assume the defense of the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable out-of-pocket
costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be
at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in
writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (iii) the indemnified party has reasonably concluded
that a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party
and the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action
on behalf of the indemnified party), (iv) the indemnifying party does not diligently defend the action after assumption of the
defense, or (v) the indemnifying party has not in fact employed counsel satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel shall be at the expense of the indemnifying party or parties. It is understood
that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges shall be
reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party shall not be liable for any settlement
of any action or claim effected without its written consent (which consent will not be unreasonably withheld or delayed). No indemnifying
party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 6
(whether or not any indemnified party is a party thereto), unless (x) such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding and (ii)
does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified
party, and (y) the indemnifying party confirms in writing its indemnification obligations hereunder with respect to such settlement,
compromise or judgment. Notwithstanding the foregoing, if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a) effected without its written consent if (A) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the aforesaid request, (B) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
(d) Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its terms but for any reason is held to be unavailable,
the Company and the Underwriters shall contribute to the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than
the Underwriters, such as persons who control the Company within the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company, who may also be liable for contribution), to which the Company and the Underwriter
may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Securities pursuant to this Agreement. The relative benefits received
by the Company and the Underwriters shall be deemed to be in the same proportion as (x) the total proceeds from the Offering (net
of underwriting discount and commissions but before deducting expenses) received by the Company bears to (y) the underwriting
discount and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus.
If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence
but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements
or omissions which resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 6(d) were to be determined by pro rata allocation or by any other
method of allocation (even if the Underwriters were treated as one entity for such purpose) which does not take into account the
equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in this Section 6(d) shall be deemed to include,
for purpose of this Section 6(d), any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and commissions received by it. No person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6(d), any person who controls a party
to this Agreement within the meaning of the Act will have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to contribution as the Company, and each director, officer,
employee, counsel or agent of an Underwriter will have the same rights to contribution as such Underwriter, subject in each case
to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be made under this Section 6(d), will notify any such party or parties
from whom contribution may be sought, but the omission so to notify will not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have under this Section 6(d). The obligations of the Underwriters to contribute
pursuant to this Section 6(d) are several in proportion to the respective number of Securities to be purchased by each of the
Underwriters hereunder and not joint. No party will be liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).
(e) Survival.
The indemnity and contribution agreements contained in this Section 6 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or
on behalf of any Underwriter or any controlling Person thereof, (ii) acceptance of any of the Securities and payment therefor
or (iii) any termination of this Agreement.
7. Termination.
The obligations of the Underwriters under this Agreement may be terminated at any time prior to the Closing Date, by notice to
the Company from the Representative, without liability on the part of the Underwriters to the Company, if, prior to delivery and
payment for the Securities, in the sole judgment of the Representative, any of the following shall occur:
(a) trading
or quotation in any of the equity securities of the Company shall have been suspended or limited by the Commission, the Nasdaq
Capital Market or by an exchange or otherwise;
(b) trading
in securities generally on the New York Stock Exchange, the NYSE American, the NASDAQ Capital Market, the NASDAQ Global Market,
the NASDAQ Global Select Market shall have been suspended or limited or minimum or maximum prices shall have been generally established
on such exchange, or additional material governmental restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the Commission or any court or other governmental
authority;
(c) a
general banking moratorium shall have been declared by any of U.S. federal, New York authorities;
(d) the
United States shall have become engaged in new hostilities, there shall have been an escalation in hostilities involving the United
States or there shall have been a declaration of a national emergency or war by the United States or there shall have occurred
such a material adverse change in general economic, political or financial conditions, including, without limitation, as a result
of terrorist activities after the date hereof (or the effect of international conditions on the financial markets in the United
States shall be such), or any other calamity or crisis shall have occurred, the effect of any of which is such as to make it impracticable
or inadvisable to market the Securities on the terms and in the manner contemplated by the Prospectus;
(e) the
Company shall have sustained a loss material or substantial to the Company by reason of flood, fire, accident, hurricane, earthquake,
theft, sabotage, or other calamity or malicious act, whether or not such loss shall have been insured, the effect of any of which
is such as to make it impracticable or inadvisable to market the Securities on the terms and in the manner contemplated by the
Prospectus; or
(f) there
shall have been a Material Adverse Change.
8. Underwriter
Default.
(a) If
any Underwriter or Underwriters shall default in its or their obligation to purchase the Units hereunder, and if the Securities
with respect to which such default relates (the “Default Securities”) do not (after giving effect to arrangements,
if any, made by the Representative pursuant to subsection (b) below) exceed in the aggregate 10% of the number of Units, each
non-defaulting Underwriter, acting severally and not jointly, agrees to purchase from the Company that number of Default Securities
that bears the same proportion to the total number of Default Securities then being purchased as the number of Units set forth
opposite the name of such Underwriter on Schedule A hereto bears to the aggregate number of Units set forth opposite the
names of the non-defaulting Underwriters; subject, however, to such adjustments to eliminate fractional shares as the Representative
in its discretion shall make.
(b) In
the event that the aggregate number of Default Securities exceeds 10% of the number of Units, the Representatives may in their
discretion arrange for themselves or for another party or parties (including any non-defaulting Underwriter or Underwriters who
so agree) to purchase the Default Securities on the terms contained herein. In the event that within five (5) calendar days after
such a default the Representative does not arrange for the purchase of the Default Securities as provided in this Section 8, this
Agreement shall thereupon terminate, without liability on the part of the Company with respect thereto (except in each case as
provided in Sections 4(k), 6 and 8) or the Underwriters, but nothing in this Agreement shall relieve a defaulting Underwriter
or Underwriters of its or their liability, if any, to the other Underwriters and the Company for damages occasioned by its or
their default hereunder.
(c) In
the event that any Default Securities are to be purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, the Representatives or the Company shall have the right to postpone the Closing Date for a period,
not exceeding five (5) Business Days, in order to effect whatever changes may thereby be necessary in the Registration Statement
or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment or supplement
to the Registration Statement or the Prospectus which, in the reasonable opinion of Underwriters’ Counsel, may be necessary
or advisable. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section
8 with like effect as if it had originally been a party to this Agreement with respect to such Units.
9. Miscellaneous.
(a) Notices.
Notice given pursuant to any of the provisions of this Agreement shall be in writing and, unless otherwise specified, shall
be mailed, hand delivered or telecopied (a) if to the Company, at the office of the Company, 550 Sylvan Avenue, Englewood Cliffs,
NJ, telecopy number: [ ], Attention: [ ] or (b) if to
the Representative or any Underwriter, to Maxim Group LLC, 305 Lexington Avenue, New York, New York 100174, Attention: Legal Department,
telecopy number: (212) 895-3555. Any such notice shall be effective only upon receipt. Any notice under Section 6 hereof
may be made by telecopy or telephone, but if so made shall be subsequently confirmed in writing.
(b) No
Third Party Beneficiaries. This Agreement has been and is made solely for the benefit of the Underwriters, the Company and,
with respect to Section 6, the controlling persons, directors, officers, employees, counsel and agents referred to in Section 6
hereof, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of
this Agreement. The term “successors and assigns” as used in this Agreement shall not include a purchaser of Securities
from any Underwriter in his, her or its capacity as such a purchaser, as such purchaser of Securities from such Underwriter.
(c) Survival
of Representations and Warranties. All representations, warranties and agreements of the Company contained herein or in certificates
or other instruments delivered pursuant hereto shall remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Underwriters or any of their controlling persons and shall survive delivery of and payment for the
Securities hereunder.
(d) Disclaimer
of Fiduciary Relationship. The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to
this Agreement, including the determination of the public offering price of the Securities and any related discounts and commissions,
is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters, on the other hand,
(ii) in connection with the offering contemplated by this Agreement and the process leading to such transaction, the Underwriters
are and have been acting pursuant to a contractual relationship created solely by this Agreement and are not agents or fiduciaries
of the Company or its securityholders, creditors, employees or any other party, (iii) no Underwriter has assumed nor will it assume
any advisory or fiduciary responsibility in favor of the Company with respect to the offering of the Securities contemplated by
this Agreement or the process leading thereto (irrespective of whether such Underwriter or its affiliates has advised or is currently
advising the Company on other matters) and each such Underwriter has no obligation to the Company with respect to the offering
of the Securities contemplated by this Agreement except the obligations expressly set forth in this Agreement, (iv) the Underwriters
and their affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company,
and (v) no Underwriter has provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated
by this Agreement and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.
(e) Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
(f) Submission
to Jurisdiction. The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or United States
federal court sitting in The City of New York, Borough of Manhattan, over any suit, action or proceeding arising out of or relating
to this Agreement, the Disclosure Package, the Prospectus, the Registration Statement, or the offering of the Securities. The
Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding
brought in such a court has been brought in an inconvenient forum. To the extent that the Company has or hereafter may acquire
any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect
to itself or its property, the Company irrevocably waives, to the fullest extent permitted by law, such immunity in respect of
any such suit, action or proceeding including without limitation, any immunity pursuant to the U.S. Foreign Sovereign Immunities
Act of 1976, as amended. Each of the Underwriters and the Company further agrees to accept and acknowledge service of any and
all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York
County, or in the United States District Court for the Southern District of New York and agrees that service of process upon the
Company mailed by certified mail or delivered by Federal Express via overnight delivery to the Company’s address shall be
deemed in every respect effective service of process upon the Company in any such suit, action or proceeding, and service of process
upon an Underwriter mailed by certified mail or delivered by Federal Express via overnight delivery to the Underwriters’
address shall be deemed in every respect effective service of process upon such Underwriter in any such suit, action or proceeding.
(g) Judgment
Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency
other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange
used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars
with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation
of the Company with respect to any sum due from it to an Underwriter or any person controlling such Underwriter shall, notwithstanding
any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt
by such Underwriter or controlling person of any sum in such other currency, and only to the extent that such Underwriter or controlling
person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United
States dollars so purchased are less than the sum originally due to such Underwriter or controlling person hereunder, the Company
agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against
such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter or controlling
person hereunder, such Underwriter or controlling person agrees to pay to the Company an amount equal to the excess of the dollars
so purchased over the sum originally due to such Underwriter or controlling person hereunder.
(h) Counterparts.
This Agreement may be signed in two or more counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
(i) Survival
of Provisions Upon Invalidity of Any Single Provision. In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby.
(j) Waiver
of Jury Trial. The Company and each Underwriter each hereby irrevocably waive any right they may have to a trial by jury in
respect of any claim based upon or arising out of this Agreement or the transactions contemplated hereby.
(k) Titles
and Subtitles. The titles of the sections and subsections of this Agreement are for convenience and reference only and are
not to be considered in construing this Agreement.
(l) Entire
Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings relating to the subject matter hereof. This Agreement may not be amended or otherwise modified or
any provision hereof waived except by an instrument in writing signed by the parties hereto.
[Signature page follows]
If the foregoing correctly
sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute
a binding agreement among us.
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Very truly yours, |
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Immune Pharmaceuticals Inc. |
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By: |
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Name: |
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Title: |
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Accepted by the Representatives, acting
for themselves and as
Representatives of the Underwriters named
on Schedule A hereto,
as of the date first written above:
| Maxim Group LLC |
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| By: |
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Name: Clifford A. Teller |
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Title: Executive Managing Director, |
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Investment Banking |
|
[Signature Page to Underwriting Agreement]
SCHEDULE A
| Name of Underwriter |
Number
of
Units Being
Purchased |
| Maxim
Group LLC |
|
Schedule I
ISSUER FREE WRITING
PROSPECTUSES:
None.
Schedule II
| 1. | The public
offering price per share of Series E Preferred Stock shall be an aggregate purchase price
of $1,000 per Share and Warrants. |
| 2. | The Company
is selling 5,000 Shares and Warrants to purchase [ ] Shares. |
EXHIBIT A
_____________, 2017
Maxim Group LLC
405 Lexington Avenue
New York, NY 10174
Re: Public Offering
of Immune Pharmaceuticals.
Ladies and Gentlemen:
The undersigned, a
holder of common stock, par value $0.0001 (“Common Stock”), or rights to acquire Common Stock, of Immune Pharmaceuticals
Inc. (the “Company”), understands that you are the representative (the “Representative”)
of the several underwriters (collectively, the “Underwriters”) named or to be named in the final form of Schedule
A to the underwriting agreement (the “Underwriting Agreement”) to be entered into among the Underwriters
and the Company, providing for the public offering (the “Public Offering”) of 7,500 shares of Series E Preferred
Stock (“Preferred Stock”), with each share of Preferred Stock being sold together with a Warrant to purchase
Common Stock (collectively, the “Securities”) pursuant to a registration statement filed or to be filed with
the U.S. Securities and Exchange Commission (the “SEC”). Capitalized terms used herein and not otherwise defined
shall have the meanings set forth for them in the Underwriting Agreement.
In consideration of
the Underwriters’ agreement to enter into the Underwriting Agreement and to proceed with the Public Offering of the Securities,
and for other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned hereby agrees, for the
benefit of the Company, the Representative and the other Underwriters that, without the prior written consent of the Representative,
the undersigned will not, during the period specified in the following paragraph (the “Lock-Up Period”), directly
or indirectly, unless otherwise provided herein, (a) offer, sell, agree to offer or sell, solicit offers to purchase, grant any
call option or purchase any put option with respect to, pledge, encumber, assign, borrow or otherwise dispose of or transfer (each
a “Transfer”) any Relevant Security (as defined below) or otherwise publicly disclose the intention to do so,
or (b) establish or increase any “put equivalent position” or liquidate or decrease any “call equivalent position”
(in each case within the meaning of Section 16 of the Exchange Act and the rules and regulations thereunder) with respect to any
Relevant Security or otherwise enter into any swap, derivative or other transaction or arrangement that Transfers to another,
in whole or in part, any economic consequence of ownership of a Relevant Security, whether or not such transaction is to be settled
by the delivery of Relevant Securities, other securities, cash or other consideration, or otherwise publicly disclose the intention
to do so. As used herein, the term “Relevant Security” means any share of Common Stock, warrant to purchase
Common Stock or any other security of the Company or any other entity that is convertible into, or exercisable or exchangeable
for, Common Stock or any other equity security of the Company, in each case owned beneficially or otherwise by the undersigned
on the date of the final prospectus used in connection with the Public Offering of the Securities (the “Effective Date”).
The Lock-Up Period
will commence on the date of this Lock-up Agreement and continue and include the date that is ninety (90) days after the Closing
Date.
In addition, the undersigned
further agrees that, without the prior written consent of the Representative, during the Lock-Up Period the undersigned will not:
(i) file or participate in the filing with the SEC of any registration statement or circulate or participate in the circulation
of any preliminary or final prospectus or other disclosure document, in each case with respect to any proposed offering or sale
of a Relevant Security, or (ii) exercise any rights the undersigned may have to require registration with the SEC of any proposed
offering or sale of a Relevant Security.
In addition, if: (i) the
Company issues an earnings release or material news or a material event relating to the Company occurs during the last seventeen
(17) days of the Lock-Up Period, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it
will release earnings results during the sixteen (16)-day period beginning on the last day of the Lock-Up Period, then the restrictions
imposed by this Lock-Up Agreement shall continue to apply until the expiration of the eighteen (18)-day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event (the “Extension Period”).
However, for purposes of clarity, only one Extension Period may occur.
In furtherance of
the undersigned’s obligations hereunder, the undersigned hereby authorizes the Company during the Lock-Up Period to cause
any transfer agent for the Relevant Securities to decline to transfer, and to note stop transfer restrictions on the stock register
and other records relating to, Relevant Securities for which the undersigned is the record owner and the transfer of which would
be a violation of this Lock-Up Agreement and, in the case of Relevant Securities for which the undersigned is the beneficial but
not the record owner, agrees that during the Lock-Up Period it will cause the record owner to cause the relevant transfer agent
to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, such Relevant
Securities to the extent such transfer would be a violation of this Lock-Up Agreement.
Notwithstanding the
foregoing, the undersigned may transfer the undersigned’s Relevant Securities:
| (i) | as a bona
fide gift or gifts or for bona fide estate planning purposes, |
| (ii) | to any
trust for the direct or indirect benefit of the undersigned or a member of members of
the immediate family of the undersigned, |
| (iii) | if the
undersigned is a corporation, partnership, limited liability company, trust or other
business entity (1) to another corporation, partnership, limited liability company, trust
or other business entity that is a direct or indirect affiliate (as defined in Rule 405
under the Securities Act of 1933) of the undersigned, (2) to limited partners, limited
liability company members or stockholders of the undersigned, or (3) in connection with
a sale, merger or transfer of all or substantially all of the assets of the undersigned
or any other change of control of the undersigned, not undertaken for the purpose of
avoiding the restrictions imposed by this Lock-Up Agreement, |
| (iv) | if the
undersigned is a trust, to the beneficiary of such trust, |
| (v) | by testate
or intestate succession, |
| (vi) | by operation
of law, such as pursuant to a qualified domestic order or in connection with a divorce
settlement, |
| (vii) | in connection
with any sale of any of the Company’s securities acquired in open market transactions
after the Effective Date, |
| (viii) | pursuant
to the Underwriting Agreement, and |
| (ix) | pursuant
to a trading plan established prior to March 23, 2017 pursuant to Rule 10b5-1 of the
Exchange Act. |
provided, in the case of clauses
(i)-(vi), that (A) such transfer shall not involve a disposition for value, (B) the transferee agrees in writing with the Underwriters
and the Company to be bound by the terms of this Lock-Up Agreement, and (C) such transfer would not require any filing under Section
16(a) of the Exchange Act and no such filing is voluntarily made during the Lock-Up Period.
Nothing in this Lock-Up
Agreement shall preclude the establishment of a new trading plan pursuant to Rule 10b5-1 of the Exchange Act; provided, that (A) no
public report or filing under Section 16(a) of the Exchange Act shall be required during the Lock-Up Period, (B) the
undersigned does not otherwise voluntarily effect any public filing or report regarding the establishment of such plan during
the Lock-Up Period, and (C) no sales are made during the Lock-Up Period pursuant to such plan.
Additionally, upon
the prior written consent of the Representative, such consent not to be unreasonably withheld, the undersigned may transfer the
undersigned’s Relevant Securities to the Company: (i) upon a vesting event of the Company’s securities, or (ii) pursuant
to arrangements under which the Company has the option to repurchase such shares or a right of first refusal with respect to transfers
of such shares or upon the exercise or conversion of options or warrants to purchase the Company’s securities, in each case,
on a “cashless” or “net exercise” basis to cover tax withholding obligations of the undersigned in connection
with such vesting or exercise; provided, that, any filing under Section 16(a) of the Exchange Act made during the Lock-Up Period
shall clearly indicate in the footnotes thereto that the filing relates to the circumstances described above.
For purposes of this
Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote
than first cousin.
The undersigned hereby
represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that this Lock-Up
Agreement has been duly authorized (if the undersigned is not a natural person) and constitutes the legal, valid and binding obligation
of the undersigned, enforceable in accordance with its terms. Upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the undersigned shall be binding upon the successors and
assigns of the undersigned from the date of this Lock-Up Agreement.
If (i) the Underwriting
Agreement does not become effective on or before March 28, 2018(provided that the Company may by written notice to the undersigned
on or prior to March 28, 2018 extend such date for a period of up to an additional 90 days), (ii) the Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery
of the Securities to be sold thereunder, (iii) the registration statement filed with the SEC with respect to the Public Offering
is withdrawn, or (iv) the Company notifies the Representative that it does not intend to proceed with the Public Offering,
the undersigned shall be released from all obligations under this Lock-Up Agreement.
The undersigned, whether
or not participating in the Public Offering, understands that the Underwriters are entering into the Underwriting Agreement and
proceeding with the Public Offering in reliance upon this Lock-Up Agreement.
[Signature Follows]
This Lock-Up Agreement
shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws
principles thereof. Delivery of a signed copy of this Lock-Up Agreement by facsimile or e-mail/.pdf transmission shall be effective
as the delivery of the original hereof.
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Very truly yours, |
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Signature: |
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Name (printed): |
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|
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Title (if applicable): |
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|
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Entity (if applicable): |
EXHIBIT B
Form of Press Release
[ ]
[Date]
[ ]
(the “Company”) announced today that Maxim Group LLC, the lead book-running manager in the Company’s
recent public sale of Series E Convertible Preferred Stock, or “Preferred Stock”, with each share of Preferred Stock
being sold together with a Warrant to purchase Common Stock of the Company, is [waiving][releasing] a lock-up restriction with
respect to [___] of the Company’s shares of Common Stock held by [certain officers or directors][an officer or director]
of the Company. The [waiver][release] will take effect on [___], and the shares of Common Stock may be sold on or after such date.
This press release is not an offer
for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities
may not be offered or sold in the United States absent registration or an exemption from registration under the United States
Securities Act of 1933, as amended.
