Exhibit 1.1
UNDERWRITING AGREEMENT
May 16, 2023
Spartan Capital Securities, LLC
45 Broadway
New York, NY 10006
As Representative of the several Underwriters named on Schedule
1 attached hereto
Ladies and Gentlemen:
The undersigned, CaliberCos
Inc., a Delaware corporation (the “Company”), hereby confirms its agreement (this “Agreement”) with
Spartan Capital Securities, LLC (hereinafter referred to as “you” (including its correlatives) or the “Representative”)
and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the
Representative and such other underwriters being collectively called the “Underwriters” or, individually, an “Underwriter”)
as follows:
1.
Purchase and Sale of Shares.
1.1 Firm
Shares.
1.1.1. Nature
and Purchase of Firm Shares.
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company
agrees to sell in the aggregate 1,200,000 shares of Class A common stock of the Company, par value $0.001 per share (the “Common
Stock”), and each Underwriter agrees to purchase, severally and not jointly, at the Closing, an aggregate of 1,200,000 shares
(“Firm Shares”) of the Common Stock.
(ii) The
Firm Shares are to be offered together to the public at the offering price per one Firm Share as set forth on Schedule 2-A hereto
(the “Purchase Price”). The Underwriters, severally and not jointly, agree to purchase from the Company the number
of Firm Shares set forth opposite their respective names on Schedule 1 attached hereto and made a part hereof at the
purchase price for one Firm Share of $3.68 (or 92% of the Purchase Price).
1.1.2. Firm
Shares Payment and Delivery.
(i) Delivery
and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time, on the third (3rd) trading day following the date hereof or
at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Bevilacqua PLLC (“Representative’s
Counsel”), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the
Representative and the Company. The hour and date of delivery and payment for the Firm Shares is called the “Closing Date.”
(ii) Payment
for the Firm Shares shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company
upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares (or through the
facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The Firm Shares shall be registered
in such name or names and in such authorized denominations as the Representative may request in writing prior to the Closing Date. The
Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Representative for all of the Firm
Shares. The term “Business Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which
banking institutions are authorized or obligated by law to close in New York, New York.
1.2. Over-allotment
Option.
1.2.1. Option
Shares. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares, the Company
hereby grants to the Underwriters an option (the “Over-allotment Option”) to purchase, in the aggregate, up to 180,000
additional shares of the Common Stock (the “Option Shares”, and along with the Firm Shares, the “Shares”),
representing fifteen percent (15%) of the Firm Shares sold in the Offering (as defined below), from the Company. The purchase price to
be paid per Option Share shall be equal to the price per Option Share set forth in Schedule 2-A. The Shares shall be issued
directly by the Company and shall have the rights and privileges described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus referred to below. The offering and sale of the Shares is herein referred to as the “Offering.”
1.2.2. Exercise
of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative
as to all (at any time) or any part (from time to time) of the Option Shares within forty-five (45) days after the Closing Date. The Underwriters
shall not be under any obligation to purchase any of the Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of written notice to the Company from the Representative, setting forth the number
of the Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (the “Option Closing
Date”), which shall not be later than five (5) full Business Days after the date of the notice or such other time as shall
be agreed upon by the Company and the Representative, at the offices of Representative’s Counsel or at such other place (including
remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery
and payment for the Option Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon
exercise of the Over-allotment Option with respect to all or any portion of the Option Shares subject to the terms and conditions set
forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of the Option Shares specified in such
notice and (ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of the
Option Shares then being purchased as set forth in Schedule 1 opposite the name of such Underwriter.
1.2.3. Payment
and Delivery. Payment for the Option Shares shall be made on the Option Closing Date by wire transfer in Federal (same day) funds,
payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the Underwriters) representing
the Option Shares (or through the facilities of DTC or via DWAC transfer) for the account of the Underwriters. The Option Shares shall
be registered in such name or names and in such authorized denominations as the Representative may request in writing prior to the Option
Closing Date. The Company shall not be obligated to sell or deliver the Option Shares except upon tender of payment by the Representative
for applicable Option Shares.
1.3 Directed
Share Program. At the request of the Company, the Underwriters have reserved for sale, at the public offering price, up to an
aggregate of 10% of the Firm Shares offered in this Offering (the “Directed Shares”) to certain of our directors, officers,
employees and certain friends and family members of these persons, and certain clients and prospective clients (each, a “Participant”).
The sales will be made by the Underwriters, through a directed share program (the “Directed Share Program”). Any Firm
Shares purchased through the Directed Share Program shall reduce the number of Firm Shares available for sale to the general public. Any
Firm Shares reserved through the Directed Share Program that are not so purchased will be offered by Underwriter to the general public
on the same terms as the Firm Shares offered by this prospectus. Any Firm Shares sold in the Directed Share Program to a director or officer
of the Company, each of whom has entered into a lock-up agreement, shall be subject to the provisions of such lock-up agreement. The Underwriter
shall be entitled to same compensation for any Firm Shares sold through the Directed Share Program as it would be otherwise be entitled
to from the sale of Firm Shares through this Offering.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below),
as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1. Filing
of Registration Statement.
2.1.1. Pursuant
to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-267657), including any
related prospectus or prospectuses, for the registration of the Shares under the Securities Act of 1933, as amended (the “Securities
Act”). Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at
the time the registration statement became effective (including the Preliminary Prospectus included in the registration statement, financial
statements, schedules, exhibits and all other documents filed as a part thereof and all information deemed to be a part thereof as of
the effective date (the “Effective Date”) of the Registration Statement (as defined below) pursuant to paragraph (b) of
Rule 430A of the rules and regulations of the Commission under the Securities Act (the “Securities Act Regulations”)
(the “Rule 430A Information”)), is referred to herein as the “Registration Statement.” If
the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing,
the term “Registration Statement” shall include such registration statement filed pursuant to Rule 462(b). The
Registration Statement has been declared effective by the Commission on the date hereof.
Each prospectus used prior
to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after
such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary Prospectus.”
The Preliminary Prospectus, subject to completion, dated May 10, 2023, that was included in the Registration Statement immediately prior
to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final prospectus in the form first furnished
to the Underwriters for use in the Offering is hereinafter called the “Prospectus.” Any reference to the “most
recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus included in the Registration Statement.
“Applicable Time”
means 4:00 p.m., Eastern time, on the date of this Agreement.
“Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations
(“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405
of the Securities Act Regulations) relating to the Shares that is (i) required to be filed with the Commission by the Company, (ii) a
“road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed
with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains
a description of the Shares or of the Offering that does not reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“Issuer General
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona Fide
Electronic Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer Limited
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
“Pricing Disclosure
Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus
and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant
to the Exchange Act. The Company has filed with the Commission a Form 8-A (File Number 001-41703) providing for
the registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of the Common Stock. The registration of the Common Stock under the Exchange Act has become effective on or prior to
the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act, nor has the Company received any written notification that the Commission is contemplating terminating
such registration.
2.2. Share
Exchange Listing. The Shares have been approved for listing on the Nasdaq Capital Market (the “Exchange”),
and the Company has taken no action designed to, or likely to have the effect of, delisting of the Shares from the Exchange, nor has the
Company received any written notification that the Exchange is contemplating terminating such listing.
2.3. No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority
has issued any written order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus
or has instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company
has complied in all material respects with each request (if any) from the Commission for additional information.
2.4. Disclosures
in Registration Statement.
2.4.1. Compliance
with Securities Act and 10b-5 Representation.
(i) Each
of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects
with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus
filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus,
at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the
Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the
Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any
Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit
to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(iii) The
Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and
will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing Prospectus hereto
does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or
the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus
as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to statements made in reliance upon and in conformity with information furnished
to the Company in writing with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the
Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the disclosure contained in the last paragraph on the cover page of the
Prospectus, marketing and legal names of each Underwriter, in the “Underwriting” subsection “- Discounts and Commissions;
Expenses,” and the third and seventh paragraphs of the subsection “- Lock-Up Agreement” of the Prospectus (the “Underwriters’
Information”).
(iv) Neither
the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing
with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include
an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to the Underwriters’ Information.
2.4.2. Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the Prospectus
conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required
by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed.
Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound
or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is
material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in
all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance
with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the
federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief
may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None
of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any
other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the
giving of notice, or both, would constitute a default thereunder, except for any default or event which would not reasonably be expected
to result in a Material Adverse Change (as defined below). To the Company’s knowledge, performance by the Company of the material
provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or
businesses (each, a “Governmental Entity”), including, without limitation, those relating to environmental laws and
regulations, except for any violation which would not reasonably be expected to result in a Material Adverse Change (as defined below).
2.4.3. Prior
Securities Transactions. During the past three (3) years from the date of this Agreement, no securities of the Company have
been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common
control with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and any Preliminary Prospectus.
2.4.4. Regulations.
The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal, state,
local and all foreign regulation on the Offering and the Company’s business as currently contemplated are correct in all material
respects and no other such regulations are required by the Securities Act or the Securities Act Regulations to be disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed.
2.5. Changes
after Dates in Registration Statement.
2.5.1. No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the
financial position or results of operations of the Company or its Subsidiaries (as defined in Section 2.7 below) taken as a whole, nor
any change or development that, singularly or in the aggregate, would involve a material adverse change in or affecting the condition
(financial or otherwise), results of operations, business, or assets of the Company or its Subsidiaries taken as a whole (a “Material
Adverse Change”); (ii) there have been no material transactions entered into by the Company or its Subsidiaries, other
than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position
with the Company.
2.5.2. Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution
on or in respect to its capital stock.
2.6. Independent
Accountants. To the knowledge of the Company Deloitte & Touche LLP (“Auditor”), whose report is
filed with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting
Oversight Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of
the Exchange Act.
2.7. Financial
Statements, etc. The financial statements, including the notes thereto and supporting schedules, if any, included
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present in all material respects the financial
position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements
have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), consistently applied
throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are
not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and any supporting schedules included
in the Registration Statement present fairly in all material respects the information required to be stated therein. Except as included
therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Pricing Disclosure
Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial
information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have
been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations
and present fairly in all material respects the information shown therein, and the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures
contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the Commission), if any, comply in all material respects with Regulation
G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including
contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material
current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity,
capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of its subsidiaries listed in Exhibit 21.1
to the Registration Statement (each, a “Subsidiary” and, collectively, the “Subsidiaries”), has
incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary
course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to
its Common Stock or preferred stock (c) there has not been any change in the capital of the Company or any of its Subsidiaries,
or, other than in the course of business, any grants under any stock compensation plan, and (d) there has not been any Material
Adverse Change in the Company’s long-term or short-term debt. The Company represents that it has no direct or indirect subsidiaries
other than (a) those listed in Exhibit 21.1 to the Registration Statement and (b) certain other subsidiaries which, considered in
the aggregate as a single subsidiary, do not constitute a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X.
2.8. Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the
adjusted capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure
Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option Closing Date, there
will be no options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued Common Stock or any security
convertible or exercisable into Common Stock, or any contracts or commitments to issue or sell Common Stock or any such options, warrants,
rights or convertible securities.
2.9. Valid
Issuance of Securities, etc.
2.9.1. Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have
been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect
thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation
of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The Common
Stock, preferred stock, and any other securities outstanding or to be outstanding upon consummation of the Offering conform in all material
respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
The offers and sales of the outstanding Common Stock were at all relevant times either registered under the Securities Act and the applicable
state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such shares,
exempt from such registration requirements.
2.9.2. Securities
Sold Pursuant to this Agreement. The Shares have been duly authorized for issuance and sale and, when issued and paid for, will be
validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of
being such holders; the Shares are not and will not be subject to the preemptive rights of any holders of any security of the Company
or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and
sale of the Shares has been duly and validly taken. The Shares conform in all material respects to all statements with respect thereto
contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.10. Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such securities of the Company under the Securities Act or to include any such securities
in a registration statement to be filed by the Company.
2.11. Validity
and Binding Effect of Agreements. This Agreement has been duly and validly authorized by the Company, and, when executed
and delivered, will constitute, the valid and binding agreement of the Company, enforceable against the Company in accordance with its
terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state
securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
2.12. No
Conflicts, etc. The execution, delivery and performance by the Company of this Agreement and all ancillary
documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with
the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result
in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the
creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant
to the terms of any agreement or instrument to which the Company is a party; (ii) result in any material violation of the provisions
of the Company’s Certificate of Incorporation (as the same may be amended or restated from time to time, the “Charter”)
or the by-laws of the Company; or (iii) material violate any existing applicable law, rule, regulation, judgment, order or decree
of any Governmental Entity as of the date hereof.
2.13. No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition
of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which
the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not (i) in violation
of any term or provision of its Charter or by-laws, or (ii) in violation of any franchise, license, permit, applicable law, rule,
regulation, judgment or decree of any Governmental Entity, except in the cases of clause (ii) for such violations which would not
reasonably be expected to cause a Material Adverse Change.
2.14. Corporate
Power; Licenses; Consents.
2.14.1. Conduct
of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has
all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits
of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except for the absence of which would not reasonably
be expected to have a Material Adverse Change.
2.14.2. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No
consent, authorization or order of, and no filing with, any court, government agency, the Exchange or other body is required for the valid
issuance, sale and delivery of the Shares and the consummation of the transactions and agreements contemplated by this Agreement and as
contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable Securities
Act Regulations, state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc.
(“FINRA”).
2.15. D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
as supplemented by all information concerning the Company’s directors, officers and principal shareholders as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.24 below),
provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which
would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.
2.16. Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed as required by the Securities Act or the Securities Regulations
in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.17. Good
Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under
the laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify,
singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.18. Insurance. The
Company carries or is entitled to the benefits of insurance, (including, without limitation, as to directors and officers insurance coverage),
with, to the Company’s knowledge, reputable insurers, in the amount of directors and officers insurance coverage at least equal
to $5,000,000 and the Company has included each Underwriter as an additional insured party to the directors and officers insurance coverage
and all such insurance is in full force and effect. The Company has no reason to believe that it will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as
may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.
2.19. Transactions
Affecting Disclosure to FINRA.
2.19.1. Finder’s
Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or
any Insider with respect to the sale of the Shares hereunder or any other arrangements, agreements or understandings of the Company or,
to the Company’s knowledge, any of its shareholders that may affect the Underwriters’ compensation, as determined by FINRA.
2.19.2. Payments
within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons
who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within the twelve (12) months immediately prior to the original filing
of the Registration Statement, other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.19.3. Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates,
except as specifically authorized herein.
2.19.4. FINRA
Affiliation. To the Company’s knowledge, and except as may otherwise be disclosed in FINRA questionnaires provided to the Representative’s
Counsel, there is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class of the Company’s
securities or (iii) beneficial owner of the Company’s unregistered equity securities which were acquired during the 180-day
period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating
in the Offering (as determined in accordance with the rules and regulations of FINRA).
2.19.5. Information.
All information provided by the Company in its FINRA questionnaire to Representative’s Counsel specifically for use by Representative’s
Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all
material respects.
2.20. Foreign
Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its
Subsidiaries, has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions
to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or
employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist
it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if
not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company has taken
reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects
with the Foreign Corrupt Practices Act of 1977, as amended.
2.21. Compliance
with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries,
is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.22. Money
Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect
to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
2.23. Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative’s
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.24. Lock-Up
Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers and directors,
as well as Donnie Schrader (collectively, the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties
to deliver to the Representative an executed Lock-Up Agreement, in a form substantially similar to that attached hereto as Exhibit A (the
“Lock-Up Agreement”), prior to the execution of this Agreement.
2.25. Subsidiaries.
All Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization or incorporation,
and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires
such qualification, except where the failure to qualify would not have a Material Adverse Change. The Company’s ownership and control
of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.26. 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 Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been
described as required by the Securities Act Regulations.
2.27. Board
of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the
Pricing Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members and
the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the
rules promulgated thereunder (the “Sarbanes-Oxley Act”) applicable to the Company and the listing rules of
the Exchange. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee
financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least
a majority of the persons serving on the Board of Directors qualify as “independent,” as defined under the listing rules of
the Exchange.
2.28. Sarbanes-Oxley
Compliance.
2.28.1. Disclosure
Controls. Except as disclosed in the Registration Statement, Pricing Disclosure Package and the Prospectus, the Company has developed
and currently maintains disclosure controls and procedures that will comply in all material respects with Rule 13a-15 or 15d-15
under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information concerning
the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s Exchange Act
filings and other public disclosure documents.
2.28.2. Compliance.
The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley
Act applicable to it, and has implemented or will implement such programs and has taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the
Sarbanes-Oxley Act.
2.29. Accounting
Controls. Except as disclosed in the Registration Statement, Pricing Disclosure Package and the Prospectus, the Company maintains
systems of “internal control over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange
Act Regulations) that comply in all material respects with the requirements of the Exchange Act and have been designed by, or under the
supervision of, its respective principal executive and principal financial officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any
material weaknesses in its internal control over financial reporting, and, if applicable, with respect to such remedial actions disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company represents that it has taken all remedial
actions set forth in such disclosure. The Company’s Auditor and the Audit Committee of the Board of Directors of the Company have
been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial
reporting which are known to the Company’s management and that have adversely affected or are reasonably likely to adversely affect
the Company’ ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s
management, whether or not material, that involves management or other employees who have a significant role in the Company’s internal
control over financial reporting.
2.30. No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register
as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.31. No
Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge
of the Company, is imminent.
2.32. Intellectual
Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions,
trade secrets and similar rights (“Intellectual Property Rights”) necessary for the conduct of the business of the
Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and
the Prospectus. To the knowledge of the Company and except as may be disclosed in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, no action or use by the Company or any of its Subsidiaries necessary for the conduct of its business as currently
carried on and as described in the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license
or similar fees for, any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries has received any written
notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably
be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there
is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there
is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the
Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for
any such claim, that would, individually or in the aggregate, together with any other claims in this Section 2.32,
reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to
the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware
of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other
claims in this Section 2.32, reasonably be expected to result in a Material Adverse Change; (D) there is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates
or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written
notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would,
individually or in the aggregate, together with any other claims in this Section 2.32, reasonably be expected to result
in a Material Adverse Change; and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation
in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition
agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis
of such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed with
the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s
knowledge, all material technical information developed by and belonging to the Company which has not been patented has been kept confidential.
The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any
other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus
and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects
the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company has been obtained
or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge,
any of its officers, directors or employees, or otherwise in violation of the rights of any persons.
2.33. Taxes.
Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior
to the date hereof or has duly obtained extensions of time for the filing thereof, except in any case in which the failure so to file
would not reasonably be expected to cause a Material Adverse Change. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter
defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective
Subsidiary, except for any such taxes that are currently being contested in good faith or as would not reasonably be expected to cause
a Material Adverse Change. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration
Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of
such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no issues have been raised (and
are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its
Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by
or requested from the Company or its Subsidiaries. The term “taxes” means all federal, state, local, foreign and other net
income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with
respect thereto. The term “returns” means all returns, declarations, reports, statements and other documents required to be
filed in respect to taxes.
2.34. ERISA
Compliance. The Company is not subject to the Employee Retirement Income Security Act of 1974, as amended, or the
regulations and published interpretations thereunder.
2.35. Compliance
with Laws. Except as otherwise disclosed in the Registration Statement, Pricing Disclosure Package and Prospectus and as
could not, individually or in the aggregate, be expected to result in a Material Adverse Change, each of the Company and each Subsidiary,
the Company: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable to the services
provided by the Company (“Applicable Laws”), except as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Change; (B) has not received any warning letter, untitled letter or other correspondence or written notice
from any other governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”);
(C) possesses all material Authorizations and such material Authorizations are valid and in full force and effect and are not in
material violation of any term of any such Authorizations; (D) has not received written notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action from any governmental authority or third party alleging that any product
operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority
or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding that if brought would
result in a Material Adverse Change; (E) has not received written notice that any Governmental Authority has taken, is taking or
intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Authority
is considering such action; (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material
respects on the date filed (or were corrected or supplemented by a subsequent submission); and (G) has not, either voluntarily or
involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement,
safety alert, post-sale warning, or other notice or action relating to the alleged lack of safety of any product or any alleged product
defect or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice
or action.
2.36. Ineligible
Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of
effectiveness of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Shares
and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking
account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible
issuer.
2.37. Real
Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the
Company and its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items
of real or personal property which are material to the business of the Company and its Subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect
the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company or
its Subsidiaries; and all of the leases and subleases material to the business of the Company and its Subsidiaries, considered as one
enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any written
notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under
any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased premises under any such lease or sublease.
2.38. Contracts
Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any
of its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s or its Subsidiaries’ liquidity or the availability of or requirements for their capital resources required
to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus which have not been described as required.
2.39. Loans
to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses
in the ordinary course of business) or guarantees or indebtedness by the Company or its Subsidiaries to or for the benefit of any of the
officers or directors of the Company, its Subsidiaries or any of their respective family members, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus.
2.40. Industry
Data; Forward-looking statements. The statistical and market-related data included in each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes
are reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
2.41. Electronic
Road Show. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of
the Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities
Act Regulations) is required in connection with the Offering.
2.42. Margin
Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board
of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will
be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any
of the Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve
Board.
2.43. Dividends
and Distributions. Except as disclosed in the Pricing Disclosure Package, Registration Statement and the Prospectus, no
Subsidiary of the Company is currently prohibited or restricted, directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary’s capital stock from repaying to the Company any loans or advances to such Subsidiary
from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary of the
Company.
2.44. Lending
Relationships. Except as disclosed in the Pricing Disclosure Package, Registration Statement and the Prospectus, the Company
(i) does not have any material lending or other relationship with any bank or lending affiliate of the Underwriters and (ii) does
not intend to use any of the proceeds from the sale of the Shares hereunder to repay any outstanding debt owed to any affiliate of the
Underwriters.
2.45. Smaller
Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act Regulations.
2.46. Emerging
Growth Company. From the time of the initial confidential submission of the Registration Statement to the Commission (or,
if earlier, the first date on which the Company engaged directly in or through any Person authorized to act on its behalf in any Testing-the
Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section
2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means any
oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.
2.47. Testing-the-Waters
Communications. The Company has not (i) alone engaged in any Testing-the-Waters Communications, other than Testing-the-Waters
Communications with the written consent of the Representative and with entities that are qualified institutional buyers within the meaning
of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities
Act and (ii) authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company confirms that
the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed
any Written Testing-the-Waters Communications other than those listed on Schedule 2-C hereto. “Written Testing-the-Waters
Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the
Securities Act.
2.48. Directed
Share Program. The Company represents and warrants that (i) the Registration Statement, the Pricing Disclosure Package and the
Prospectus, any Preliminary Prospectus and any Issuer Free Writing Prospectuses comply in all material respects, and any further amendments
or supplements thereto will comply in all material respects, with any applicable laws or regulations of foreign jurisdictions in which
the Pricing Disclosure Package, the Prospectus, any Preliminary Prospectus and any Issuer Free Writing Prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program, and that (ii) no authorization, approval, consent, license,
order, registration or qualification of or with any government, governmental instrumentality or court, other than such as have been obtained,
is necessary under the securities laws and regulations of foreign jurisdictions in which the Directed Shares are offered outside the United
States. The Company has not offered, or caused the Underwriters to offer, Shares to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (i) a client or prospective client of the Company to alter the client’s or prospective
client’s level or type of business with the Company, or (ii) a trade journalist or publication to write or publish favorable information
about the Company or its business.
2.48. Reverse
Stock Split. The Company has taken all necessary corporate action to effectuate a reverse stock split of its shares of Common
Stock on the basis of one (1) such share for each 1.6820384 issued and outstanding shares thereof (the “Reverse Stock Split”),
such Reverse Stock Split to be effective no later than the first trading day of the Firm Shares following the date hereof.
3. Covenants
of the Company. The Company covenants and agrees as follows:
3.1. Amendments
to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement
to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement
to which the Representative shall reasonably object in writing.
3.2. Federal
Securities Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply in all material respects with the requirements of Rule 430A
of the Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed;
(ii) of the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant
to Section 8(d)or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company becomes the subject
of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Shares. The Company shall effect all
filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without
reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company shall use its reasonable best efforts to prevent the issuance of any stop order, prevention
or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2. Continued
Compliance. The Company shall comply in all material respects with the Securities Act, the Securities Act Regulations, the Exchange
Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Shares as contemplated in this Agreement
and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the
Shares is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in connection with sales of the Shares, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration
Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading; (ii) amend or supplement the Pricing
Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include
any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or
amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of
the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event;
(B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement,
the Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed
filing or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such
amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the
Representative or Representative’s Counsel shall reasonably object. The Company will furnish to the Underwriters such number of
copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of
any filings made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company
shall give the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing
Date and the exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will
furnish the Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the
case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.
3.2.3. Exchange
Act Registration. Until three (3) years after the date of this Agreement, the Company shall use its commercially reasonable efforts
to maintain the registration of the Common Stock under the Exchange Act.
3.2.4. Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior consent of the Representative, it shall not make any offer
relating to the Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing
prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that
the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus set forth in Schedule
2-B. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed
consented to, by the Underwriters as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied
and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where
required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained
in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not
misleading, the Company will promptly notify the 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.
3.2.5. Testing-the-Waters
Communications. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs
an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement
of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances existing at that subsequent time, not misleading, the Company shall promptly notify the Representative and shall promptly
amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or
omission.
3.3. Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and Representative’s Counsel, without charge, signed copies of the Registration Statement as originally filed
and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and upon
request will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and
each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
3.4. Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available
to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Shares is (or, but for the exception afforded by Rule 172, would
be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter
may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.5 Effectiveness
and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement
to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative
immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto;
(ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose;
(iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Public
Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of
the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of
the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event
during the period described in this Section 3.5 that, in the judgment of the Company, makes any statement of a material fact made
in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a)
the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus
in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or
any state securities commission shall enter a stop order or suspend such qualification at any time, the Company shall make every reasonable
effort to obtain promptly the lifting of such order.
3.6. Review
of Financial Statements. For a period of three (3) years after the date of this Agreement, the Company, at
its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s
financial statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7. Listing. The
Company shall use its commercially reasonable efforts to maintain the listing of the Shares on the Exchange for at least three (3) years
from the date of this Agreement.
3.8. Financial
Public Relations Firm. As of the Effective Date, the Company shall have retained a financial public relations firm reasonably
acceptable to the Representative and the Company, which shall initially be Financial Profiles, which firm shall be experienced in assisting
issuers in initial public offerings of securities and in their relations with their security holders, and shall retain such firm or another
firm reasonably acceptable to the Representative for a period of not less than one (1) year after the Effective Date.
3.9. Reports
to the Representative.
3.9.1. Periodic
Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available
to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes
generally to holders of any class of its securities and also furnish or make available to the Representative: (i) a copy of each
periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a
copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company;
(iii) a copy of each Form 8-K prepared and filed by the Company; (iv) a copy of each registration statement filed by the
Company under the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of
any future subsidiaries of the Company as the Representative may from time to time reasonably requests; provided the
Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable
to the Representative and Representative’s Counsel in connection with the Representative’s receipt of such information. Documents
filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1.
3.9.2. Transfer
Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer
agent and registrar acceptable to the Representative (the “Transfer Agent”) and shall furnish to the Representative
at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Continental Stock Transfer &
Trust Company is acceptable to the Representative to act as Transfer Agent for the Common Stock.
3.9.3. Trading
Reports. For a period of six (6) months after the date hereof, during such time as the Shares are listed on the Exchange, the
Company shall provide to the Representative, at the Company’s expense, such reports published by the Exchange relating to price
trading of the Shares, as the Representative shall reasonably request.
3.10. Payment
of Expenses
3.10.1. General
Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any,
to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement,
including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Shares to be sold
in the Offering (including the Over-allotment Option) with the Commission; (b) all Public Filing System filing fees associated with
the review of the Offering by FINRA; (c) all fees, expenses and disbursements relating to the registration, qualification or exemption
of the Shares under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (d) the costs
associated with receiving commemorative mementos and lucite tombstones; (e) fees and expenses of the Representative’s Counsel;
and (f) the Underwriters’ “road show” expenses for the Offering, with all of the Underwriters’ actual out-of-pocket
expenses under sub-sections 3.10.1(d)-(f) not to exceed $162,900. The Representative may deduct from the net proceeds of the Offering
payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company
to the Underwriters; provided, however, that in the event that the Offering is terminated, the Company agrees
to reimburse the Underwriters pursuant to Section 6.3 hereof.
3.11. Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent
with the application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
3.12. Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon
as practicable, but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement,
an earnings statement (which need not be certified by an independent registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of
the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13. Stabilization. Neither
the Company nor, to its knowledge, any of its employees, directors or shareholders has taken or shall take, directly or indirectly, any
action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M of the Exchange
Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
3.14. Internal
Controls. Except to the extent disclosed in the Registration Statement, Pricing Disclosure Package and Prospectus, the
Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions
are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary
in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
3.15. Accountants.
As of the date of this Agreement, the Company has retained an independent registered public accounting firm reasonably acceptable to the
Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period
of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor is acceptable to the
Representative.
3.16. FINRA.
For a period of ninety (90) days from the later of the Closing Date or the Option Closing Date, the Company shall advise the Representative
(who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii) any
beneficial owner of 5% or more of any class of the Company's securities or (iii) any beneficial owner of the Company's unregistered
equity securities which were acquired during the 180 days immediately preceding the filing of the original Registration Statement is or
becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and
regulations of FINRA).
3.17. No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary
capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions
contemplated by this Agreement.
3.18. Company
Lock-Up.
3.18.1. Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent
of the Representative, it will not, for a period of six months (6) months after the date of this Agreement (the “Lock-Up Period”),
(i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant or modify the terms of any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable
for shares of capital stock of the Company or modify the terms of any existing securities, in each case, whether in conjunction with another
broker-dealer or on the Company’s own volition; (ii) file or cause to be filed any registration statement with the Commission
relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable
for shares of capital stock of the Company (other than pursuant to a registration statement on Form S-8 for employee benefit plans);
or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii) or (iii) above is to
be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise. The restrictions contained
in this section shall not apply to (i) the Shares to be sold hereunder; and (ii) the issuance by the Company of Common Stock
upon the exercise of an outstanding option or warrant or the conversion of a security outstanding on the date hereof or disclosed in the
Registration Statement and the Pricing Disclosure Package.
Notwithstanding the foregoing,
if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating
to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results
or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period,
the restrictions imposed by this Section 3.18 shall continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives,
in writing, such extension; provided, however, that this extension of the Lock-Up Period shall not apply to the extent that FINRA has
amended or repealed NASD Rule 2711(f)(4), or has otherwise provided written interpretive guidance regarding such rule, in each case, so
as to eliminate the prohibition of any broker, dealer, or member of a national securities association from publishing or distributing
any research report, with respect to the securities of an Emerging Growth Company prior to or after the expiration of any agreement between
the broker, dealer, or member of a national securities association and the Emerging Growth Company or its shareholders that restricts
or prohibits the sale of securities held by the Emerging Growth Company or its shareholders after the initial public offering date.
3.18.2. Restriction
on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and any successor
entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 12 months after the date of
this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer to sell, sell, contract
to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for shares of capital stock of the Company.
3.19. Release
of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set
forth in the Lock-Up Agreements described in Section 2.24 hereof for an officer or director of the Company and provides
the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release
or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto
through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20. Blue
Sky Qualifications. The Company shall use its commercially reasonable efforts, in cooperation with the Underwriters,
if necessary, to qualify the Shares for offering and sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete
the distribution of the Shares; provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
3.21. Reporting
Requirements. The Company, during the period when a prospectus relating to the Shares is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally,
the Company shall report the use of proceeds from the issuance of the Shares as may be required under Rule 463 under the Securities
Act Regulations.
3.22. Emerging
Growth Company Status. The Company shall promptly notify the Representative if the Company ceases to be an Emerging Growth Company
at any time prior to the later of (i) completion of the distribution of the Public Securities within the meaning of the Securities Act
and (ii) fifteen (15) days following the completion of the Lock-Up Period.
3.23. Directed
Share Program. The Company will comply with all applicable securities and other laws, rules and regulations in each jurisdiction
in which the Directed Shares are offered in connection with the Directed Share Program.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Shares, as provided herein, shall
be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each
of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant
to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:
4.1. Regulatory
Matters.
4.1.1. Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:00 p.m.,
Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at each of the
Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information.
The Prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time
frame required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information
shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.
4.1.2. FINRA
Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount of
compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange
Share Market Clearance. On the Closing Date, the Firm Shares shall have been approved for listing on the Exchange, subject only to
official notice of issuance. On the first Option Closing Date (if any), the Option Shares shall have been approved for listing on the
Exchange, subject only to official notice of issuance.
4.2. Company
Counsel Matters.
4.2.1. Closing
Date Opinion of Counsel for the Company. On the Closing Date, the Representative shall have received the favorable opinion and negative
assurances statement of Manatt, Phelps & Phillips LLP, counsel for the Company, dated the Closing Date, in form and substance reasonably
satisfactory to Representative’s Counsel addressed to the Representative and stating that such opinions may be relied upon by Representative’s
Counsel.
4.2.3. Option
Closing Date Opinion of Counsel for the Company. On the Option Closing Date, if any, the Representative shall have received the favorable
opinion and negative assurances statement of Manatt, Phelps & Phillips LLP, counsel for the Company, dated the Option Closing Date,
addressed to the Representative and in form and substance reasonably satisfactory to the Representative’s Counsel, confirming as
of the Option Closing Date, the statements made by such counsel in their opinions delivered on the Closing Date.
4.2.5. Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other counsel
reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent they
deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing of the Company, provided that copies
of any such statements or certificates shall be delivered to Representative’s Counsel if requested.
4.3. Comfort
Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter containing statements and information
of the type customarily included in accountants’ comfort letters with respect to the financial statements and certain financial
information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed to the Representative
and in form and substance satisfactory in all material respects to you and to the Auditor, dated as of the date of this Agreement.
4.3.2. Bring-down
Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from the Auditor
a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms the statements
made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date
not more than three (3) Business Days prior to the Closing Date or the Option Closing Date, as applicable.
4.4. Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date
(if such date is other than the Closing Date), of its Chief Executive Officer, its President and its Chief Financial Officer stating on
behalf of the Company and not in an individual capacity that (i) such officers have carefully examined the Registration Statement,
the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement
and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than
the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and
as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as
of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each
amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of
a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
in which they were made, not misleading, (ii) since the Effective Date of the Registration Statement, no event has occurred which
should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus,
(iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such
date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct in all
material respects (except for those representations and warranties qualified as to materiality, which shall be true and correct in all
respects and except for those representations and warranties which refer to facts existing at a specific date, which shall be true and
correct as of such date) and the Company has complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iv) there
has not been, subsequent to the date of the most recent audited financial statements included in the Pricing Disclosure Package, a Material
Adverse Change.
4.4.2. Secretary’s
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively, certifying
on behalf of the Company and not in an individual capacity: (i) that each of the Charter and Bylaws is true and complete, has not
been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors (and any pricing
committee thereof) relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and
completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers
of the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5. No
Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall
have been no Material Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or, to the knowledge of the Company, threatened
against the Company or any Insider before or by any court or federal or state commission, board or other administrative agency wherein
an unfavorable decision, ruling or finding may reasonably be expected to cause a Material Adverse Change, except as set forth in the Registration
Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued by the Commission under
the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration
Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements
which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in
all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement,
the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
4.6. Delivery
of Agreements.
4.6.1. Lock-Up
Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the
Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.6.2 Reverse
Stock Split. Not later than the first trading day of the Firm Shares following the date hereof, the Reverse Stock Split shall be effective.
4.7. Additional
Documents. At the Closing Date and at each Option Closing Date (if any) Representative’s Counsel shall have been
furnished with such documents and opinions as they may require for the purpose of enabling Representative’s Counsel to deliver an
opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Shares as
herein contemplated shall be satisfactory in form and substance to the Representative and Representative’s Counsel.
5. Indemnification.
5.1. Indemnification
of the Underwriters.
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify, defend and hold harmless each Underwriter, its affiliates
and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates, counsel,
and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each an “Underwriter
Indemnified Party”), from and against any and all loss, liability, claim, damage and expense whatsoever (including but not limited
to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company
or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject
under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries (a
“Claim”), arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained,
or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in (A) the Registration Statement, the Pricing Disclosure
Package, any Preliminary Prospectus, the Prospectus, or in any Issuer Free Writing Prospectus or in any Written Testing-the-Waters Communication
(as from time to time each may be amended and supplemented); (B) any materials or information provided to investors by, or with
the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations
made to investors by the Company (whether in person or electronically); or (C) any application or other document or written communication
(in this Section 5, collectively called “application”) executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Shares under the securities laws thereof or filed with the Commission,
any state securities commission or agency, the Exchange or any other national securities exchange; unless, with respect to
each subsection (A) through (C), such statement or omission was made in reliance upon, and in conformity with, the Underwriters’
Information. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement,
Pricing Disclosure Package or Prospectus, the indemnity agreement contained in this Section 5.1.1 shall not inure
to the benefit of any Underwriter Indemnified Party to the extent that any loss, liability, claim, damage or expense of such Underwriter
Indemnified Party results from the fact that a copy of the Prospectus was not given or sent to the person asserting any such loss, liability,
claim or damage at or prior to the written confirmation of sale of the Shares to such person as required by the Securities Act and the
Securities Act Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver
the Prospectus was a result of non-compliance by the Company with its obligations under Section 3.3 hereof. The
Company also agrees that it will reimburse each Underwriter Indemnified Party for all reasonable fees and expenses for which documentation
of such is provided to the Company (including but not limited to any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between
any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party,
or otherwise) (collectively, the “Expenses”).
5.1.2. Procedure.
If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company pursuant
to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the approval
of such Underwriter Indemnified Party (which approval shall not be unreasonably withheld)) and payment of actual expenses if an Underwriter
Indemnified Party requests that the Company do so. Such Underwriter Indemnified Party shall have the right to employ its or their own
counsel in any such case, and upon the written authorization of the Company (which authorization shall not be unreasonably withheld),the
fees and expenses of such counsel shall be at the expense of the Company and shall be advanced by the Company, provided, however,
that the Company shall not be obligated to bear the reasonable fees and expenses of more than one firm of attorneys selected by the Underwriter
Indemnified Party (in addition to local counsel). Notwithstanding anything to the contrary contained herein, and provided that the Company
has timely honored its obligations under Section 5, the Underwriter Indemnified Party shall not enter into any settlement
without the prior written consent (which shall not be unreasonably withheld) of the terms of any settlement by the Company. The Company
shall not be liable for any settlement of any action effected without its prior written consent (which shall not be unreasonably withheld).
In addition, the Company shall not, without the prior written consent of the Underwriter Indemnified Party (which consent shall not be
unreasonably withheld), settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened
action in respect of which reimbursement, indemnification or contribution may be sought hereunder (whether or not such Underwriter Indemnified
Party is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each
Underwriter Indemnified Party, reasonably acceptable to such Underwriter Indemnified Party, from all liabilities, expenses and claims
arising out of such action for which indemnification or contribution may be sought and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or on behalf of any Underwriter Indemnified Party.
5.2. Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing
indemnity from the Company to the several Underwriters, as incurred, but only with respect to such losses, liabilities, claims, damages
and expenses (or actions in respect thereof) which arise out of or are based upon untrue statements or omissions, or alleged untrue statements
or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment
or supplement thereto or in any application, in reliance upon, and in conformity with, the Underwriters’ Information. In case any
action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement,
the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity
may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each
other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2.
The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any
of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, in connection with the issuance and sale of the Shares or in connection with the Registration
Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication.
5.3. Contribution. If
the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 5.1 or 5.2 in respect of any liabilities and Expenses referred to therein, then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such
liabilities and Expenses, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and each of the Underwriters, on the other hand, from the Offering, or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the matters as to which such liabilities or Expenses relate, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall be
deemed to be in the same proportion as the total net proceeds actually received by the Company from the Offering of the Shares purchased
under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions actually
received by the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company, on the one hand, and the Underwriters, on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or the Underwriters, on the other, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such untrue statement, omission, act or failure to act; provided that
the parties hereto agree that the written information furnished to the Company through the Representative by or on behalf of any Underwriter
for use in any Preliminary Prospectus, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, consists
solely of the Underwriters’ Information. The Company and the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to above in
this subsection (d). Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the Securities Act shall be entitled to contribution from a party who was not guilty of such fraudulent misrepresentation.
5.4. Limitation.
The Company also agrees that no Underwriter Indemnified Party shall have any liability (whether direct or indirect, in contract or tort
or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Underwriter Indemnified Party
pursuant to this Agreement, the transactions contemplated thereby or any Underwriter Indemnified Party’s actions or inactions in
connection with any such advice, services or transactions, except to the extent that a court of competent jurisdiction has made a finding
that liabilities (and related Expenses) of the Company have resulted from such Underwriter Indemnified Party’s fraud, bad faith,
gross negligence or willful misconduct in connection with any such advice, actions, inactions or services or such Underwriter Indemnified
Party’s breach of this Agreement or any obligations of confidentiality owed to the Company.
5.5. Survival &
Third-Party Beneficiaries. The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 5
shall remain in full force and effect regardless of any termination of, or the completion of any Underwriter Indemnified Party’s
services under or in connection with, this Agreement. Each Underwriter Indemnified Party’s is an intended third-party beneficiary
of this Section 5, and has the right to enforce the provisions of Section 5 as if he/she/it was a party to this Agreement.
5.6. Directed
Share Program Indemnification.
5.6.1. Indemnification.
The Company agrees to indemnify and hold harmless the Underwriters, their affiliates, directors and officers and each person, if any,
who controls an Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act
(each a “Directed Share Underwriter Entity”) from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal fees and other expenses incurred in connection with defending or investigating any suit, action or proceeding
or any claim asserted, as such fees and expenses are incurred) (i) caused by any untrue statement or alleged untrue statement of
a material fact contained in any material prepared by or with the consent of the Company for distribution to Participants in connection
with the Directed Share Program or caused by any omission or alleged omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading; (ii) caused by the failure of any Participant
to pay for and accept delivery of Directed Shares that the Participant agreed to purchase; or (iii) related to, arising out of,
or in connection with the Directed Share Program, other than losses, claims, damages or liabilities (or expenses relating thereto) that
are finally judicially determined to have resulted from the bad faith or gross negligence of the Directed Share Underwriter Entities.
5.6.2 Procedure.
In case any proceeding (including any governmental investigation) shall be instituted involving any Directed Share Underwriter Entity
in respect of which indemnity may be sought pursuant to paragraph 5.6.1 above, the Directed Share Underwriter Entity seeking indemnity
shall promptly notify the Company in writing and the Company, upon request of the Directed Share Underwriter Entity, shall retain counsel
reasonably satisfactory to the Directed Share Underwriter Entity to represent the Directed Share Underwriter Entity and any others the
Company may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any Directed Share Underwriter Entity shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Directed Share Underwriter Entity unless (i) the Company and such Directed Share Underwriter
Entity shall have mutually agreed to the retention of such counsel, (ii) the Company has failed within a reasonable time to retain counsel
reasonably satisfactory to such Directed Share Underwriter Entity, (iii) the Directed Share Underwriter Entity shall have reasonably concluded
that there may be legal defenses available to it that are different from or in addition to those available to the Company or (iv) the
named parties to any such proceeding (including any impleaded parties) include both the Company and the Directed Share Underwriter Entity
and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.
The Company shall not, in respect of the legal expenses of the Directed Share Underwriter Entities in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Directed Share Underwriter Entities. The Company shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent, the Company agrees to indemnify the Directed Share Underwriter Entities from and
against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time any Directed Share
Underwriter Entity shall have requested the Company to reimburse such Directed Share Underwriter Entity for fees and expenses of counsel
as contemplated by the second and third sentences of this paragraph, the Company agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Company
of the aforesaid request and (ii) the Company shall not have reimbursed such Directed Share Underwriter Entity in accordance with such
request prior to the date of such settlement. The Company shall not, without the prior written consent of the Directed Share Underwriter
Entities, effect any settlement of any pending or threatened proceeding in respect of which any Directed Share Underwriter Entity is or
could have been a party and indemnity could have been sought hereunder by such Directed Share Underwriter Entity, unless (x) such settlement
includes an unconditional release of the Directed Share Underwriter Entities from all liability on claims that are the subject matter
of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf
of the Directed Share Underwriter Entity.
5.6.3 Contribution.
To the extent the indemnification provided for in paragraph 5.6.1 above is unavailable to a Directed Share Underwriter Entity or insufficient
in respect of any losses, claims, damages or liabilities referred to therein, then the Company in lieu of indemnifying the Directed Share
Underwriter Entity thereunder, shall contribute to the amount paid or payable by the Directed Share Underwriter Entity as a result of
such losses, claims, damages or liabilities (1) in such proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Directed Share Underwriter Entities on the other hand from the offering of the Directed Shares or (2)
if the allocation provided by clause 5.6.3(1) above is not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 5.6.3(1) above but also the relative fault of the Company on the one hand and of
the Directed Share Underwriter Entities on the other hand in connection with any statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Directed Share Underwriter Entities on the other hand in connection with the offering of the Directed Shares shall
be deemed to be in the same respective proportions as the net proceeds from the offering of the Directed Shares (before deducting expenses)
and the total underwriting discounts and commissions received by the Directed Share Underwriter Entities for the Directed Shares, bear
to the aggregate public offering price of the Directed Shares. If the loss, claim, damage or liability is caused by an untrue or alleged
untrue statement of material fact or the omission or alleged omission to state a material fact, the relative fault of the Company on the
one hand and the Directed Share Underwriter Entities on the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement or the omission or alleged omission relates to information supplied by the Company or by the Directed
Share Underwriter Entities and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Directed
Share Underwriter Entities agree that it would be not just or equitable if contribution pursuant to the paragraph above were determined
by pro rata allocation (even if the Directed Share Underwriter Entities were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations referred to in the paragraph above. The amount paid or payable
by the Directed Share Underwriter Entities as a result of the losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by the
Directed Share Underwriter Entities in connection with investigating or defending such any action or claim. Notwithstanding the provisions
of the paragraph above, no Directed Share Underwriter Entity shall be required to contribute any amount in excess of the amount by which
the total price at which the Directed Shares distributed to the public were offered to the public exceeds the amount of any damages that
such Directed Share Underwriter Entity has otherwise been required to pay. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in paragraphs 5.6.1 through 5.6.3 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
5.6.4. Survival.
The indemnity and contribution provisions contained in paragraphs 5.6.1 through 5.6.4 shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Directed Share Underwriter Entity
or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Directed
Shares.
6. Default
by an Underwriter.
6.1.
Default Not Exceeding 10% of Firm Shares or Option Shares. If any Underwriter or Underwriters shall default in its or their
obligations to purchase the Firm Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of
the Firm Shares or Option Shares with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm
Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Option Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2.
Default Exceeding 10% of Firm Shares or Option Shares. In the event that the default addressed in Section 6.1 relates to
more than 10% of the Firm Shares or Option Shares, the Representative may in its discretion arrange for itself or for another party or
parties to purchase such Firm Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1)
Business Day after such default relating to more than 10% of the Firm Shares or Option Shares, such Representative does not arrange for
the purchase of such Firm Shares or Option Shares, then the Company shall be entitled to a further period of one (1) Business Day within
which to procure another party or parties satisfactory to the Representative to purchase said Firm Shares or Option Shares on such terms.
In the event that neither the Representative nor the Company arrange for the purchase of the Firm Shares or Option Shares to which a default
relates as provided in this Section 6, this Agreement will automatically be terminated by the Representative or the Company without liability
on the part of the Company (except as provided in Sections 8.3 and 5 hereof) or the several Underwriters (except as provided in Section
5 hereof); provided, however, that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the
Firm Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other
Underwriters and to the Company for damages occasioned by its default hereunder.
6.3.
Postponement of Closing Date. In the event that the Firm Shares or Option Shares to which the default relates are to be
purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the
Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding
five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure
Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration
Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary.
The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 6with like effect
as if it had originally been a party to this Agreement with respect to such Firm Shares or Option Shares.
7. Effective
Date of this Agreement and Termination Thereof.
7.1. Effective
Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
7.2. Termination. The
Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international
event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially disrupt, general securities
markets in the United States; or (ii) if trading on the New York Stock Exchange or the Nasdaq Stock Market LLC shall have been suspended
or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall
have been required by FINRA or by order of the Commission or any other government authority having jurisdiction; or (iii) if the
United States shall have become involved in a new war or an increase in major hostilities; or (iv) if a banking moratorium has been
declared by a New York State or federal authority; or (v) if a moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured,
will, in your opinion, make it inadvisable to proceed with the delivery of the Firm Shares or Option Shares; or (vii) if the Company
is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have
become aware after the date hereof of such a Material Adverse Change, or such adverse material change in general market conditions as
in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Shares or
to enforce contracts made by the Underwriters for the sale of the Shares.
7.3. Expenses. Notwithstanding
anything to the contrary in this Agreement, in the event that this Agreement shall not be carried out for any reason whatsoever, within
the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters
their actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable up to the amounts
set forth in Section 3.10.1 and upon demand the Company shall pay such amount thereof to the Representative on
behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the indemnification
and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative will be reimbursed
to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).
7.4. Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether
or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect
and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part
hereof.
7.5. Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company or (ii) delivery of and payment for the Shares.
8. Miscellaneous.
8.1. Notices. All
communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered or certified
mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be deemed given when so
delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
Spartan Capital Securities, LLC
45 Broadway
New York, NY 10006
Attn: Kim Monchik
Fax No. (212) 785-4565
With a copy (which shall not constitute notice) to:
Bevilacqua PLLC
1050 Connecticut Ave, NW, Suite 500
Washington, DC 20036
Attention: Louis A. Bevilacqua
Fax No: 202-869-0889
If to the Company:
Calibercos Inc.
8901 E. Mountain View Road, Ste., 150
Scottsdale, Arizona 85258
Attention: John C. Loeffler, II
Fax No: (480) 455-6480
With
a copy (which shall not constitute notice) to:
Manatt, Phelps & Phillips LLP
695 Town Center Drive, 14th Floor
Costa Mesa, CA 92626
Attention: Thomas J. Poletti, Esq.
Attention: Veronica Lah, Esq.
Fax No: (714) 371-2551
8.2. Headings. The
headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this Agreement.
8.3. Amendment. This
Agreement may only be amended by a written instrument executed by each of the parties hereto.
8.4. Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection
with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding
anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that
certain engagement letter between the Company and Spartan Capital Securities, LLC, dated July 11, 2022, as such engagement letter may
be amended from time to time, shall remain in full force and effect.
8.5. Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and
assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
8.6. Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any
action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the New
York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting
a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8.1 hereof.
Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The
Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable
attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor.
The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its Shareholders and affiliates) and each of the
Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
8.7. Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the
same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to
each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute
valid and sufficient delivery thereof.
8.8. Waiver, etc.
The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of
any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or
non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment
shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
[Signature Page Follows]
If the foregoing correctly
sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
| Very truly yours, |
|
| |
|
| Calibercos Inc. |
|
| |
|
| By: |
/s/ John C. Loeffler, II |
|
| |
Name: John C. Loeffler, II |
|
| |
Title: Chief Executive Officer |
|
Confirmed as of the date first written above mentioned, on behalf of
itself and as Representative of the several Underwriters named on Schedule 1 hereto:
| Spartan Capital Securities, LLC |
|
| |
|
| By: |
/s/ Kim Monchik |
|
| |
Name: Kim Monchik |
|
| |
Title: Chief Administrative Officer |
|
SCHEDULE 1
| Underwriter | |
Total
Number
of
Firm
Shares
to be
Purchased | | |
Number of
Additional
Option Shares
to be
Purchased if the
Over-
Allotment
Option is
Fully Exercised | |
| Spartan Capital Securities, LLC | |
| 1,200,000 | | |
| 180,000 | |
| TOTAL | |
| 1,200,000 | | |
| 180,000 | |
SCHEDULE 2-A
Pricing Information
Number of Firm Shares: 1,200,000
Number of Option Shares: 180,000
Public Offering Price per Firm Share: $4.00
Public Offering Price per Option Share: $4.00
Underwriting Discount per Firm Share: $0.32
Underwriting Discount per Option Share: $0.32
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
SCHEDULE 2-C
Written Testing-the-Waters Communications
SCHEDULE 3
List of Lock-Up Parties
EXHIBIT A
Form of Lock-Up Agreement
EXHIBIT B
Form of Press Release
