UNDERWRITING
AGREEMENT
between
DOCUMENT
SECURITY SYSTEMS, INC.
and
AEGIS
CAPITAL CORP.,
as
Representative of the Several Underwriters
DOCUMENT
SECURITY SYSTEMS, INC.
UNDERWRITING
AGREEMENT
New
York, New York
June
5, 2019
Aegis
Capital Corp.
As
Representative of the several Underwriters named on Schedule 1 attached hereto
810
Seventh Avenue, 18th Floor
New
York, New York 10019
Ladies
and Gentlemen:
The
undersigned, Document Security Systems, Inc., a corporation formed under the laws of the State of New York (collectively with
its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement
(as hereinafter defined) as being subsidiaries or affiliates of Document Security Systems, Inc., the “Company”),
hereby confirms its agreement (this “Agreement”) with Aegis Capital Corp. (hereinafter referred to as “you”
(including its correlatives) or the “Representative”) and with the other underwriters named on Schedule
1 hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively
called the “Underwriters” or, individually, an “Underwriter”) as follows:
1.
Purchase and Sale of Securities.
1.1
Firm Shares.
1.1.1
Nature and Purchase of Firm Shares.
(i)
On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to issue and sell to the several Underwriters, an aggregate of 11,200,000 (the “Firm Shares”)
of the Company’s common stock, par value $0.002 per share (the “Common Stock”).
(ii)
The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their
respective names on Schedule 1 attached hereto and made a part hereof at the purchase price of $0.46 per Firm Share (92%
of the per Firm Share offering price) with respect to each Firm Share. The Firm Shares are to be offered to the public at the
offering price set forth on the cover page of the Prospectus (as defined in Section 2.1 hereof).
1.1.2
Firm Shares Payment and Delivery.
(i)
Delivery and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time, on the second (2nd) Business Day
following the date of this Agreement or at such earlier time as shall be agreed upon by the Representative and the Company, at
the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154 (“Representative Counsel”), or at such
other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm Shares is called the “Closing Date.”
(ii)
Payment for the Firm Shares shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order
of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm
Shares (or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters.
The Firm Shares shall be registered in such name or names and in such authorized denominations as the Representative may request
in writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver
the Firm Shares except upon tender of payment by the Representative for all of the Firm Shares. The term “Business Day”
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated
by law to close in New York, New York.
1.2
Over-allotment Option.
1.2.1
Additional Shares. The Company hereby grants to the Representative an option (the “Over-allotment Option”)
to purchase up to an additional 1,680,000 shares of Common Stock, representing up to 15% of the Firm Shares sold in the Offering
(the “Additional Shares”) for the purpose of covering over-allotments of such securities, if any. The Firm
Shares and the Additional Shares are collectively referred to as the “Securities.” The Securities shall be
issued directly by the Company and shall have the rights and privileges described in the Registration Statement, the Disclosure
Package and the Prospectus referred to below. The offering and sale of the Securities is herein referred to as the “Offering.”
1.2.2
Exercise of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative
as to all (at any time) or any part (from time to time) of the Additional Shares within 45 days after the date hereof. The purchase
price to be paid per Additional Share shall be equal to the price per Firm Share set forth in Section 1.1.1(ii) hereof. The Representative
shall not be under any obligation to purchase any Additional Shares prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which shall be confirmed
in writing by overnight mail or facsimile or other electronic transmission, setting forth the number of Additional Shares to be
purchased and the date and time for delivery of and payment for the Additional Shares (the “Option Closing Date”),
which shall not be later than two (2) full Business Days after the date of the notice or such other time as shall be agreed upon
by the Company and the Representative, at the offices of Representative Counsel or at such other place (including remotely by
facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and
payment for the Additional Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice.
Upon exercise of the Over-allotment Option with respect to all or any portion of the Additional Shares, subject to the terms and
conditions set forth herein, the Company shall become obligated to sell to the Representative, and the Representative shall purchase,
the number of Additional Shares specified in such notice.
1.2.3
Payment and Delivery. Payment for the Additional Shares shall be made on the Option Closing Date by wire transfer in Federal
(same day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory
to the Representative) representing the Additional Shares (or through the facilities of DTC) for the account of the Representative.
The Additional Shares shall be registered in such name or names and in such authorized denominations as the Representative may
request in writing at least one (1) full Business Day prior to the Option Closing Date. The Company shall not be obligated to
sell or deliver the Additional Shares except upon tender of payment by the Representative for applicable Additional Shares. The
Option Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date
are simultaneous with the Closing Date, the term “Closing Date” shall refer to the time and date of delivery
of the Firm Shares and Additional Shares.
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. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (File No. 333-230740), including any related prospectus or prospectuses, for the registration
of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), which registration statement
was prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and
regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and contains and
will contain all material statements that are required to be stated therein in accordance with the Securities Act and the Securities
Act Regulations. Except as the context may otherwise require, such registration statement on file with the Commission at any given
time, including any amendments thereto to such time, exhibits and schedules thereto at such time, documents filed as a part thereof
or incorporated pursuant to Item 12 of Form S-3 under the Securities Act at such time and the documents and information otherwise
deemed to be a part thereof or included therein pursuant to Rule 430B of the Securities Act Regulations (the “Rule 430B
Information”) or otherwise pursuant to the Securities Act Regulations at such time, is referred to herein as the “Registration
Statement.” The Registration Statement at the time it originally became effective is referred to herein as the “Initial
Registration Statement.” If the Company files any registration statement pursuant to Rule 462(b) of the Securities Act
Regulations, then after such filing, the term “Registration Statement” shall include such registration statement
filed pursuant to Rule 462(b). The Registration Statement was declared effective by the Commission on May 8, 2019.
The
prospectus in the form in which it was filed with the Commission in connection with the Initial Registration Statement is herein
called the “Base Prospectus.” Each preliminary prospectus supplement to the Base Prospectus (including the
Base Prospectus as so supplemented) that described the Securities and the Offering and omitted the Rule 430B Information and that
was used prior to the filing of the final prospectus supplement referred to in the following paragraph is herein called a “Preliminary
Prospectus.”
Promptly
after the execution and delivery of this Agreement, the Company will prepare and file with the Commission a final prospectus supplement
to the Base Prospectus relating to the Securities and the Offering in accordance with the provisions of Rule 430B and Rule 424(b)
of the Securities Act Regulations. Such final prospectus supplement (including the Base Prospectus as so supplemented), in the
form filed with the Commission pursuant to Rule 424(b) under the Securities Act is herein called the “Prospectus.”
Any reference herein to the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such
prospectus.
“Applicable
Time” means 10:00 p.m., Eastern time, on the date of this Agreement.
“Disclosure
Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Preliminary
Prospectus dated June 5, 2019 and the information included on Schedule 2-A hereto, all considered together.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined
in Rule 405 of the Securities Act Regulations) relating to the Securities that is (i) required to be filed with the Commission
by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether
or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i)
because it contains a description of the Securities or of the Offering that does not reflect the final terms, in each case in
the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution
to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona
Fide Electronic Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free
Writing Prospectus.
2.2
Pursuant to the Exchange Act. The Common Stock is registered pursuant to Section 12(b) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). The Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the Exchange Act, nor has the Company received any notification that
the Commission is contemplating terminating either such registration.
2.3
Stock Exchange Listing. The Common Stock is listed on the NYSE American LLC (the “NYSE American”), and
the Company has taken no action designed to, or likely to have the effect of delisting the Common Stock from the NYSE American,
nor has the Company received any notification that the NYSE American is contemplating terminating such listing, except as described
in the Registration Statement, the Disclosure Package and the Prospectus.
2.4
No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued
any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has
instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company
has complied with each request (if any) from the Commission for additional information.
2.5
Disclosures in Registration Statement.
2.5.1
Compliance with Securities Act and 10b-5 Representation.
(i)
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective (including each deemed
effective date with respect to the Underwriters pursuant to Rule 430B or otherwise under the Securities Act) complied and will
comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations. The Company was
at the time of the filing of the Registration Statement eligible to use Form S-3. The Company is currently eligible to use Form
S-3 under the Securities Act and it meets the transaction requirements with respect to the aggregate market value of Securities
being sold pursuant to this Offering and during the prior twelve (12) calendar months as set forth in General Instruction I.B.6
of Form S-3. Each Preliminary Prospectus and the Prospectus, at the time each was or will be filed with the Commission, complied
and will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each
Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be
identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii)
Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing
Date or at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted,
omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made not misleading.
(iii)
The Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not
and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing
Prospectus hereto does not conflict with the information contained in the Registration Statement, the Preliminary Prospectus or
the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Preliminary
Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance
upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative
expressly for use in the Registration Statement, the Disclosure Package or the Prospectus or any amendment thereof or supplement
thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of
the following disclosure contained in the “Underwriting” section of the Prospectus: (a) the fourth, fifth and sixth
paragraphs, (b) the information set forth under the sub-captions “Discretionary Accounts,” “Electronic Offer,
Sale and Distribution of Shares”, “Other Relationships”, “Stabilization,” and “Passive Market
Making” and (c) the table showing the number of Securities to be purchased by each Underwriter (the “Underwriters’
Information”); and
(iv)
Neither the Prospectus nor any amendment or supplement thereto, 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.
2.5.2
Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Disclosure Package
and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements
or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement,
the Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have
not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company or
any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Disclosure
Package and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively, the
“Subsidiaries”) is a party or by which it is or may be bound or affected and (i) that is referred to in the
Registration Statement, the Disclosure Package and the Prospectus, or (ii) is material to the business of the Company or any Subsidiary,
has been duly authorized and validly executed by the Company or any Subsidiary, is in full force and effect in all material respects
and is enforceable against the Company or any Subsidiary, 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 or any Subsidiary, and neither
the Company, any Subsidiary nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s
knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder.
To the best of the Company’s knowledge, performance by the Company or any Subsidiary of the material provisions of such
agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental or regulatory agency, body or court, domestic or foreign, having jurisdiction over the Company, any
Subsidiary or any of their respective assets or businesses (each, a “Governmental Entity”), including, without
limitation, those relating to environmental laws and regulations.
2.5.3
Prior Securities Transactions. Since January 1, 2019, no securities of the Company have been sold by the Company or by
or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control with the Company,
except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus.
2.5.4
Regulations. The disclosures in the Registration Statement, the Disclosure Package and the Prospectus concerning the effects
of federal, state, local and all foreign laws, rules and regulations relating to the respective businesses of the Company and
its Subsidiaries as currently conducted or contemplated are correct and complete in all material respects and, to the Company’s
knowledge, no other such laws, rules or regulations are required to be disclosed in the Registration Statement, the Disclosure
Package and the Prospectus which are not so disclosed.
2.5.5
No Other Distribution of Offering Materials. The Company has not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than any Preliminary Prospectus, the Disclosure Package, the Prospectus
and other materials, if any, permitted under the Securities Act and consistent with Section 3.2 below.
2.6
Changes After Dates in Registration Statement.
2.6.1
No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement,
the Disclosure Package and the Prospectus, except as otherwise specifically stated or incorporated by reference therein: (i) there
has been no material adverse change in the financial position or results of operations of the Company or any Subsidiary, nor any
change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material
adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of
the Company or any Subsidiary (a “Material Adverse Change”); (ii) there have been no material transactions
entered into by the Company or any Subsidiary, 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.
2.6.2
Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration
Statement, the Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed
in the Registration Statement, the Disclosure Package and the Prospectus, the Company has not: (i) issued any securities, other
than securities issued pursuant to the Company’s existing equity incentive or stock option plans or shares of Common Stock
issuable upon the exercise of then outstanding options, warrants and convertible 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.
2.7
Disclosures in Commission Filings. Since January 1, 2019, (i) none of the Company’s filings with the Commission contained
any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and (ii) the Company has made all filings with the
Commission required under the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the “Exchange
Act Regulations”).
2.8
Independent Accountants. To the knowledge of the Company, Freed Maxick CPAs, P.C. (the “Auditor”), whose
report is filed with the Commission and incorporated in the Registration Statement, the Disclosure Package and the Prospectus,
is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the
Public Company Accounting Oversight Board. The Auditor has not, during the periods covered by the financial statements included
in the Registration Statement, the Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such
term is used in Section 10A(g) of the Exchange Act.
2.9
Financial Statements, etc. The financial statements, including the notes thereto and supporting schedules included or incorporated
by reference in the Registration Statement, the Disclosure Package and the Prospectus, fairly present the financial position and
the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have
been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), consistently applied
throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments
that are not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules
included or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus present fairly
the information required to be stated therein. Except as included or incorporated by reference therein, no historical or pro forma
financial statements are required to be included or incorporated by reference in the Registration Statement, the 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 or incorporated by reference in the Registration Statement, the Disclosure
Package and the Prospectus have been properly compiled and prepared in accordance with the applicable requirements of the Securities
Act and the Securities Act Regulations and present fairly the information shown therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred
to therein. All disclosures contained or incorporated by reference in the Registration Statement, the Disclosure Package or the
Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission),
if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable.
Each of the Registration Statement, the Disclosure Package and the Prospectus discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities
or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or
expenses. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, (a) neither the Company
nor any of its Subsidiaries, including each entity disclosed or described in the Registration Statement, the Disclosure Package
and the Prospectus as being a Subsidiary of the Company, 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) neither the Company nor any of its
Subsidiaries has declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (c) there
has not been any change in the capital stock of the Company or any of its Subsidiaries, (d) other than in the ordinary course
of business and consistent with the Company’s prior policies, the Company has not made any grants under any stock compensation
plan, and (e) there has not been any material adverse change in the long-term or short-term debt of the Company or any of its
Subsidiaries.
2.10
Authorized Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Disclosure
Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Disclosure Package and the Prospectus, the Company will have on the Closing Date the
adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Disclosure
Package and the Prospectus, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will be no stock
options, warrants, or other rights to purchase or otherwise acquire any authorized but unissued shares of Common Stock of the
Company or equity securities of any Subsidiary or any security convertible or exercisable into shares of Common Stock of the Company
or equity securities of any Subsidiary, or any contracts or commitments to issue or sell shares of Common Stock of the Company
or equity securities of any Subsidiary or any such options, warrants, rights or convertible securities.
2.11
Valid Issuance of Securities, etc.
2.11.1
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; except as set forth in the
Registration Statement, the Disclosure Package and the Prospectus, the holders thereof have no contractual rights of rescission
or the ability to force the Company to repurchase such securities with respect thereto, and are not subject to personal liability
by reason of being such holders; and none of such securities were issued in violation of the preemptive rights, rights of first
refusal or rights of participation of any holders of any security of the Company or similar contractual rights granted by the
Company. The authorized shares of Common Stock conform in all material respects to all statements relating thereto contained in
the Registration Statement, the Disclosure Package and the Prospectus. The offers and sales of the outstanding shares of Common
Stock, options, warrants and other rights to purchase or exchange such securities for shares of the 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 of Common Stock, exempt from such registration
requirements. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the
options or other rights granted thereunder, as described in the Registration Statement, Disclosure Package and the Prospectus,
accurately and fairly present, in all material respects, the information required to be shown with respect to such plans, arrangements,
options and rights.
2.11.2
Securities Sold Pursuant to this Agreement. The Securities have been duly authorized for issuance and sale and, when issued
and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders; the Securities are not and will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken
for the authorization, issuance and sale of the Securities has been duly and validly taken. The Securities conform in all material
respects to all statements with respect thereto contained in the Registration Statement, the Disclosure Package and the Prospectus.
2.12
Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Disclosure Package and the
Prospectus, no holders of any securities of the Company or any options, warrants, rights or other securities exercisable for or
convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities
of the Company under the Securities Act or to include any such securities in the Registration Statement or any other registration
statement to be filed by the Company.
2.13
Validity and Binding Effect of Agreements. The execution, delivery and performance of this Agreement has been duly and
validly authorized by the Company, and this Agreement, 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.
2.14
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 contemplated and the compliance by the Company with the terms hereof
and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a material breach
of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the creation, modification,
termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument to which
the Company or any of its Subsidiaries is a party or as to which any property of the Company or any of its Subsidiaries is a party;
(ii) result in any violation of the provisions of the Company’s Certificate of Incorporation (as the same have been amended
or restated from time to time, the “Charter”), the by-laws of the Company, the certificate of incorporation
of any Subsidiary or the bylaws of any Subsidiary (as applicable); or (iii) violate any existing applicable law, rule, regulation,
judgment, order or decree of any Governmental Entity as of the date hereof, except in the cases of clauses (i) and (iii) for such
breaches, conflicts or violations which would not reasonably be expected to have a Material Adverse Change.
2.15
No Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition
of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries may be bound or to which any of the properties
or assets of the Company or any of its Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is (i) in violation
of any term or provision of its Charter or by-laws, or (ii) in violation of any franchise, license, permit, applicable law, rule,
regulation, judgment or decree of any Governmental Entity, except in the cases of clause (ii) for such violations which would
not reasonably be expected to result in a Material Adverse Change.
2.16
Corporate Power; Licenses; Consents.
2.16.1
Conduct of Business. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, each
of the Company and its Subsidiaries has all requisite corporate power and authority, and has all necessary consents, authorizations,
approvals, orders, licenses, certificates, qualifications, registrations and permits (collectively, the “Authorizations”)
of and from all Governmental Entities that it needs as of the date hereof to conduct its respective business as described in the
Registration Statement, the Disclosure Package and the Prospectus.
2.16.2
Transactions Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to
carry out the provisions and conditions hereof, and all Authorizations required in connection therewith have been obtained. Except
for the filing of an Additional Listing Application with the NYSE American with respect to the sale of the Securities, no Authorization
of, and no filing with, any Governmental Entity is required for the valid issuance, sale and delivery of the Securities and the
consummation of the transactions and agreements contemplated by this Agreement and as contemplated by the Registration Statement,
the Disclosure Package and the Prospectus, except with respect to applicable federal and state securities laws and the rules and
regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.17
D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors, officers and beneficial holders of 5% or more of the Company’s Common
Stock immediately prior to the Offering (the “Insiders”) as supplemented by all information concerning the
Company’s directors, officers and principal shareholders as described in the Registration Statement, the Disclosure Package
and the Prospectus, as well as in the Lock-Up Agreements (as defined in Section 2.27 below), provided to the Underwriters is true
and correct in all material respects and the Company has not become aware of any information which would cause the information
disclosed in the Questionnaires to become inaccurate and incorrect in any material respect.
2.18
Litigation; Governmental Proceedings. There is no material action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company,
any of its Subsidiaries or, to the Company’s knowledge, any executive officer or director which has not been disclosed in
the Registration Statement, the Disclosure Package and the Prospectus which is required to be disclosed.
2.19
Good Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under
the laws of its jurisdiction of incorporation, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to
qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.20
Insurance. The Company and each of its Subsidiaries carries or is entitled to the benefits of insurance (including, without
limitation, as to directors and officers insurance coverage), with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe
that it or any of its Subsidiaries 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.
2.21
Transactions Affecting Disclosure to FINRA.
2.21.1
Finder’s Fees. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there
are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or
origination fee by the Company or any Insider with respect to the sale of the Securities hereunder or any other arrangements,
agreements or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the
Underwriters’ compensation, as determined by FINRA.
2.21.2
Payments Within Six (6) Months. Except as described in the Registration Statement, the 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 six (6) months prior to the initial filing of the Registration
Statement, other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.21.3
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.
2.21.4
FINRA Affiliation. There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, any beneficial
owner of 5% or more of any class of the Company’s securities or (iii) to the Company’s knowledge, any 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).
2.21.5
Information. All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically
for use by Representative Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is
true, correct and complete in all material respects.
2.22
Foreign Corrupt Practices Act. Neither the Company, nor any of its Subsidiaries, nor, to the Company’s knowledge,
any director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries nor, to the Company’s knowledge,
any other person acting on behalf of the Company or any of 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 its Subsidiaries (or assist it in connection
with any actual or proposed transaction) that (i) might subject the Company or any of its Subsidiaries to any material damage
or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material
Adverse Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of
the Company or any of its Subsidiaries. The Company and each of its Subsidiaries 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.
2.23
Compliance with OFAC. Neither the Company, nor any of its Subsidiaries nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any of its Subsidiaries nor, to the Company’s knowledge, any other
person acting on behalf of the Company or any of its Subsidiaries, is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. 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.
2.24
Money Laundering Laws. The operations of the Company and each of its Subsidiaries are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any
of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
2.25
Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in either the Registration Statement, Disclosure Package or the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good faith.
2.26
Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you
or to Representative Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2.27
Lock-Up Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors
and, to the Company’s knowledge, holders of 5% or more of the Company’s Common Stock (collectively, the “Lock-Up
Parties”). The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement,
in the form attached hereto as Exhibit A (the “Lock-Up Agreement”), prior to the execution of
this Agreement.
2.28
Subsidiaries. All direct and indirect 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 effect on the assets, business or operations of the Company taken as a whole. The Company’s ownership
and control of each Subsidiary is as described in the Registration Statement, the Disclosure Package and the Prospectus. No Subsidiary
of the Company is prohibited or restricted, directly or indirectly, from paying any dividends to the Company, from making any
other distributions 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, except as set forth or contemplated in the Registration Statement, the Disclosure Package and the Prospectus.
As of the date of this Agreement, the Company’s sole Subsidiaries are DSS Administrative Group, Inc., a New York corporation,
Plastic Printing Professionals, Inc., a New York corporation, Secuprint Inc., a New York corporation, Premier Packaging Corporation,
a New York corporation, DSS Digital Inc., a New York corporation, DSS Technology Management, Inc., a Delaware corporation, DSS
International Inc., a Nevada corporation, DSS Asia Limited a Hong Kong company and DSS Cyber Security Pte Ltd., a Singapore company.
2.29
Related Party Transactions.
2.29.1
Business Relationships. 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 Disclosure Package and the Prospectus that have not been
described as required.
2.29.2
No Relationships with Customers and Suppliers. No relationship, direct or indirect, exists between or among the Company
on the one hand, and the directors, officers, 5% or greater stockholders, customers or suppliers of the Company or any of the
Company’s affiliates on the other hand, which is required to be described in the Disclosure Package and the Prospectus or
a document incorporated by reference therein and which is not so described.
2.29.3
No Unconsolidated Entities. 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) and any unconsolidated entity, including, but
not limited to, any structure finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s liquidity or the availability of or requirements for its capital resources required to be described
in the Disclosure Package and the Prospectus or a document incorporated by reference therein which have not been described as
required.
2.29.4
No Loans or Advances to Affiliates. There are no outstanding loans, advances (except normal advances for business expenses
in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers
or directors of the Company or any of their respective family members, except as disclosed in the Registration Statement, the
Disclosure Package and the Prospectus.
2.30
Board of Directors. The qualifications of the persons serving as members of the Company’s Board of Directors 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 NYSE American. 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 NYSE American. In
addition, 50% of the persons serving on the Board of Directors qualify as “independent,” as defined under the listing
rules of the NYSE American.
2.31
Sarbanes-Oxley Compliance.
2.31.1
Disclosure Controls. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the
Company has developed and currently maintains disclosure controls and procedures that comply with Rule 13a-15 or 15d-15 under
the Exchange Act Regulations, and such controls and procedures are effective to the extent or except as otherwise disclosed in
the Registration Statement, the Disclosure Package and the Prospectus 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.
2.31.2
Compliance. The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the
provisions of the Sarbanes-Oxley Act applicable to it, and has implemented or will implement such programs and taken reasonable
steps to ensure the Company’s future compliance (not later than the relevant statutory and regulatory deadlines therefor)
with all of the material provisions of the Sarbanes-Oxley Act.
2.32
Accounting Controls. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the
Company and each of its Subsidiaries 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, their respective principal executive and principal
financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited
to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in
the Registration Statement, the Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in
its internal controls. The 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 controls over financial reporting.
2.33
No Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Disclosure Package and the Prospectus, will not be, required to register
as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.34
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. The Company is not aware that any key employee or significant group of employees of the Company or
any Subsidiary plans to terminate employment with the Company or such Subsidiary.
2.35
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 software, databases, know-how, internet domain names, other unpatented and/or un-patentable
proprietary confidential information systems, processes or procedures and similar rights (“Intellectual Property Rights”)
necessary for the conduct of the business of the Company or such Subsidiary as currently carried on and as described in the Registration
Statement, the Disclosure Package and the Prospectus. The Intellectual Property licenses described in the Registration Statement,
Disclosure Package and the Prospectus are validly executed by, binding upon and enforceable against the Company in accordance
with their respective terms. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary
for the conduct of their respective businesses 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 Subsidiary has received any notice alleging any such infringement, fee or conflict with
asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Change or as otherwise as disclosed in the Registration Statement, the Disclosure Package and
the Prospectus (A) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others
challenging the rights of the Company or any of its Subsidiaries 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 2.35, reasonably be expected to result in a Material Adverse Change; (B) the Intellectual
Property Rights owned by the Company or any of its Subsidiaries and, to the knowledge of the Company, the Intellectual Property
Rights licensed to the Company or any of its Subsidiaries 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 2.35, reasonably be expected to result in a Material Adverse Change; (C) there is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company or any of its Subsidiaries
infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, neither
the Company nor any of its Subsidiaries has received any written notice of such claim and the Company is unaware of any other
facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other
claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; and (D) to the Company’s knowledge,
no employee of the Company or any of its Subsidiaries 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 any of its Subsidiaries, or actions undertaken by the employee
while employed with the Company or any of its Subsidiaries and could reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Change. To the Company’s knowledge, all material technical information developed by and
belonging to the Company or any of its Subsidiaries which has not been patented has been kept confidential. Neither the Company
nor any of its Subsidiaries is a party to or bound by any options, licenses or agreements with respect to the Intellectual Property
Rights of any other person or entity that are required to be set forth in the Registration Statement, the Disclosure Package and
the Prospectus and are not described therein. The Registration Statement, the Disclosure Package and the Prospectus contain in
all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed
by the Company or any of its Subsidiaries has been obtained or is being used by the Company or any of its Subsidiaries in violation
of any contractual obligation binding on the Company or any of its Subsidiaries or, to the Company’s knowledge, any of its
officers, directors or employees, or otherwise in violation of the rights of any persons.
2.36
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. 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. 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” mean all federal, state, local, foreign and other net income, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges
of any kind 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
2.37
Compliance with Environmental Laws. Except as described in the Registration Statement, the Disclosure Package and the Prospectus,
(i) neither the Company nor any of its Subsidiaries is in material violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health,
the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials (collectively, “Environmental Laws ), (ii) the Company and each of its Subsidiaries has all
material permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their
requirements, (iii) there are no pending or, to the Company’s knowledge, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating
to any Environmental Law against the Company or any of its Subsidiaries and (iv) to the Company’s knowledge, there are no
events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its Subsidiaries
relating to Hazardous Materials or any Environmental Laws.
2.38
ERISA Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material
respects with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”) of which the Company is a member. No “reportable event”
(as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or
maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have
any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates
has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification. The execution of this Agreement, or consummation of the Offering does
not constitute a triggering event under any employee benefit plan or any other employment contract, whether or not legally enforceable,
which (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (of severance
pay or otherwise), acceleration, increase in vesting, or increase in benefits to any current or former participant, employee or
director of the Company other than an event that is not material to the financial condition or business of the Company.
2.39
Compliance with Laws. The Company and each of its Subsidiaries: (A) is and at all times has been in compliance with all
statutes, rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution,
marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed
by the Company (“Applicable Laws”), except as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Change; (B) possesses all material Authorizations and such Authorizations are valid and in full force
and effect and are not in material violation of any term of any such Authorizations; (C) has not received notice of any claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third
party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge
that any such governmental authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation
or proceeding; (D) has not received notice that any Governmental Entity has taken, is taking or intends to take action to limit,
suspend, modify or revoke any Authorizations and has no knowledge that any such governmental authority is considering such action;
and (E) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents,
forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct on the date
filed (or were corrected or supplemented by a subsequent submission).
2.40
Smaller Reporting Company. As of the effective date, or deemed effective date, of the Registration Statement, the Company
was a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act Regulations.
2.41
Industry Data. The statistical and market-related data included in each of the Registration Statement, the Disclosure Package
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and
accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.42
Margin Securities. The Company does not own any “margin securities” as that term is defined in Regulation U
of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds
of 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 shares of Common Stock to be considered a “purpose credit” within the meanings
of Regulation T, U or X of the Federal Reserve Board.
2.43
Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would cause the Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require
the registration of any such securities under the Securities Act.
2.44
Title. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, the Company and each
of its Subsidiaries has good and marketable title in fee simple to, or has valid rights to lease or otherwise use, all items of
real or personal property that are material to its respective business, free and clear of all liens, encumbrances, security interests,
claims and defects that do not, singularly or in the aggregate, materially affect the business of the Company or its Subsidiaries
and do not interfere with the use 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 each of its Subsidiaries, and under which the Company or any of its Subsidiaries holds
properties described in the Registration Statement, the Disclosure Package and the Prospectus, are, to the Company’s knowledge
in full force and effect, and neither the Company nor any of its Subsidiaries has received any notice of any material claim of
any sort that have been asserted by anyone adverse to the rights of the Company or such Subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiaries to the continued possession
of the leased or subleased premises under any such lease or sublease, which would result in a Material Adverse Change.
2.45
Confidentiality and Non-Competitions. To the Company’s knowledge, no director, officer, key employee or consultant
of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with
any employer or prior employer that could materially affect his ability to be and act in his respective capacity of the Company
or be expected to result in a Material Adverse Change.
3.
Covenants of the Company. The Company covenants and agrees as follows:
3.1
Amendments to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or
supplement to the Registration Statement, any Preliminary Prospectus, Disclosure Package or Prospectus proposed to be filed and
shall not file any such document to which the Representative shall reasonably object in writing.
3.2
Federal Securities Laws.
3.2.1
Compliance. The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 424(b) and Rule 430B of the
Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus, the Disclosure Package or
the Prospectus shall have been filed and when any post-effective amendment to the Registration Statement shall become effective;
(ii) of the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to any Preliminary Prospectus, the Disclosure Package or the Prospectus or for additional
information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus, the Disclosure
Package or the Prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d)
or 8(e) of the Securities Act concerning the Registration Statement; and (v) if the Company becomes the subject of a proceeding
under Section 8A of the Securities Act in connection with the Offering of the Securities. The Company shall effect all filings
required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b)
(without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not,
it will promptly file such prospectus. The Company shall use its 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 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 Securities as contemplated in this
Agreement and in the Registration Statement, the Disclosure Package and the Prospectus. If at any time when a prospectus relating
to the Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in connection with sales of the Securities, 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 Disclosure Package or the Prospectus in order that the Disclosure Package or the Prospectus, as the
case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or
(iii) amend the Registration Statement or amend or supplement the Disclosure Package or the Prospectus, as the case may be, in
order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give
the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement, the Disclosure Package or the Prospectus comply with such requirements and,
a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies of any such amendment
or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use
any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably object. The Company
will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request.
The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the Exchange Act Regulations
within 48 hours prior to the Applicable Time; the Company will give the Representative notice of its intention to make any such
filing from the Applicable Time to the Closing Date and will furnish the Representative with copies of any such documents a reasonable
amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative
or counsel for the Underwriters shall reasonably object.
3.2.3
Exchange Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its
reasonable best efforts to maintain the registration of the Common Stock under the Exchange Act, provided that such provision
shall not prevent a sale, merger or similar transaction involving the Company. The Company shall not, for a period of three (3)
years after the date of this Agreement, deregister the Common Stock under the Exchange Act without the prior written consent of
the Representative, which consent shall not be unreasonably withheld.
3.2.4
Free Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative,
it shall not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission
or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General
Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule
433(d)(8)(i) that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat
each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto,
including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of
an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify
the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission.
3.3
Delivery to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or
make available to the Representative and counsel for the Representative, if requested, without charge, signed copies of the Registration
Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents
and certificates of experts, and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement
as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration
Statement 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, Disclosure Package and the 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 Securities
is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations, would be) required to be delivered under
the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request.
The Preliminary Prospectus, the Disclosure Package, 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
Listing. The Company shall use its reasonable best efforts to maintain the listing of the Common Stock (including the Securities)
on the NYSE American for at least three years from the date of this Agreement; provided that such provision shall not prevent
a sale, merger or similar transaction involving the Company.
3.6
Payment of Expenses. 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 Securities
to be issued and sold in the Offering with the Commission; (b) all Public Offering System filing fees associated with the review
of the Offering by FINRA; (c) all fees and expenses relating to the listing of the Securities on the NYSE American; (d) all fees,
expenses and disbursements relating to the registration or qualification of the Securities under the “blue sky” securities
laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all
filing and registration fees, and the reasonable fees and disbursements of “blue sky” counsel which will be Representative
Counsel); (e) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities
under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (f) the costs of all mailing
and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and,
if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power
of Attorney), Registration Statements, Preliminary Prospectuses, Disclosure Packages and Prospectuses and all amendments, supplements
and exhibits thereto and as many Preliminary Prospectuses and Prospectuses as the Representative may reasonably deem necessary;
(g) the costs of preparing, printing and delivering certificates representing the Securities; (h) fees and expenses of the Company’s
transfer agent; (j) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the
Underwriters; (k) the fees and expenses of the Company’s accountants; (l) the fees and expenses of the Company’s legal
counsel and other agents and representatives; and (m) up to $75,000 for the actual fees and expenses incurred by the Representative
in connection with the Offering including the legal fees of the Representative Counsel in the event that the Offering is consummated
or $25,000 if the Offering is not consummated. The $15,000 advance previously paid to the Representative (the “Advance”)
shall, in each case, be applied towards out-of-pocket accountable expense set forth in subsection (m) herein and any portion of
the Advance shall be returned back to the Company to the extent not actually incurred. 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.
3.7
Non-Accountable Expense Allowance The Company further agrees that, in addition to the expenses payable pursuant to Section
3.6, on the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering on the Closing
Date contemplated herein, a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by the
Company from the sale of the Firm Shares, provided, however, that in the event that the Offering is terminated, the Company agrees
to reimburse the Underwriters pursuant to Section 8.3 hereof
3.8
Application of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent
with the application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Disclosure
Package and the Prospectus.
3.9
Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the
consent of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted
or that might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
3.10
Internal Controls. The Company shall maintain and shall cause each of its Subsidiaries to maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements
in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any differences.
3.11
Accountants. As of the date of this Agreement, the Company shall retain an independent registered public accounting firm,
as required by the Securities Act and the Regulations and the Public Company Accounting Oversight Board, reasonably acceptable
to the Representative. The Representative acknowledges that the Auditor is acceptable to the Representative.
3.12
FINRA. For a period of 90 days from the later of the Closing Date or the Option Closing Date (if any), the Company shall
advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or
director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company’s securities or (iii) any beneficial
owner of the Company’s unregistered equity securities which were acquired during the 180 days immediately preceding the
filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the Offering
(as determined in accordance with the rules and regulations of FINRA).
3.13
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.
3.14
Company Lock-Up Agreement. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, during the period of ninety (90) days from the date of this Agreement (the “Lock-Up
Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company; or (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.
The
restrictions contained in this Section 3.14 shall not apply to (i) the Securities to be sold hereunder, (ii) the issuance by the
Company of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on
the date hereof, which is disclosed in the Registration Statement, Disclosure Package and Prospectus and (iii) the issuance by
the Company of stock options under any equity compensation plan of the Company.
3.15
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 2.27 hereof for an officer, director or shareholder of the Company, the
Representative shall provide the Company with notice of the impending release or waiver at least three (3) Business Days before
the effective date of the release or waiver, the Company agrees if required by applicable law 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.
3.16
Blue Sky Qualifications. The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to
qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete
the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so
subject.
3.17
Reporting Requirements. The Company, during the period when a prospectus relating to the Securities is (or, but for the
exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required
to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange
Act Regulations.
3.18
Press Releases. Prior to the Closing Date and any Option Closing Date, the Company shall not issue any press release or
other communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial
or otherwise, or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the Company and of which the Representative is notified), without
the prior written consent of the Representative, which consent shall not be unreasonably withheld, unless in the judgment of the
Company and its counsel, and after notification to the Representative, such press release or communication is required by law.
3.19
Sarbanes-Oxley. The Company shall at all times comply with all applicable provisions of the Sarbanes-Oxley Act in effect
from time to time.
4.
Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Securities,
as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of
the date hereof and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of
officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder;
and (iv) the following conditions:
4.1
Regulatory Matters.
4.1.1
Absence of Certain Commission Actions; Required Filings. At each of the Closing Date and any Option Closing Date, no stop
order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto shall have been issued
under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus shall have
been issued and no proceedings for any of those purposes shall have been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional
information. A prospectus containing the Rule 430B Information shall have been filed with the Commission in the manner and within
the time frame required by Rule 424(b) under the Securities Act Regulations (without reliance on Rule 424(b)(8)) or a post-effective
amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with
the requirements of Rule 430B under the Securities Act Regulations.
4.1.2
FINRA Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as
to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3
NYSE American Stock Market Clearance. On or before the Closing Date, the Firm Shares, and on or before the Option Closing
Date, the Additional Shares, shall have been approved for listing on the NYSE American.
4.2
Company Counsel Matters.
4.2.1
Closing Date Opinion of Counsel to the Company. On the Closing Date, the Representative shall have received the favorable
opinion of Sichenzia Ross Ference LLP, and a written statement providing certain “10b-5” negative assurances, dated
the Closing Date and addressed to the Representative, substantially in the form attached hereto as Exhibit C.
4.2.2
Option Closing Date Opinion of Counsel. On the Option Closing Date, if any, the Representative shall have received the
favorable opinion of counsel listed in Section 4.2.1, dated the Option Closing Date, addressed to the Representative and in form
and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by
such counsel in its opinion delivered on the Closing Date.
4.2.3
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 Counsel if requested.
The opinion referred to in Sections 4.2.1 above and any related Option Closing Date opinion shall include a statement to the effect
that it may be relied upon by Representative Counsel in its written statement providing certain “10b-5” negative assurances
delivered to the Underwriters.
4.3
Comfort Letters.
4.3.1
Cold Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter containing statements
and information of the type customarily included in accountants’ comfort letters with respect to the financial statements
and certain financial information contained in the Registration Statement, the Disclosure Package and the Prospectus, addressed
to the Representative and in form and substance satisfactory in all respects to you and to Representative Counsel from the Auditor,
dated such date.
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 one (1) business day prior to the Closing Date or the Option Closing Date, as applicable.
4.4
Officers’ Certificates.
4.4.1
Officers’ Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date
and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer and its Chief Financial
Officer or Chief Operating Officer stating that (i) such officers have carefully examined the Registration Statement, the Disclosure
Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment
thereto, as of the Applicable Time and as of the date of this Agreement and as of the Closing Date (or any Option Closing Date
if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Disclosure Package,
as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date),
any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other
than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the
Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the date
of this Agreement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement,
the Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing
Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company
in this Agreement are true and correct in all material respects 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 or incorporated by reference in the Disclosure Package, any material adverse change in the financial position
or results of operations of the Company, or any change or development that, singularly or in the aggregate, would involve a material
adverse change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company, except as set forth in the Prospectus.
4.4.2
Secretary’s Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall
have received a certificate of the Company signed by the Secretary or the Assistant Secretary of the Company, dated the Closing
Date or the Option Date, as the case may be, respectively, certifying: (i) that each of the Charter and 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
the Pricing Committee of the Board of Directors relating to the Offering are in full force and effect and have not been modified;
(iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv)
as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5
No Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have
been no material adverse change or development involving a prospective material adverse change in the condition or prospects or
the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth
in the Registration Statement and no material change in the capital stock or debt of the Company, the Disclosure Package and the
Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company
or, to the Company’s knowledge, any Insider before or by any court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects
or financial condition or income of the Company, except as set forth in the Registration Statement, the Disclosure Package and
the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been
initiated or threatened by the Commission; (iv) no action shall have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any Governmental Entity which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company; (v)
no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have
been issued which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially materially
and adversely affect the business or operations of the Company and (vi) the Registration Statement, the Disclosure Package and
the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated
therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to
the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Disclosure
Package, the Prospectus nor any Issuer Free Writing Prospectus nor any amendment or supplement thereto shall contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
4.6
No Material Misstatement or Omission. The Underwriters shall not have discovered and disclosed to the Company on or prior
to the Closing Date and any Option Closing Date that the Registration Statement or any amendment or supplement thereto contains
an untrue statement of a fact which, in the opinion of counsel for the Underwriters, is material or omits to state any fact which,
in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein
not misleading, or that the Registration Statement, Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or
any amendment or supplement thereto contains an untrue statement of fact which, in the opinion of such counsel, is material or
omits to state any fact which, in the opinion of such counsel, is material and is necessary in order to make the statements, in
the light of the circumstances under which they were made, not misleading.
4.7
Corporate Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity
of each of this Agreement, the Securities, the Registration Statement, the Disclosure Package, each Issuer Free Writing Prospectus,
if any, and the Prospectus and all other legal matters relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
4.8
Delivery of 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.
4.9
Good Standing Certificates. On the Closing Date and the Option Closing Date, if any, the Company shall have delivered to
the Representative a certificate of good standing from the State of New York for the Company
4.10
Additional Documents. At the Closing Date and at each Option Closing Date (if any), Representative Counsel shall have been
furnished with such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an
opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment
of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form and substance to the Representative and Representative
Counsel.
5.
Indemnification.
5.1
Indemnification by the Company. The Company shall indemnify and hold harmless each Underwriter, its affiliates and each
of its and their respective directors, officers, members, employees, representatives and agents and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Securities Act of or Section 20 of the Exchange Act (collectively the
“Underwriter Indemnified Parties,” and each a “Underwriter Indemnified Party”) against any
loss, claim, damage, expense or liability whatsoever (or any action, investigation or proceeding in respect thereof), to which
such Underwriter Indemnified Party may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
expense, liability, action, investigation or proceeding arises out of or is based upon (A) any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement, Preliminary Prospectus, Disclosure Package, Issuer Free
Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the Securities
Act Regulations, or the Prospectus, or in any amendment or supplement thereto or document incorporated by reference therein, or
(B) the omission or alleged omission to state in any Registration Statement, Preliminary Prospectus, Disclosure Package, Issuer
Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of
the Securities Act Regulations, or the Prospectus, or in any amendment or supplement thereto or document incorporated by reference
therein, a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse
the Underwriter Indemnified Party promptly upon demand for any legal fees or other expenses reasonably incurred by that Underwriter
Indemnified Party in connection with investigating, or preparing to defend, or defending against, or appearing as a third party
witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation
or proceeding, as such fees and expenses are incurred; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement in, or
omission from any Registration Statement, Preliminary Prospectus, Disclosure Package, Issuer Free Writing Prospectus or the Prospectus,
or any such amendment or supplement thereto, or made in reliance upon and in conformity with written information furnished to
the Company through the Representative by or on behalf of any Underwriter specifically for use therein, which information the
parties hereto agree is limited to the Underwriters’ Information. This indemnity agreement is not exclusive and will be
in addition to any liability, which the Company might otherwise have and shall not limit any rights or remedies which may otherwise
be available at law or in equity to each Underwriter Indemnified Party.
5.2
Indemnification by the Underwriters. Each Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, the Company’s directors, its officers who signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Company
Indemnified Parties” and each a “Company Indemnified Party”) against any loss, claim, damage, expense
or liability whatsoever (or any action, investigation or proceeding in respect thereof), to which such Company Indemnified Party
may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation
or proceeding arises out of or is based upon (i) any untrue statement of a material fact contained in any Registration Statement,
Preliminary Prospectus, Disclosure Package, Issuer Free Writing Prospectus, any “issuer information” filed
or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, or the Prospectus, or in any amendment or supplement
thereto, or (ii) the omission to state in any Registration Statement, Preliminary Prospectus, Disclosure Package, Issuer Free
Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the Securities
Act Regulations, or the Prospectus, or in any amendment or supplement thereto, a material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission
was made in reliance upon and in conformity with written information furnished to the Company through the Representative by or
on behalf of any Underwriter specifically for use therein, which information the parties hereto agree is limited to the Underwriters’
Information and shall reimburse the Company for any legal or other expenses reasonably incurred by such party in connection with
investigating or preparing to defend or defending against or appearing as third party witness in connection with any such loss,
claim, damage, liability, action, investigation or proceeding, as such fees and expenses are incurred. Notwithstanding the provisions
of this Section 5.2, in no event shall any indemnity by an Underwriter under this Section 5.2 exceed the total discount and commission
received by such Underwriter in connection with the Offering.
5.3
Procedure. Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement of that action; provided, however, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have under this Section 5 except to the extent it
has been materially adversely prejudiced by such failure; and, provided, further, that the failure to notify an
indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this
Section 5. If any such action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense of such action with counsel reasonably satisfactory to the indemnified party
(which counsel shall not, except with the written consent of the indemnified party, be counsel to the indemnifying party). After
notice from the indemnifying party to the indemnified party of its election to assume the defense of such action, except as provided
herein, the indemnifying party shall not be liable to the indemnified party under Section 5 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense of such action other than reasonable costs of investigation;
provided, however, that any indemnified party shall have the right to employ separate counsel in any such action and to participate
in the defense of such action but the fees and expenses of such counsel (other than reasonable costs of investigation) shall be
at the expense of such indemnified party unless (i) the employment thereof has been specifically authorized in writing by the
Company in the case of a claim for indemnification under 5.1 or the Representative in the case of a claim for indemnification
under Section 5.2, (ii) such indemnified party shall have been advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the indemnifying party, or (iii) the indemnifying
party has failed to assume the defense of such action and employ counsel reasonably satisfactory to the indemnified party within
a reasonable period of time after notice of the commencement of the action or the indemnifying party does not diligently defend
the action after assumption of the defense, in which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of (or, in the case of a failure to diligently defend the action after assumption of the defense,
to continue to defend) such action on behalf of such indemnified party and the indemnifying party shall be responsible for legal
or other expenses subsequently incurred by such indemnified party in connection with the defense of such action; provided,
however, that the indemnifying party shall not, in connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any time any such indemnified party (in addition to any local
counsel), which firm shall be designated in writing by the Representative if the indemnified party under this Section 5 is an
Underwriter Indemnified Party or by the Company if an indemnified party under this Section 5 is a Company Indemnified Party. Subject
to this Section 5.3, the amount payable by an indemnifying party under Section 5 shall include, but not be limited to, (x) reasonable
legal fees and expenses of counsel to the indemnified party and any other expenses in investigating, or preparing to defend or
defending against, or appearing as a third party witness in respect of, or otherwise incurred in connection with, any action,
investigation, proceeding or claim, and (y) all amounts paid in settlement of any of the foregoing. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of judgment with respect
to any pending or threatened action or any claim whatsoever, in respect of which indemnification or contribution could be sought
under this Section 5 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified party in form and substance reasonably satisfactory
to such indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. Subject to the provisions of
the following sentence, no indemnifying party shall be liable for settlement of any pending or threatened action or any claim
whatsoever that is effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if
settled with its written consent, if its consent has been unreasonably withheld or delayed or if there be a judgment for the plaintiff
in any such matter, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss
or liability by reason of such settlement or judgment. In addition, if at any time an indemnified party shall have requested that
an indemnifying party reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated herein effected without its written consent if (i) such settlement
is entered into more than forty-five (45) days after receipt by such indemnifying party of the request for reimbursement, (ii)
such indemnifying party shall have received notice of the terms of such settlement at least thirty (30) days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
5.4
Contribution. If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an
indemnified party under Section 5.1 or Section 5.2, then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid, payable or otherwise incurred by such indemnified party as a result of such loss, claim,
damage, expense or liability (or any action, investigation or proceeding in respect thereof), as incurred, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company on the one hand and each of the Underwriters
on the other hand from the Offering, or (ii) if the allocation provided by clause (i) of this Section 5.4 is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) of this
Section 5.4 but also the relative fault of the Company on the one hand and the Underwriters on the other with respect to the statements,
omissions, acts or failures to act which resulted in such loss, claim, damage, expense or liability (or any action, investigation
or proceeding in respect thereof) as well as any other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion
as the total proceeds from the Offering purchased under this Agreement (before deducting expenses) received by the Company bear
to the total underwriting discount and commissions received by the Underwriters in connection with the Offering, in each case
as set forth in the table on the cover page of the Prospectus. The relative fault of the Company on the one hand and the Underwriters
on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement, omission, act or failure to act; provided that the parties hereto agree that the
written information furnished to the Company through the Representative by or on behalf of any Underwriter for use in any Preliminary
Prospectus, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriters’
Information. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this
Section 5.4 be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage,
expense, liability, action, investigation or proceeding referred to above in this Section 5.4 shall be deemed to include, for
purposes of this Section 5.4, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating,
preparing to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection
with, any such loss, claim, damage, expense, liability, action, investigation or proceeding. Notwithstanding the provisions of
this Section 5.4, no Underwriter shall be required to contribute any amount in excess of the total discount and commission received
by such Underwriter in connection with the Offering less the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or
failure to act or alleged failure to act. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligation to contribute as provided in this Section 5.4 are several and in proportion to their respective
underwriting obligation, and not joint.
6.
Default by an Underwriter.
6.1
Default Not Exceeding 10% of Firm Shares or Additional Shares. If any Underwriter or Underwriters shall default in its
or their obligations to purchase the Firm Shares or the Additional Shares, if the Over-allotment Option is exercised hereunder,
and if the number of the Firm Shares or Additional Shares with respect to which such default relates does not exceed in the aggregate
10% of the number of Firm Shares or Additional Shares that all Underwriters have agreed to purchase hereunder, then such Firm
Shares or Additional Shares to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to
their respective commitments hereunder.
6.2
Default Exceeding 10% of Firm Shares or Additional Shares. In the event that the default addressed in Section 6.1 relates
to more than 10% of the Firm Shares or Additional Shares, you may in your discretion arrange for yourself or for another party
or parties to purchase such Firm Shares or Additional Shares to which such default relates on the terms contained herein. If,
within one (1) Business Day after such default relating to more than 10% of the Firm Shares or Additional Shares, you do not arrange
for the purchase of such Firm Shares or Additional Shares, then the Company shall be entitled to a further period of one (1) Business
Day within which to procure another party or parties satisfactory to you to purchase said Firm Shares or Additional Shares on
such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Shares or Additional Shares to
which a default relates as provided in this Section 6, this Agreement will automatically be terminated by you or the Company without
liability on the part of the Company (except as provided in Sections 3.10 and 5 hereof) or the several Underwriters (except as
provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Additional Shares, this Agreement
will not terminate as to the Firm Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of
its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.
6.3
Postponement of Closing Date. In the event that the Firm Shares or Additional Shares to which the default relates are to
be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding
five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Disclosure
Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to
the Registration Statement, the Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby
be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted under
this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such Securities.
7.
Right of First Refusal. Following the Closing of the Offering, for a period of nine(9) months from such Closing, the Company
grants the Representative the right of first refusal to act as lead managing underwriter and book runner and/or lead placement
agent for any and all future public or private equity, equity-linked or debt (excluding commercial bank debt) offerings of the
Company or any successor to or any Subsidiary of the Company during such nine (9) month period. The Company shall notify the Representative
of its intention to pursue any such offering, including the material terms thereof, by providing written notice thereof to the
Representative. If the Representative fails to accept in writing any such proposal for such public or private offering within
ten business (10) days after receipt of a written notice in accordance with this Section from the Company then the Representative
will have no claim or right with respect to any such offering contained in any such notice. If, thereafter, such proposal is modified
in any material respect, the Company will adopt the same procedure as with respect to the original proposed public or private
offering and the Representative shall have the right of first refusal with respect to such revised proposal.
8.
Effectiveness of this Agreement and Termination Thereof.
8.1
Effectiveness of the Agreement. This Agreement shall become effective when both the Company and the Representative have
executed the same and delivered counterparts of such signatures to the other party.
8.2
Termination. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date,
(i) if any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange
or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or
any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an
increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or
(v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities
markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage
or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable
to proceed with the delivery of the Firm Shares or Additional Shares; or (vii) if the Company is in material breach of any of
its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become aware after the date
hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general
market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or
delivery of the Securities or to enforce contracts made by the Underwriters for the sale of the Securities.
8.3
Expenses Upon Termination. Notwithstanding anything to the contrary in this Agreement, except in the case of a default
by the Underwriters, pursuant to Section 6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay
to the Representative its actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due
and payable (including the fees and disbursements of Representative Counsel) up to $25,000, less the Advance previously paid to
the Representative, and upon demand the Company shall pay the full amount thereof to the Representative; provided, however, that
such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding
the foregoing, any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred
in compliance with FINRA Rule 5110(f)(2)(C).
8.4
Survival of Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder
or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5
shall remain in full force and effect and shall not be in any way affected by, such election or termination or failure to carry
out the terms of this Agreement or any part hereof.
8.5
Representations, Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Securities.
9.
Miscellaneous.
9.1
Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall
be mailed (registered or certified mail, return receipt requested), personally delivered or sent by facsimile transmission 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:
Aegis
Capital Corp.
810
Seventh Avenue, 18th Floor
New
York, New York 10019
Attn:
Mr. David W. Boral Co-Head of Investment Banking and Mr. Joseph T. Rallo, Co-Head of Investment Banking
Fax
No.:
with
a copy (which shall not constitute notice) to:
Loeb
& Loeb LLP
345
Park Avenue
New
York, New York 10154
Attn:
Mitchell S. Nussbaum, Esq.
Fax
No.: (212) 407-4990
If
to the Company:
Document
Security Systems, Inc.
200
Canal View Boulevard, Suite 300
Rochester,
New York 14623
Attention:
Frank D. Heuszel, Chief Executive Officer
Fax
No:
with
a copy (which shall not constitute notice) to:
Sichenzia
Ross Ference LLP
1185
Avenue of the Americas
37th
Floor
New
York, NY 10036
Attention:
Gregory Sichenzia, Esq.
Fax
No: (212) 930-9725
9.2
Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way
limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
9.3
Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(i)
each Underwriter’s responsibility to the Company is solely contractual in nature, each Underwriter has been retained solely
to act as an underwriter in connection with the Offering and no fiduciary, advisory or agency relationship between the Company
and the Underwriters has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether
the Representative has advised or is advising the Company on other matters;
(ii)
the price of the Securities set forth in this Agreement was established by the Company following discussions and arms-length negotiations
with the Representative, and the Company is capable of evaluating and understanding, and understands and accepts, the terms, risks
and conditions of the transactions contemplated by this Agreement;
(iii)
it has been advised that the Representative and their respective affiliates are engaged in a broad range of transactions which
may involve interests that differ from those of the Company and that the Underwriters have no obligation to disclose such interests
and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and
9.4
Research Analyst Independence. The Company acknowledges that each Underwriter’s research analysts and research departments
are required to be independent from its investment banking division and are subject to certain regulations and internal policies,
and that such Underwriter’s research analysts may hold views and make statements or investment recommendations and/or publish
research reports with respect to the Company and/or the offering that differ from the views of their investment banking division.
The Company acknowledges that each Underwriter is a full service securities firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for its own account or the account of its customers and hold long
or short positions in debt or equity securities of the Company; provided, however, that nothing in this Section 9.4 shall relieve
the Underwriter of any responsibility or liability it may otherwise bear in connection with activities in violation of applicable
securities laws, rules or regulations.
9.5
Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.6
Entire Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection
with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof,
and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.7
Binding Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors
and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.8
Governing Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby
agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought
and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to
be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested,
postage prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service
and shall be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies)
in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.
9.9
Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one
and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto
and delivered to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf
transmission shall constitute valid and sufficient delivery thereof.
9.10
Waiver, etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall
not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any
provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No
waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set
forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and
no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent
breach, non-compliance or non-fulfillment.
[Signature
Page Follows]
If
the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.
| |
Very
truly yours, |
| |
|
| |
DOCUMENT
SECURITY SYSTEMS, INC. |
| |
|
|
| |
By: |
|
| |
Name: |
Frank
D. Heuszel |
| |
Title: |
Chief
Executive Officer |
Confirmed
as of the date first written
above,
on behalf of itself and as
Representative
of the several Underwriters
named
on Schedule 1 hereto:
| AEGIS
CAPITAL CORP. |
|
| |
|
|
| By: |
|
|
| Name: |
David
W. Boral |
|
| Title: |
Co-Head
of Investment Banking |
|
| AEGIS CAPITAL CORP. |
| |
|
|
| |
|
|
| Name: |
Joseph T. Rallo |
|
| Title: |
Co-Head of Investment
Banking |
|
SCHEDULE
1
| Underwriter | |
Total
Number of Firm Shares
to be Purchased | | |
Number
of Additional Shares to
be Purchased if Over-Allotment
Option is Fully Exercised | |
| | |
| | | |
| | |
| Aegis Capital Corp. | |
| 11,200,000 | | |
| 1,680,000 | |
SCHEDULE
2-A
Pricing
Information
Number
of Firm Shares: 11,200,000
Number
of Additional Shares: 1,680,000
Public
Offering Price per Share: $0.50
Underwriting
Discount per Share: $0.04
Proceeds
to Company per Share (before expenses): $0.46
SCHEDULE
2-B
Issuer
General Use Free Writing Prospectuses
SCHEDULE
3
List
of Lock-Up Parties
Frank
Heuszel
Heng
Fai Ambrose Chan
Joseph
Sanders
Pamela
Avallone
Lo
Wah Wai
Daniel
DelGiorno
Brett
L. Scott
Stanley
Grisham
John
Thatch
EXHIBIT
A
Form
of Lock-Up Agreement
__________,
2019
Aegis
Capital Corp.
810
Seventh Avenue, 18 th Floor
New
York, New York 10019
Ladies
and Gentlemen:
The
undersigned understands that Aegis Capital Corp. (the “Representative”) proposes to enter into an Underwriting
Agreement (the “Underwriting Agreement”) with Document Security Systems Inc., a New York corporation (the “Company”),
providing for the public offering (the “Public Offering”) of shares of common stock, par value $0.002 per share,
of the Company (the “Shares”).
To
induce the Representative to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that,
without the prior written consent of the Representative, the undersigned will not, during the period commencing on the date of
the Underwriting Agreement and ending one hundred eighty (180) days after such date (the “Lock-Up Period”),
(1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares
or any securities convertible into or exercisable or exchangeable for Shares, whether now owned or hereafter acquired by the undersigned
or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up
Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect
to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition,
or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing,
and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the
Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the
completion of the Public Offering; provided that no filing under Section 16(a) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), shall be required or shall be voluntarily made in connection with subsequent
sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities as a bona fide
gift, by will or intestacy or to a family member or trust for the benefit of a family member (for purposes of this lock-up agreement,
“family member” means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers
of Lock-Up Securities to a charity or educational institution; or (d) if the undersigned, directly or indirectly, controls a corporation,
partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner
or member of, or owner of similar equity interests in, the undersigned, as the case may be; provided that in the case of
any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value,
(ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this lock-up
agreement and (iii) no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made. The undersigned
also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against
the transfer of the undersigned’s Lock-Up Securities except in compliance with this lock-up agreement.
If
the undersigned is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be
equally applicable to any Shares that the undersigned may purchase in the Public Offering; (ii) the Representative agrees that,
at least three (3) business days before the effective date of any release or waiver of the foregoing restrictions in connection
with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release or waiver; and (iii)
the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major
news service at least two (2) business days before the effective date of the release or waiver. Any release or waiver granted
by the Representative hereunder to any such officer or director shall only be effective two (2) business days after the publication
date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to
permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing to be bound by the
same terms described in this lock-up agreement to the extent and for the duration that such terms remain in effect at the time
of such transfer.
No
provision in this lock-up agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned
of any securities exercisable or exchangeable for or convertible into Shares, as applicable; provided that the undersigned
does not transfer the Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the
entry into or modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of
such a plan in such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period) or a sale of 100% of the
Company’s outstanding Shares.
The
undersigned understands that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation
of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon
the undersigned’s heirs, legal representatives, successors and assigns.
The
undersigned understands that, if the Underwriting Agreement is not executed by June 30, 2019, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery
of the Shares to be sold thereunder, then this lock-up agreement shall be void and of no further force or effect.
Whether
or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will
only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the
Representative.
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Very
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(Name
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(Signature) |
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(Name
of Signatory, in the case of entities - Please Print) |
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(Title
of Signatory, in the case of entities - Please Print) |
EXHIBIT
B
Form
of Press Release
Document
Security Systems Inc.
[Date]
Document
Security Systems, Inc. (the “Company”) announced today that Aegis Capital Corp., acting as representative for
the underwriters in the Company’s recent public offering of the Company’s common stock, is [waiving] [releasing] a
lock-up restriction with respect to _________ shares of the Company’s common stock held by [certain officers or directors]
[an officer or director] of the Company. The [waiver] [release] will take effect on _________, 20___, and the shares may be sold
on or after such date.
This
press release is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or
sale is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from
registration under the Securities Act of 1933, as amended.
EXHIBIT
C
Form
of Opinion of Company Counsel
(i)
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 New York with the requisite corporate power and authority to own or lease, as the case may be, and operate its properties,
and to conduct its business, as described in the Registration Statement, the Disclosure Package and the Prospectus and to enter
into and perform its obligations under the Underwriting Agreement.
(ii)
The authorized and outstanding shares of capital stock of the Company is as set forth in the Prospectus.
(iii)
The Firm/Additional Shares have been duly authorized for issuance and sale to the Underwriters pursuant to the Underwriting Agreement
and, when issued and paid for pursuant to the terms of the Underwriting Agreement, will be validly issued and fully paid and non-assessable;
the holders thereof are not and will not be subject to personal liability solely by reason of being such holders. The issuance
of the Firm/Additional Shares is not and will not be subject to the preemptive or similar rights of any holders of any security
of the Company arising by operation of law or under the Company’s Certificate of Incorporation, as amended (the “Charter”),
bylaws, as amended (the “Bylaws”) or the Material Contracts ( as defined below).
(iv)
The Underwriting Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes the valid
and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally,
(b) as enforceability of any indemnification or contribution provisions may be limited under the Federal and state securities
laws, and (c) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any proceeding therefore may be brought..
(v)
The execution, delivery and performance of the Underwriting Agreement and compliance by the Company with the terms and provisions
thereof and the consummation of the transactions contemplated thereby, and the issuance and sale of the Securities, do not and
will not, whether with or without the giving of notice or the lapse of time or both, (a) violate, conflict with, or result in
a breach of, any of the terms or provisions of, or constitute a default under, or result in the creation or modification of any
lien, security interest, charge or encumbrance upon any of the properties or assets of the Company pursuant to the terms of, any
mortgage, deed of trust, note, indenture, loan, contract, commitment or other agreement or instrument filed or incorporated by
reference as an exhibit to the Registration Statement (collectively, the “Material Contracts”), (b) result in any
violation of the provisions of the Charter, the By-laws or any other governing documents of the Company, or (c) violate any law,
statute or any judgment, order or decree, rule or regulation applicable to the Company of any Governmental Entity.
(vi)
The shares of Common Stock offered pursuant to the Prospectus conform in all material respects to the description thereof contained
in the Registration Statement, the Disclosure Package and the Prospectus. No United States or state statute or regulation required
to be described in the Prospectus is not described as required (except as to the “blue sky” laws of the various states,
as to which such counsel expresses no opinions), nor to such counsel’s knowledge are any contracts or documents of a character
required to be described in the Registration Statement, Disclosure Package or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement not so described or filed as required.
(vii)
The statements in the Registration Statement, Disclosure Package and the Prospectus under the heading “Description of Securities,”
insofar as such statements purport to summarize legal matters, legal conclusions, the Charter, the Bylaws, or other agreements
or documents discussed therein, are correct in all material respects.
(viii)
The Registration Statement has been declared effective by the Commission under the Securities Act and the Securities Act Regulations.
No stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act or any order
preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus has been
issued, and no proceedings for any such purpose have been instituted or, to such counsel’s knowledge, are pending by the
Commission or any other Governmental Entity. Any required filing of the Prospectus, and any required supplement thereto, pursuant
to Rule 424(b) under the Securities Act Regulations, has been made in the manner and within the time period required by Rule 424(b)
(without reference to Rule 424(b)(8)).
(ix)
The Company is not required and, after giving effect to the Offering and sale of the Firm/Additional Shares and the application
of the proceeds thereof as described in the Registration Statement, the Disclosure Package and the Prospectus, will not be required,
to register as an “investment company,” under the Investment Company Act of 1940, as amended.
(x)
No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental
Entity (other than under the Securities Act and the Securities Act Regulations or with NYSE American, which have been obtained,
or as may be required under the securities or blue sky laws of the various states, as to which we need express no opinion) is
necessary or required for the performance by the Company of its obligations under the Underwriting Agreement, in connection with
the offering, issuance or sale of the Firm/Additional Shares thereunder or the consummation of the transactions contemplated thereby,
except such as have been already made or obtained or as may be required under the rules of the Exchange, state securities laws
or the rules of FINRA.
(xi)
The Securities have been approved for listing on the Exchange upon official notice of issuance.
(xii)
To such counsel’s knowledge, there are no persons with registration rights or other similar rights to have any securities
registered pursuant to the Registrant Statement or otherwise registered for sale by the Company under the Securities Act, except
as disclosed in the Registration Statement, the Disclosure Package and the Prospectus.
(xiii)
To such counsel’s knowledge, there are not any pending legal proceedings to which the Company or any of its Subsidiaries
is a party or of which the property of the Company or any of its Subsidiaries is the subject which are required to be disclosed
in the Registration Statement, Disclosure Package and the Prospectus and are not so disclosed.
(xiv)
Each of (1) the Registration Statement, as of the time it became effective, (2) the Disclosure Package, as of the Applicable Time,
and (3) the Prospectus, as of its date (in each case other than the financial statements and supporting schedules included therein,
as to which no opinion need be rendered), complied as to form in all material respects with the requirements of the Securities
Act and Securities Act Regulations.
The
opinion shall further include the following:
Nothing
has come to such counsel’s attention that caused such counsel to believe that (1) the Registration Statement, as of the
time it became effective, contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; (2) the Disclosure Package, as of the Applicable Time,
contained an untrue statement of a material fact or omitted 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; or (3) the Prospectus, as of its date and
as of the Closing Date or Option Closing Date, as applicable, contained or contains an untrue statement of a material fact or
omitted or omits 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 (except that, in each case, such counsel need express no view, and make no statement,
with respect to the financial statements and schedules and notes thereto and other financial data derived therefrom that are contained
in or omitted from the Registration Statement, the Disclosure Package or the Prospectus).
