Exhibit 10.40


 


PLACEMENT AGENCY AGREEMENT


 


 


Dawson James Securities, Inc.

1 North Federal Highway

Boca Raton, Florida 33432


 


November [●], 2018


 


Ladies and Gentlemen:


 


This letter (this “Agreement”)
constitutes the agreement between Sonoma Pharmaceuticals Inc., a Delaware corporation (the “Company”), and Dawson
James Securities, Inc. (“Dawson” or the “Placement Agent”) pursuant to which Dawson shall
serve as the exclusive placement agent (the “Services”) for the Company, on a reasonable “best efforts”
basis, in connection with the proposed offer and placement (the “Offering”) by the Company of its Securities
(as defined Section 3 of this Agreement). The Company expressly acknowledges and agrees that Dawson’s obligations hereunder
are on a reasonable “best efforts” basis only and that the execution of this Agreement does not constitute a commitment
by Dawson to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the
success of Dawson placing the Securities.


 


		1.	Appointment of Dawson James Securities, Inc. as Exclusive Placement Agent. 



 


On the basis of the
representations, warranties, covenants and agreements of the Company herein contained, and subject to all the terms and conditions
of this Agreement, the Company hereby appoints the Placement Agent as its exclusive placement agent in connection with a distribution
of its Securities to be offered and sold by the Company pursuant to a registration statement filed under the Securities Act of
1933, as amended (the “Securities Act”) on Form S-1 (File No. 333-227806), and Dawson agrees to act as the Company’s
exclusive Placement Agent. Pursuant to this appointment, the Placement Agent will solicit offers for the purchase of or attempt
to place all or part of the Securities of the Company in the proposed Offering. Until the final closing or earlier upon termination
of this Agreement pursuant to Section 5 hereof, the Company shall not, without the prior written consent of the Placement Agent,
solicit or accept offers to purchase the Securities other than through the Placement Agent. The Company acknowledges that the Placement
Agent will act as an agent of the Company and use its reasonable “best efforts” to solicit offers to purchase the Securities
from the Company on the terms, and subject to the conditions, set forth in the Prospectus (as defined below). The Placement Agent
shall use commercially reasonable efforts to assist the Company in obtaining performance by each Purchaser whose offer to purchase
Securities has been solicited by the Placement Agent, but the Placement Agent shall not, except as otherwise provided in this Agreement,
be obligated to disclose the identity of any potential purchaser or have any liability to the Company in the event any such purchase
is not consummated for any reason. Under no circumstances will the Placement Agent be obligated to underwrite or purchase any Securities
for its own account and, in soliciting purchases of the Securities, the Placement Agent shall act solely as an agent of the Company.
The Services provided pursuant to this Agreement shall be on an “agency” basis and not on a “principal”
basis.


 


The Placement Agent
will solicit offers for the purchase of the Securities in the Offering at such times and in such amounts as the Placement Agent
deems advisable. The Company shall have the sole right to accept offers to purchase Securities and may reject any such offer, in
whole or in part. The Placement Agent may retain other brokers or dealers to act as sub-agents on its behalf in connection with
the Offering and may pay any sub-agent a solicitation fee with respect to any Securities placed by it. The Company and Placement
Agent shall negotiate the timing and terms of the Offering and acknowledge that the Offering and the provision of Placement Agent
services related to the Offering are subject to market conditions and the receipt of all required related clearances and approvals.


 


 


 






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		2.	Fees; Expenses; Other Arrangements.



 


A.                 
Placement Agent’s Fee. As compensation for services rendered, the Company shall pay to the Placement Agent
in cash by wire transfer in immediately available funds to an account or accounts designated by the Placement Agent an amount (the
“Placement Fee”) equal to eight percent (8.0%) of the aggregate gross proceeds received by the Company from
the sale of the Securities, at the closing (the “Closing” and the date on which the Closing occurs, the “Closing
Date”); and the Company shall issue to the Placement Agent or its designees at the Closing a five-year unit purchase
option to purchase such number of Units (as defined in Section 3) equal to 5.0% of the Units sold in this Offering at an exercise
price of $[●] per unit (125% of the price per Unit), which unit purchase option shall be exercisable at any time, during
the period commencing 180 days from the effective date of the Registration Statement (the “Effective Date”)
(the “Placement Agent Unit Purchase Option” and together with the shares of Common Stock and Warrants (and Common
Stock underlying such Warrants) underlying the Placement Agent Unit Purchase Option, the “Placement Agent Securities”).
The Placement Agent may deduct from the net proceeds of the Offering payable to the Company on the Closing Date the Placement Fee
set forth herein to be paid by the Company to the Placement Agent.


 


B.                 
Offering Expenses. The Company will be responsible for and will pay all expenses relating to the Offering, including,
without limitation, (a) all filing fees and communication expenses relating to the registration of the Public Securities to be
sold in the Offering with the Commission; (b) all actual Public Offering Filing System filing fees associated with the review of
the Offering by FINRA; (c) all fees and expenses relating to the listing of the Common Stock on the Exchange; (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 Placement Agent may reasonably designate (including, without limitation, all filing
and registration fees, and the reasonable fees and disbursements of “blue sky” counsel, which will be Dawson’s
counsel, it being agreed that such fees and expenses will be limited to $25,000); (e) all actual fees, expenses and disbursements
relating to the registration, qualification or exemption of the Securities under the securities laws of such foreign jurisdictions
as the Placement Agent may reasonably designate; (f) the costs of all mailing and printing of the Registration Statements, Prospectuses
and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Placement Agent may
reasonably deem necessary; (g) the costs of preparing, printing and delivering certificates representing the Securities; (h) fees
and expenses of the transfer agent for the Common Stock and warrant agent for the Warrants; (i)
stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Placement Agent; (j)
the fees and expenses of the Company’s accountants; (k) the fees and expenses of the Company’s legal counsel and other
agents and representatives; (l) the costs associated with a post-Closing advertising the Offering in the national editions of the
Wall Street Journal and New York Times not to exceed $2,500; (m) the costs associated with bound volumes of the public offering
materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee will provide within
a reasonable time after the Closing in such quantities as Dawson may reasonably request not to exceed $2,500; (n) the fees and
expenses of the Placement Agent’s legal counsel not to exceed $125,000 in the aggregate; and (o) the Placement Agent’s
actual “road show” expenses for the Offering not to exceed $12,500 in the aggregate. The Placement Agent may deduct
from the net proceeds of the Offering payable to the Company on the Closing Date the expenses set forth herein to be paid by the
Company to the Placement Agent, provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse
the Placement Agent to the extent required by Section 5 hereof.


 


C.                 
Right of First Refusal. During the period ending 9 months after the Closing Date, if and only if a closing of the
purchase of the Securities hereunder actually occurs, the Company grants the Placement Agent the right of first refusal to act
as lead managing underwriter or book runner, or as lead placement agent, for any and all future equity, equity-linked or debt (excluding
non-convertible debt, at the market financing and strategic investments) offerings during such period, of the Company, or any successor
to or any subsidiary of the Company, subject to the rights previously granted to the Benchmark Company, LLC.


 


		3.	Description of the Offering. 



 


The Securities to be
offered directly to various investors (each, an “Investor” or “Purchaser” and, collectively,
the “Investors” or the “Purchasers”) in the Offering shall consist of a combination of up
to 7,300,000 units with each unit consisting of (i) one share of the Company’s common stock (“Common Stock”
or “Shares”); and (ii) one-half of a warrant to purchase one share of Common Stock at an exercise price of $[●]
per whole share (the “Warrants”). The Common Stock and the Warrants will be sold as units (the “Units”,
with each Unit consisting of one Share and one-half of a Warrant to purchase one Share). The purchase price for one Unit shall
be $[●] per Unit (the “Unit Purchase Price”). To the extent that the purchase of Common Stock would cause
the beneficial ownership of a Purchaser in the Offering, together with its affiliates and certain related parties, to exceed 4.99%
of the Common Stock, the Company agrees to issue such Purchaser, a number shares of the Company’s Series C Preferred Stock
(the “Preferred Stock”), which is initially convertible on a 1-for-100,000 basis into Common Stock, in lieu
of the Common Stock included in the Unit. The Common Stock, Preferred Stock and Warrants shall be referred to as the “Securities”.
If the Company shall default in its obligations to deliver Securities to a Purchaser whose offer it has accepted and who has tendered
payment, the Company shall indemnify and hold the Placement Agent harmless against any loss, claim, damage or expense arising from
or as a result of such default by the Company under this Agreement.


 


 


 






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		4.	Delivery and Payment; Closing.



 


Settlement of the Securities
purchased by an Investor shall be made by 5:00 p.m. on the Closing Date by wire transfer in federal (same day) funds, payable to
the order of the Company against delivery of the Securities. On the Closing Date, the Shares (or Preferred Stock) and Warrants
to which the Closing relates shall be delivered through such means as the parties may hereafter agree. The Securities shall be
registered in such name or names and in such authorized denominations as the Placement Agent may request in writing at least one
Business Day prior to the Closing Date. 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.


 


The Closing shall occur
at such place as shall be agreed upon by the Placement Agent and the Company. In the absence of an agreement to the contrary, each
Closing shall take place at the offices of Schiff Hardin LLP, 901 K Street, NW, Suite 700, Washington, DC 20001. Deliveries of
the documents with respect to the purchase of the Securities, if any, shall be made at the offices of Schiff Hardin, LLP, 901 K
Street, NW, Suite 700, Washington, DC 20001 on the Closing Date. All actions taken at a Closing shall be deemed to have occurred
simultaneously.


 


		5.	Term and Termination of Agreement. 



 


The term of this Agreement
will commence upon the execution of this Agreement and will terminate at the earlier of the Closing of the Offering or 11:59 p.m.
(New York Time) on the fifth Business Day after the date hereof. Notwithstanding anything to the contrary contained herein, any
provision in this Agreement concerning or relating to confidentiality, indemnification, contribution, advancement, the Company’s
representations and warranties and the Company’s obligations to pay fees and reimburse expenses will survive any expiration
or termination of this Agreement. If any condition specified in Section 8 is not satisfied when and as required to be satisfied,
this Agreement may be terminated by the Placement Agent by notice to the Company at any time on or prior to a Closing Date, which
termination shall be without liability on the part of any party to any other party, except that those portions of this Agreement
specified in Section 19 shall at all times be effective and shall survive such termination. Notwithstanding anything to the
contrary in this Agreement, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time
specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Placement
Agent the expenses provided for in Section 2.B. above and upon demand the Company shall pay the full amount thereof to the Placement
Agent.


 


		6.	Permitted Acts.



 


Nothing in this Agreement
shall be construed to limit the ability of the Placement Agent, its officers, directors, employees, agents, associated persons
and any individual or entity “controlling,” controlled by,” or “under common control” with the Placement
Agent (as those terms are defined in Rule 405 under the Securities Act) to conduct its business including without limitation the
ability to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationship
with any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


		7.	Representations, Warranties and Covenants of the Company.



 


As of the date and
time of the execution of this Agreement, the Closing Date and the Initial Sale Time (as defined herein), the Company represents,
warrants and covenants to the Placement Agent, other than as disclosed in any of its filings with the Securities and Exchange Commission
(the “Commission”), that:


 


 


 






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A.                 
Registration Matters.


 


	 	i.	The Company has filed with the Commission a registration statement on Form S-1 (File No. 333-227806) including a related
prospectus, for the registration of certain securities (the “Shelf Securities”), including the Shares, the Preferred
Stock, the Common Stock underlying the Preferred Stock (the “Conversion Shares”), the Warrants, the Common Stock
underlying the Warrants (the “Warrants Shares”) and the Placement Agent Securities under the Securities Act,
and the rules and regulations thereunder (the “Securities Act Regulations”) 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, as amended, on file with the Commission at the time the registration
statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements,
schedules, exhibits and all other documents filed as a part thereof or incorporated therein by reference and all information deemed
to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “Rule
430A Information”)), is referred to herein as the “Registration Statement.” If the Company files any
registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration
Statement” shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been
declared effective by the Commission on the date hereof.
	 	 	 
		ii.	Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus
that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement,
is herein called a “Preliminary Prospectus.” The Preliminary Prospectus, subject to completion, dated [●],
2018, that was included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the “Pricing
Prospectus.” The final prospectus in the form first furnished to the Placement Agent for use in the Offering is hereinafter
called the “Prospectus.” Any reference to the “most recent Preliminary Prospectus” shall be deemed
to refer to the latest Preliminary Prospectus included in the Registration Statement.
	 	 	 
	 	iii.	All references in this Agreement to financial statements and schedules and other information which is “contained,”
“included” or “stated” (or other references of like import) in the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to include all such financial statements and schedules and other information incorporated
or deemed incorporated by reference in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may
be, prior to the execution and delivery of this Agreement; and all references in this Agreement to amendments or supplements to
the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to include the filing of any document
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder
(the “Exchange Act Regulations”), incorporated or deemed to be incorporated by reference in the Registration
Statement, such Preliminary Prospectus or the Prospectus, as the case may be, at or after the execution and delivery of this Agreement.
	 	 	 
	 	iv.	The term “Disclosure Package” means (i) the Preliminary Prospectus, as most recently amended or supplemented
immediately prior to the Initial Sale Time (as defined herein), (ii) the Issuer Free Writing Prospectuses (as defined below), if
any, identified in Schedule I hereto, and (iii) any other Free Writing Prospectus (as defined below) that the parties hereto shall
hereafter expressly agree to treat as part of the Disclosure Package.
	 	 	 
	 	v.	The term “Issuer Free Writing Prospectus” means any issuer free writing prospectus, as defined in Rule
433 of the Securities Act Regulations. The term “Free Writing Prospectus” means any free writing prospectus,
as defined in Rule 405 of the Securities Act Regulations. For purposes of clarity, the Company is not permitted to use any Free
Writing Prospectus.
	 	 	 
	 	vi.	Neither the Company nor any of the Subsidiaries (as defined herein), nor any of their respective affiliates, officers, directors
or, to the Company’s knowledge, any beneficial owner of 5% or more of the Company's equity securities, (i) is required to
register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or the Exchange
Act Regulations, or (ii) has any direct or indirect affiliation or association with any member firm of Financial Industry Regulatory
Authority, Inc. (“FINRA”) (as determined in accordance with the rules and regulations of FINRA).



 


 


 






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	 	vii.	Any Preliminary Prospectus when filed with the Commission, and the Registration Statement as of each effective date and
as of the date hereof, complied or will comply, and the Prospectus and any further amendments or supplements to the Registration
Statement, any Preliminary Prospectus or the Prospectus will, when they become effective or are filed with the Commission, as the
case may be, comply, in all material respects, with the requirements of the Securities Act and the Securities Act Regulations;
and the documents incorporated by reference in the Registration Statement, any Preliminary Prospectus or the Prospectus complied,
and any further documents so incorporated will comply, when filed with the Commission, in all material respects to the requirements
of the Exchange Act and Exchange Act Regulations.
	 	 	 
	 	viii.	The issuance by the Company of the Securities, the Warrant Shares, the Conversion Shares and the Placement Agent Securities
has been registered under the Securities Act. The Securities, the Warrant Shares, the Conversion Shares and the Placement Agent
Securities will be issued pursuant to the Registration Statement and each of the Securities, the Warrant Shares, the Conversion
Shares and the Placement Agent Securities will be freely transferable and freely tradable by each of the Investors without restriction,
unless otherwise restricted by applicable law or regulation.



 


B.                 
Stock Exchange Listing. The Warrant Shares, the Conversion Shares, and Common Stock are approved for listing on the
NASDAQ Capital Market (the “Exchange”) and the Company has taken no action designed to, or likely to have the
effect of, delisting the shares of Common Stock from the Exchange, nor has the Company received any notification that the Exchange
is contemplating terminating such listing, except as disclosed in the SEC Reports (as defined below).


 


C.                 
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.


 


D.                 
Subsidiaries. Each of the Company’s subsidiaries have been duly incorporated and are validly existing as entities
in good standing under the laws of jurisdictions of their respective organization, with power and authority to own, lease and operate
their respective properties and conduct their respective businesses as described in the Preliminary Prospectus, and have been duly
qualified as foreign corporations for the transaction of business and are in good standing under the laws of each other jurisdictions
in which they own or lease properties or conduct any business so as to require such qualification, except where the failure so
to qualify or be in good standing would not have a Material Adverse Change (as defined below); all of the issued and outstanding
capital stock (or other ownership interests) of such subsidiaries has been duly and validly authorized and issued, is fully paid
and non-assessable and is owned, directly and indirectly, by the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. Unless otherwise set forth, all references in this Section 7 to the “Company” shall
include references to all such subsidiaries.


 


E.                  
Disclosures in Registration Statement.


 


		i.	Compliance with Securities Act and 10b-5 Representation. 



 


(a)                
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in
all material respects with the requirements of the Securities Act and the Securities Act Regulations. The Preliminary Prospectus
and the Prospectus, at the time each was or will be filed with the Commission, complied or will comply in all material respects
with the requirements of the Securities Act and the Securities Act Regulations. The Preliminary Prospectus delivered to the Placement
Agent 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.


 


 


 


 






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(b)               
Neither the Registration Statement nor any amendment thereto, at its effective time, as of [●]:00 [●].m. (Eastern
time) on the date of this Agreement (the “Initial Sale Time”), at the Closing Date, contained, contains or will
contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; 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 Placement Agent by the Placement Agent expressly for use in the Registration Statement or any amendment thereof
or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Placement Agent
consists solely of the following disclosure contained in the following paragraphs in the “Plan of Distribution” section
of the Prospectus: (i) the name of the Placement Agent, and (ii) the information regarding fees and expenses (the “Placement
Agent’s Information”).


 


(c)                
The Disclosure Package, as of the Initial Sale Time and at the Closing Date, 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; 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 Placement Agent by the Placement Agent expressly for use in the Registration Statement, the Preliminary Prospectus
or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided
by or on behalf of any Placement Agent consists solely of the Placement Agent’s Information; and


 


(d)               
 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, 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 Placement Agent's Information.


 


	 	ii.	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 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, and (ii) is material to the Company's business, has been duly authorized and validly executed by the
Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company's knowledge,
the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company
nor, to the Company's knowledge, any other party is in default thereunder and, to the Company's knowledge, no event has occurred
that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder, except as disclosed in the
Registration Statement, the Disclosure Package and the Prospectus. To the Company's knowledge, performance by the Company of the
material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any
of its assets or businesses (each, a “Governmental Entity”), including, without limitation, those relating to
environmental laws and regulations.
	 	 	 
	 	iii.	Prior Securities Transactions. For the past two completed fiscal years through the date hereof, no securities of
the Company have been sold by the Company or, to the Company’s knowledge, 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 Preliminary Prospectus or, with respect to parties other than the Company, other filings
by such other persons with the Commission.



 


	 	iv.	Regulations. The disclosures in the Registration Statement, the Disclosure Package
    and the Prospectus concerning the effects of federal, state, local and all foreign regulation on the Offering and the Company's
    business as currently contemplated are correct in all material respects and no other such regulations are required to be disclosed
    in the Registration Statement, the Disclosure Package and the Prospectus which are not so disclosed.
	 	 	 
		v.	Changes After Dates in Registration Statement.



 



 


 






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(a)                
No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement,
the Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse
change in the financial position or results of operations of the Company, nor any change or development that, singularly or in
the aggregate, would involve a material adverse change, in or affecting the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material
transactions entered into by the Company, 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.


 


(b)               
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 (i) grants under any stock compensation plan and (ii) shares of common stock issued upon exercise or conversion of option,
warrants or convertible securities described in the Registration Statement, the Disclosure Package and the Prospectus) 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.


 


F.                  
Independent Accountants. To the knowledge of the Company, Marcum, LLP (the “Auditors”), 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. During such time period in which the Auditors served as the Company's independent registered
public accounting firm the Auditors did not or have 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.


 


G.                 
 SEC Reports; Financial Statements, etc. The Company has complied in all material respects with requirements to file
all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis
or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and
the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal year-end
audit adjustments that are not expected to be material in the aggregate. The financial statements, including the notes thereto
and supporting schedules included in the Registration Statement, the Disclosure Package and the Prospectus, fairly present in all
material respects the financial position and the results of operations of the Company at the dates and for the periods to which
they apply; and such financial statements have been prepared in conformity with GAAP, consistently applied throughout the periods
involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected
to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the
Registration Statement present fairly in all material respects the information required to be stated therein. Except as included
therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Disclosure
Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial
information and the related notes, if any, included in the Registration Statement, the Disclosure Package and the Prospectus have
been properly compiled and prepared in all material respects in accordance with the applicable requirements of the Securities Act
and the Securities Act Regulations and present fairly in all material respects the information shown therein, and the assumptions
used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein. All disclosures contained in the Registration Statement, the Disclosure Package or the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission), if
any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable.
Each of the Registration Statement, the Disclosure Package and the Prospectus discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities
or other persons that may have a material current or future effect on the Company's financial condition, changes in financial condition,
results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except
as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, (a) the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of
business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital
stock, (c) there has not been any change in the capital stock of the Company (other than (i) grants under any stock compensation
plan and (ii) shares of common stock issued upon exercise or conversion of option, warrants or convertible securities described
in the Registration Statement, the Disclosure Package and the Prospectus), and (d) there has not been any Material Adverse Change
in the Company's long-term or short-term debt.


 


 


 






    	 	7	 



     


    

 


H.                 
 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, on the Effective Date, as of the Initial Sale Time, on the 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 any security convertible or exercisable into shares of Common Stock of the Company, or any contracts
or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.


 


I.                   
Valid Issuance of Securities, etc.


 


i.                       
 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 disclosed in the
Registration Statement, the Disclosure Package and the Prospectus, the holders thereof have no rights of rescission with respect
thereto, and are not subject to personal liability by reason of being such holders; and except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, none of such securities were issued in violation of the preemptive rights
of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized shares of Common
Stock, Company preferred stock and other outstanding securities conform in all material respects to all statements relating thereto
contained in the Registration Statement, the Disclosure Package and the Prospectus. Except as disclosed in the Registration Statement,
the Disclosure Package and the Prospectus, the offers and sales of the outstanding shares of Common Stock were at all relevant
times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in
part on the representations and warranties of the purchasers of such shares, exempt from such registration requirements. The authorized
shares of Common Stock, Company preferred stock (including the Preferred Shares), Warrants and other securities of the Company
to be outstanding upon consummation of the Offering conform in all material respects to all statements relating thereto contained
in the Registration Statement, the Disclosure Package and the Prospectus.


 


ii.                       
Securities Sold Pursuant to this Agreement. The Common Stock, the Preferred Stock (upon the filing and acceptance
of the certificate of designation), the Warrants, the Warrant Shares, the Conversion Shares (upon the filing and acceptance of
the certificate of designation), and the Placement Agent 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 Common Stock, the Preferred Stock, the Warrants, the Warrant Shares, the Conversion
Shares, and the Placement Agent Securities are not and will not be subject to the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the authorization,
issuance and sale of the Common Stock, the Preferred Stock, Warrants, the Warrant Shares, the Conversion Shares, and the Placement
Agent Securities has been duly and validly taken; the Warrant Shares and Common Stock underlying the Placement Agent Unit Purchase
Option have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and when
paid for, if applicable, and issued in accordance with the Warrants or Placement Agent Unit Purchase Option, such Warrant Shares
or Placement Agent Securities will be validly issued, fully paid and non-assessable. The Securities and Placement Agent Securities
conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Disclosure
Package and the Prospectus.


 


J.                   
Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Disclosure Package,
and the Prospectus, and except as provided in the Placement Agent Unit Purchase Option, no holders of any securities of the Company
or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company
to register any such securities of the Company under the Securities Act or to include any such securities in a registration statement
to be filed by the Company (except for any such rights that have been waived).


 


 


 






    	 	8	 



     


    

 


K.                 
Validity and Binding Effect of Agreements. This Agreement, the Placement Agent Unit Purchase Option, and the warrant
agent agreement by and between the Company and Computershare, Inc (the “Warrant Agent Agreement”) each has been
duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreement
of the Company, enforceable against the Company in accordance with its respective terms, except: (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (ii) as enforceability
of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the
remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and
to the discretion of the court before which any proceeding therefor may be brought.


 


L.                  
No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Warrant Agreement
and the Placement Agent’s Unit Purchase Option Agreement and all ancillary documents, the consummation by the Company of
the transactions herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and
will not, with or without the giving of notice or the lapse of time or both: (i) result in a breach of, or conflict with any of
the terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or imposition
of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any agreement or instrument
to which the Company is a party; (ii) result in any violation of the provisions of the Company’s Certificate of Incorporation,
including without limitation, the certificate of designation for the Preferred Shares (as the same may be amended or restated from
time to time, the “Charter”) or the by-laws of the Company (as the same may be amended or restated from time
to time, the “Bylaws”); or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree
of any Governmental Entity as of the date hereof, including, without limitation, those promulgated by the Food and Drug Administration
of the U.S. Department of Health and Human Services (the “FDA”) or by any foreign, federal, state or local regulatory
authority performing functions similar to those performed by the FDA, that, in any case (except in the case of clause (ii), would
reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change.


 


M.                
Regulatory. Except as described in the Registration Statement, the Disclosure Package and the Prospectus or as would
not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change: (i) the Company has not received
any FDA Form 483, notice of adverse finding, warning letter or other correspondence or notice from the FDA or any other Governmental
Entity alleging or asserting noncompliance with any Applicable Laws (as defined in clause (ii) below) or Authorizations (as defined
in clause (iii) below); (ii) the Company is and has been in material compliance with statutes, laws, ordinances, rules and regulations
applicable to the Company for 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, including without limitation, the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq., similar laws of
other Governmental Entities and the regulations promulgated pursuant to such laws (collectively, “Applicable Laws”);
(iii) the Company possesses all licenses, certificates, approvals, clearances, consents, authorizations, qualifications, registrations,
permits, and supplements or amendments thereto required by any such Applicable Laws and/or to carry on its businesses as now conducted
(“Authorizations”) and such Authorizations are valid and in full force and effect and the Company is not in
violation of any term of any such Authorizations; (iv) the Company 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 or has any knowledge that any such Governmental
Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding, nor, to
the best of the Company’s knowledge, has there been any material noncompliance with or violation of any Applicable Laws by
the Company that could reasonably be expected to require the issuance of any such communication or result in an investigation,
corrective action, or enforcement action by FDA or similar Governmental Entity; (v) the Company 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 or has
any knowledge that any such Governmental Entity has threatened or is considering such action; (vi) the Company has filed, obtained,
maintained or submitted all 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, correct and not misleading on the date filed (or were corrected
or supplemented by a subsequent submission); and (vii) the Company has not, either voluntarily or involuntarily, initiated, conducted
or issued, or caused to be initiated, conducted or issued, any material recall, market withdrawal or replacement, safety alert,
post-sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy
of any product or any alleged product defect or violation and, to the Company’s knowledge, no third party has initiated,
conducted or intends to initiate or conduct such notice or action. Neither the Company nor, to the Company's knowledge, any of
its directors, officers, employees or agents has been convicted of any crime under any Applicable Laws or has been the subject
of an FDA debarment proceeding. The Company has not been or is now subject to FDA's Application Integrity Policy. To the Company's
knowledge, neither the Company, nor any of its directors, officers, employees or agents, has made, or caused the making of, any
false statements on, or material omissions from, any other records or documentation prepared or maintained to comply with the requirements
of the FDA or any other Governmental Entity. Neither the Company nor, to the Company's knowledge, any of its directors, officers,
employees or agents, have with respect to each of the following statutes, or regulations promulgated thereto, as applicable: (i)
engaged in activities under 42 U.S.C. §§ 1320a-7b or 1395nn; (ii) knowingly engaged in any activities under 42 U.S.C.
§ 1320a-7b or the Federal False Claims Act, 31 U.S.C. § 3729; or (iii) knowingly and willfully engaged in any activities
under 42 U.S.C.§ 1320a-7b, which are prohibited, cause for civil penalties, or mandatory or permissive exclusion from Medicare,
Medicaid, or any other State Health Care Program or Federal Health Care Program.


 


 


 






    	 	9	 



     


    

 


N.                 
No Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or
condition of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is
a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company
is not (i) in violation of any term or provision of its Charter or Bylaws, or (ii) in violation of any franchise, license, permit,
applicable law, rule, regulation, judgment or decree of any Governmental Entity applicable to the Company, except violations that
would not reasonably be expected to have a Material Adverse Change.


 


O.                 
Corporate Power; Licenses; Consents.


 


i.                       
Except as described in the Registration Statement, the Disclosure Package and the Prospectus, the Company has all requisite
corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and
from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described
in the Registration Statement, the Disclosure Package and the Prospectus, except where such failure, singularly or in the aggregate,
would not have or reasonably be expected to result in a Material Adverse Change.


 


ii.                       
The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions
hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No consent,
authorization or order of, and no filing with, any court, government agency or other body is required for the valid issuance, sale
and delivery of the Common Stock, the Preferred Stock, Warrants, Warrant Shares, Conversion Shares, or Placement Agent 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”).


 


P.                  
D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
as supplemented by all information concerning the Company’s directors, officers and principal stockholders as described in
the Registration Statement, the Disclosure Package and the Prospectus, provided to the Placement Agent, is true and correct in
all material respects and the Company has not become aware of any information which would cause the information disclosed in the
Questionnaires to become materially inaccurate and incorrect.


 


Q.                 
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 or,
to the Company's knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Disclosure
Package and the Prospectus or in connection with the Company's listing application for the additional listing of the Common Stock,
Warrant Shares and Conversion Shares on the Exchange.


 


R.                 
Good Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing
under the laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in
each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except
where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material
Adverse Change.


 


S.                  
Insurance. The Company carries or is entitled to the benefits of insurance, with, to the Company's knowledge, reputable
insurers, and in such amounts and covering such risks which the Company believes are reasonably adequate, and all such insurance
is in full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance
coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.


 


 


 






    	 	10	 



     


    

 


T.                  
Transactions Affecting Disclosure to FINRA.


 


i.                       
Finder's Fees. 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 executive officer or director of the Company (each an, “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 stockholders that may affect the Placement Agent’s compensation, as determined by
FINRA.


 


ii.                       
Payments Within Twelve (12) Months. Except as described in the Registration Statement, the Disclosure Package and
the Prospectus and pursuant to the financial services agreement between the Company and The Benchmark Company, LLC (“Benchmark”),
the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder's fee,
consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons
who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member, within the twelve (12) months prior to the date hereof, other than (A) the payment
to the Placement Agent as provided hereunder in connection with the Offering, and (B) other payments to the Placement Agent under
other engagement letters.


 


iii.                       
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 to Benchmark as disclosed in the Disclosure Package and as specifically authorized herein.


 


iv.                       
FINRA Affiliation. There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, beneficial
owner of 5% or more of any class of the Company's securities or (iii) to the Company’s knowledge, 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).


 


v.                       
Information. To the Company's knowledge, all information provided by the Company's officers and directors in their
FINRA Questionnaires to counsel to the Placement Agent specifically for use by counsel to the Placement Agent in connection with
its Public Offering Filing System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.


 


U.                 
Foreign Corrupt Practices Act. Neither the Company nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any other person acting on behalf of the Company, 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 Entity or any
political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder
the business of the Company (or assist it in connection with any actual or proposed transaction) that (i) might subject the Company
to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might
have had a Material Adverse Change or (iii) if not continued in the future, might adversely affect the assets, business, operations
or prospects of the Company. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient
to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.


 


V.                 
Compliance with OFAC. Neither of the Company nor, to the Company's knowledge, any director, officer, agent, employee
or affiliate of the Company or any other person acting on behalf of the Company, 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.


 


 


 






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W.               
Money Laundering Laws. The operations of the Company 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 applicable jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with
respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.


 


X.                 
Officers' Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you
or to Placement Agent Counsel shall be deemed a representation and warranty by the Company to the Placement Agent as to the matters
covered thereby.


 


Y.                 
Related Party Transactions. There are no business relationships or related party transactions involving the Company
or any other person required to be described in the Registration Statement, the Disclosure Package and the Prospectus that have
not been described as required.


 


Z.                  
Board of Directors. The qualifications of the persons serving as board members and the overall composition of the
board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder
(the “Sarbanes-Oxley Act”) applicable to the Company and the listing rules of the Exchange. At least one member
of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,”
as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons
serving on the Board of Directors qualify as “independent,” as defined under the listing rules of the Exchange.


 


AA.            
Sarbanes-Oxley Compliance.


 


i.                       
The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15 or
15d-15 under the Exchange Act Regulations applicable to it, and such controls and procedures are effective to ensure that all material
information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the
Company's Exchange Act filings and other public disclosure documents.


 


ii.                       
The Company is, or at the Initial Sale 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.


 


BB.             
Accounting Controls. The Company maintains systems of “internal control over financial reporting” (as
defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply in all material respects with the requirements
of the Exchange Act and have been designed by, or under the supervision of, its 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 Auditors and the
Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses,
if any, 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, if any, 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.


 


 


 






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CC.             
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.


 


DD.            
No Labor Disputes. No material labor dispute with the employees of the Company exists or, to the knowledge of the
Company, is imminent.


 


EE.             
Intellectual Property Rights. To the Company's knowledge, the Company has, or can acquire on reasonable terms, ownership
of and/or license to, or otherwise has the right to use, all inventions, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or procedures), patents and patent rights trademarks, service
marks and trade names, copyrights, (collectively “Intellectual Property”) material to carrying on its business
as described in the Prospectus. The Company has not received any correspondence relating to (A) infringement or misappropriation
of, or conflict with, any Intellectual Property of a third party; (B) asserted rights of others with respect to any Intellectual
Property of the Company; or (C) assertions that any Intellectual Property of the Company is invalid or otherwise inadequate to
protect the interest of the Company, that in each case (if the subject of any unfavorable decision, ruling or finding), individually
or in the aggregate, would have or would reasonably be expected to have a Material Adverse Change. There are no third parties who
have been able to establish any material rights to any Intellectual Property, except for the retained rights of the owners or licensors
of any Intellectual Property that is licensed to the Company. There is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others: (A) challenging the validity, enforceability or scope of any Intellectual Property of the
Company or (B) challenging the Company's rights in or to any Intellectual Property or (C) that the Company materially infringes,
misappropriates or otherwise violates or conflicts with any Intellectual Property or other proprietary rights of others. The Company
has complied in all material respects with the terms of each agreement described in the Registration Statement, Disclosure Package
or Prospectus pursuant to which any Intellectual Property is licensed to the Company, and all such agreements related to products
currently made or sold by the Company, or to products currently under development, are in full force and effect. All patents issued
in the name of, or assigned to, the Company, and all patent applications made by or on behalf of the Company (collectively, the
“Company Patents”) have been duly and properly filed. The Company is not aware of any material information that
was required to be disclosed to the United States Patent and Trademark Office (the “PTO”) but that was not disclosed
to the PTO with respect to any issued Company Patent, or that is required to be disclosed and has not yet been disclosed in any
pending application in the Company Patents and that would preclude the grant of a patent on such application. To the Company's
knowledge, the Company is the sole owner of the Company Patents.


 


FF.              
Taxes. The Company 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. The Company 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, except
for such exceptions as could not be expected, individually or in the aggregate, to have a Material Adverse Change. The provisions
for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient
for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated
financial statements. Except as disclosed in writing to the Placement Agent, (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, 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.
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.


 


GG.            
Employee Benefit Laws. To the extent applicable, the operations of the Company and its subsidiaries are and have
been conducted at all times in material compliance with the Employee Retirement Income Security Act of 1974, as amended, the rules
and regulations thereunder and any applicable related or similar rules, regulations or guidelines, issued, administered or enforced
by any governmental agency (collectively, the “Employee Benefit Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator involving the Company or its subsidiaries with
respect to the Employee Benefit Laws is pending or, to the knowledge of the Company, threatened.


 


 


 






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HH.            
Compliance with Laws. The Company: (A) is and at all times has been in compliance with all Applicable Laws, except
as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received
any correspondence from any Governmental Entity alleging or asserting noncompliance with any Applicable Laws or any Authorizations;
(C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and the Company is not
in material violation of any term of any such Authorizations, in each case except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Change; (D) has not received written 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
Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has
not received written notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify
or revoke any Authorizations; (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and
that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were
complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission);
and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued,
any recall, market withdrawal or replacement, or other notice or action relating to the alleged lack of safety or efficacy of any
product or any alleged product defect or violation and, to the Company's knowledge, no third party has initiated, conducted or
intends to initiate any such notice or action.


 


II.                 
[Reserved.]


 


JJ.                
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.


 


KK.            
[Reserved].


 


LL.             
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 the Registration Statement, the Disclosure Package or the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.


 


MM.          
Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of
the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds
of Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the shares of Common Stock to be considered a “purpose credit” within the meanings
of Regulation T, U or X of the Federal Reserve Board.


 


NN.            
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.


 


OO.            
Confidentiality and Non-Competition. 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 reasonably be expected to 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.


 


 


 






    	 	14	 



     


    

 


PP.              
Restriction on Sales of Capital Stock.
The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Placement Agent,
it will not, for a period of six months after 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; (ii) file
or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of
the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company (other
than pursuant to a registration statement on Form S-8 for employee benefit plans); or (iii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company,
whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock
of the Company or such other securities, in cash or otherwise. The restrictions contained in this section shall not apply to (i)
the issuance by the Company of shares of Common Stock upon the exercise of a stock option, restricted stock unit or warrant or
the conversion of a security outstanding on the date hereof and disclosed in the Registration Statement and the Disclosure Package
(provided that such security has not been amended or modified or the term thereof extended since the date hereof), (ii) the grant
by the Company of stock options or other stock-based awards, or the issuance of shares of capital stock of the Company under any
equity compensation plan of the Company for services rendered to the Company, or (iii) the issuance of securities in connection
with mergers, acquisitions, joint ventures, licensing arrangements or any other similar non-capital raising transactions provided
that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights
that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section
7.PP. herein, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself
or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company
and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction
in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities.


 


QQ.            
Lock-Up Agreements. The Company has caused each of its officers and directors to deliver to the Placement Agent an
executed Lock-Up Agreement, in such form as approved by the Placement Agent (the “Lock-Up Agreement”), prior
to the execution of this Agreement.


 


		8.	Conditions of the Obligations of the Placement Agent. 



 


The obligations of
the Placement Agent hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company
set forth in Section 7 hereof, in each case as of the date hereof and as of the Closing Date as though then made, to the timely
performance by each of the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the
following additional conditions:


 


A.                 
Regulatory Matters.


 


i.                       
Effectiveness of Registration Statement; Rule 424 Information. The Registration Statement is effective on the date
of this Agreement, and, on the Closing Date no stop order suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional
information. All filings with the Commission required by Rule 424 under the Securities Act to have been filed by the Closing Date,
shall have been made within the applicable time period prescribed for such filing by Rule 424.


 


ii.                       
FINRA Clearance. On or before the Closing Date of this Agreement, the Placement Agent shall have received clearance
from FINRA as to the amount of compensation allowable or payable to the Placement Agent as described in the Registration Statement.


 


iii.                       
Exchange Stock Market Clearance. On the Closing Date, the Common Shares and the Warrant Shares shall have been approved
for listing on the Exchange, subject only to official notice of issuance.


 


B.                 
Company Counsel Matters.


 


i.                       
On the Closing Date, the Placement Agent shall have received the favorable opinion of Trombly Business Law, PC, outside
counsel for the Company counsel to the Company, dated the Closing Date and addressed to the Placement Agent, substantially in form
and substance reasonably satisfactory to the Placement Agent.


 


 


 



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C.                 
Comfort Letters.


 


i.                       
Comfort Letter. At the time this Agreement is executed, Placement Agent shall have received from the Auditors 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 Placement Agent and in form and substance satisfactory in all respects to Placement Agent
and to the Auditors, dated as of the date of this Agreement.


 


ii.                       
Bring-down Comfort Letter. At the Closing Date, the Placement Agent shall have received from the Auditors a letter,
dated as of the Closing Date, to the effect that the Auditors reaffirm the statements made in the letter furnished pursuant to
Section 8.C.i. except that the specified date referred to shall be a date not more than three (3) business days prior to the Closing
Date.


 


D.                 
Officers’ Certificates.


 


i.                       
Officers’ Certificate. The Company shall have furnished to the Placement Agent a certificate, dated the Closing
Date, of its Chief Executive Officer, and its Chief Financial Officer stating on behalf of the Company and not in an individual
capacity that (i) such officers have carefully examined the Registration Statement, the Disclosure Package, and the Prospectus
and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date,
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, and as of the Closing Date the Prospectus and each amendment or supplement thereto, as of the respective date thereof
and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since
the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment
to the Registration Statement, the Disclosure Package or the Prospectus, (iii) to their knowledge after reasonable investigation,
as of the Closing Date, the representations and warranties of the Company in this Agreement are true and correct in all material
respects (except for those representations and warranties qualified as to materiality, which shall be true and correct in all respects
and except for those representations and warranties which refer to facts existing at a specific date, which shall be true and correct
as of such date) and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, and (iv) there has not been, subsequent to the date of the most recent audited financial
statements included 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, 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.


 


ii.                       
Secretary’s Certificate. As of the Closing Date the Placement Agent shall have received a certificate of the
Company signed by the Secretary of the Company, dated the Closing Date, certifying: (i) that each of the Company’s 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 relating to the Offering are in full force and effect and have not been modified; (iii) that the certificate
of designation for the Preferred Stock has been filed and accepted in the State of Delaware; and (iv) the good standing of the
Company and its U.S. subsidiaries. The documents referred to in such certificate shall be attached to such certificate.


 


E.                  
No Material Changes. Prior to and on the Closing Date: (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, the Disclosure Package
and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the
Company or any affiliates of the Company before or by any court or federal or state commission, board or other administrative agency
wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial
condition or income of the Company, except as set forth in the Registration Statement, 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; and (iv) 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 nor the Prospectus nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.


 


 


 






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F.                  
Reservation of Common Stock. So long as any Warrants or Preferred Stock remain outstanding, the Company shall take
all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the maximum
number of shares of Common Stock issuable upon exercise of the Warrants or the Placement Agent Unit Purchase Option, or upon conversion
of the Preferred Stock.


 


G.                 
Delivery of Agreements.


 


(i) Lock-Up Agreements. On or before the date
of this Agreement, the Company shall have delivered to the Placement Agent executed copies of the Lock-Up Agreements from each
of the Company’s officers and directors.


 


(ii) Warrant Agent Agreement. On the Closing
Date, the Company shall have delivered to the Placement Agent an executed copy of the Warrant Agent Agreement.


 


(iii) Placement Agent Unit Purchase Option Agreement.
On the Closing Date, the Company shall have delivered to the Placement Agent executed copies of the Placement Agent’s Unit
Purchase Option Agreement.


 


H.                 
Additional Documents. At the Closing Date, Placement Agent Counsel shall have been furnished with such documents
and opinions as they may require 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 Placement Agent and Placement Agent Counsel.


 


		9.	Indemnification and Contribution; Procedures. 



 


A.                 
Indemnification of the Placement Agent. The Company agrees to indemnify and hold harmless the Placement Agent, its
affiliates and each person controlling such Placement Agent (within the meaning of Section 15 of the Securities Act), and the directors,
officers, agents and employees of the Placement Agent, its affiliates and each such controlling person (the Placement Agent, and
each such entity or person hereafter is referred to as an “Indemnified Person”) from and against any losses,
claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”), and
shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of counsel for the
Indemnified Persons, except as otherwise expressly provided in this Agreement) (collectively, the “Expenses”)
and agrees to advance payment of such Expenses as they are incurred by an Indemnified Person in investigating, preparing, pursuing
or defending any actions, whether or not any Indemnified Person is a party thereto, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in (i) the Registration Statement, the Disclosure Package, the Preliminary
Prospectus, or the Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided
to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road
show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application
or other document or written communication (in this Section 9, collectively called “application”) executed by the Company
or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities
laws thereof or filed with the Commission, any state securities commission or agency, any national securities exchange; or the
omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, the Placement Agent’s information. The Company also agrees to reimburse each Indemnified Person
for all Expenses as they are incurred in connection with such Indemnified Person’s enforcement of his or its rights under
this Agreement.


 


 


 






    	 	17	 



     


    

 


B.                 
Procedure. Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with
respect to which indemnity may reasonably be expected to be sought under this Agreement, such Indemnified Person shall promptly
notify the Company in writing; provided that failure by any Indemnified Person so to notify the Company shall not relieve the Company
from any obligation or liability which the Company may have on account of this Section 9 or otherwise to such Indemnified Person,
except to the extent (and only to the extent) that its ability to assume the defense is actually impaired by such failure or delay.
The Company shall, if requested by the Placement Agent, assume the defense of any such action (including the employment of counsel
and reasonably satisfactory to the Placement Agent). Any Indemnified Person shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless: (i) the Company has failed promptly to assume the defense and employ counsel for the benefit of the
Placement Agent and the other Indemnified Persons or (ii) such Indemnified Person shall have been advised that in the opinion of
counsel that there is an actual or potential conflict of interest that prevents (or makes it imprudent for) the counsel engaged
by the Company for the purpose of representing the Indemnified Person, to represent both such Indemnified Person and any other
person represented or proposed to be represented by such counsel, it being understood, however, that the Company shall not be liable
for the expenses of more than one separate counsel (together with local counsel), representing the Placement Agent and all Indemnified
persons who are parties to such action. The Company shall not be liable for any settlement of any action effected without its written
consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the
Placement Agent, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened
action in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not
such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional
release of each Indemnified Person, acceptable to such Indemnified Party, from all Liabilities arising out of such action for which
indemnification or contribution may be sought hereunder 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 Person. The advancement, reimbursement, indemnification and contribution
obligations of the Company required hereby shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as every Liability and Expense is incurred and is due and payable, and in such amounts as fully satisfy each and every
Liability and Expense as it is incurred (and in no event later than 30 days following the date of any invoice therefor).


 


C.                 
Indemnification of the Company. The Placement Agent agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all Liabilities, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Disclosure
Package or Prospectus or any amendment or supplement thereto, in reliance upon, and in strict conformity with, the Placement Agent’s
Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary
Prospectus, the Registration Statement, the Disclosure Package or Prospectus or any amendment or supplement thereto, and in respect
of which indemnity may be sought against the Placement Agent, the Placement Agent shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the rights and duties given to the Placement Agent by
the provisions of Section 9.B. The Company agrees promptly to notify the Placement Agent of the commencement of any litigation
or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the
Securities or in connection with the Registration Statement, the Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus, provided, that failure by the Company so to notify the Placement Agent shall
not relieve the Placement Agent from any obligation or liability which the Placement Agent may have on account of this Section
9.C. or otherwise to the Company, except to the extent the Placement Agent is materially prejudiced as a proximate result of such
failure.


 


 


 






    	 	18	 



     


    

 


D.                 
Contribution. In the event that a court of competent jurisdiction makes a finding that indemnity is unavailable to
any indemnified person, then each indemnifying party shall contribute to the Liabilities and Expenses paid or payable by such indemnified
person in such proportion as is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement
Agent and any other Indemnified Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation
provided by the immediately preceding clause is not permitted by applicable law, not only such relative benefits but also the relative
fault of the Company, on the one hand, and the Placement Agent and any other Indemnified Person, on the other hand, in connection
with the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided
that in no event shall the Company contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate,
are not liable for any Liabilities and Expenses in excess of the amount of commissions actually received by the Placement Agent
pursuant to this Agreement. The relative fault 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 Placement Agent on the other and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company and the Placement Agent agree that it
would not be just and equitable if contributions pursuant to this subsection (D) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to above in this subsection (D).
For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement Agent on the other
hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as: (a) the total value received
by the Company in the Offering, whether or not such Offering is consummated, bears to (b) the commissions paid to the Placement
Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.


 


E.                  
Limitation. The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any
Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s actions
or inactions in connection with any such advice, services or transactions, except to the extent that a court of competent jurisdiction
has made a finding that Liabilities (and related Expenses) of the Company have resulted primarily from such Indemnified Person’s
gross negligence or willful misconduct in connection with any such advice, actions, inactions or services.


 


F.                  
Survival. The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 9 shall
remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person’s services
under or in connection with, this Agreement. Each Indemnified Person is an intended third-party beneficiary of this Section 9,
and has the right to enforce the provisions of Section 9 as if he/she/it was a party to this Agreement.


 


		10.	Limitation of Dawson’s Liability to the Company. 



 


Dawson and the Company
further agree that neither Dawson nor any of its affiliates or any of their respective officers, directors, controlling persons
(within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents shall have any
liability to the Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the
Company (whether direct or indirect, in contract or tort, for an act of negligence or otherwise) for any losses, fees, damages,
liabilities, costs, expenses or equitable relief arising out of or relating to this Agreement or the Services rendered hereunder,
except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to
act by Dawson and that are finally judicially determined to have resulted solely from the gross negligence or willful misconduct
of Dawson.


 


		11.	Limitation of Engagement to the Company. 



 


The Company acknowledges
that Dawson has been retained only by the Company, that Dawson is providing services hereunder as an independent contractor (and
not in any fiduciary or agency capacity) and that the Company’s engagement of Dawson is not deemed to be on behalf of, and
is not intended to confer rights upon, any shareholder, owner or partner of the Company or any other person not a party hereto
as against Dawson or any of its affiliates, or any of its or their respective officers, directors, controlling persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents. Unless otherwise expressly
agreed in writing by Dawson, no one other than the Company is authorized to rely upon any statement or conduct of Dawson in connection
with this Agreement. The Company acknowledges that any recommendation or advice, written or oral, given by Dawson to the Company
in connection with Dawson’s engagement is intended solely for the benefit and use of the Company’s management and directors
in considering a possible Offering, and any such recommendation or advice is not on behalf of, and shall not confer any rights
or remedies upon, any other person or be used or relied upon for any other purpose. Dawson shall not have the authority to make
any commitment binding on the Company. The Company, in its sole discretion, shall have the right to reject any investor introduced
to it by Dawson. If any purchase agreement and/or related transaction documents are entered into between the Company and the investors
in the Offering, Dawson will be entitled to rely on the representations, warranties, agreements and covenants of the Company contained
in any such purchase agreement and related transaction documents as if such representations, warranties, agreements and covenants
were made directly to Dawson by the Company.


 


 


 






    	 	19	 



     


    

 


		12.	Amendments and Waivers. 



 


No supplement, modification
or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party
to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless
of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.


 


		13.	Confidentiality.



 


In the event of the
consummation or public announcement of any Offering, Dawson shall have the right to disclose its participation in such Offering,
including, without limitation, the placement at its cost of “tombstone” advertisements in financial and other newspapers
and journals. Dawson agrees not to use any confidential information concerning the Company provided to Dawson by the Company for
any purposes other than those contemplated under this Agreement.


 


		14.	Headings. 



 


The headings of the
various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this
Agreement.


 


		15.	Counterparts. 



 


This Agreement may
be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original and all such counterparts shall together constitute one and the same instrument.


 


		16.	Severability. 



 


In case any provision
contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein will not in any way be affected or impaired thereby.


 


		17.	Use of Information. 



 


The Company will furnish
Dawson such written information as Dawson reasonably requests in connection with the performance of its services hereunder. The
Company understands, acknowledges and agrees that, in performing its services hereunder, Dawson will use and rely entirely upon
such information as well as publicly available information regarding the Company and other potential parties to an Offering and
that Dawson does not assume responsibility for independent verification of the accuracy or completeness of any information, whether
publicly available or otherwise furnished to it, concerning the Company or otherwise relevant to an Offering, including, without
limitation, any financial information, forecasts or projections considered by Dawson in connection with the provision of its services.


 


		18.	Absence of Fiduciary Relationship. 



 


The Company acknowledges
and agrees that: (a) the Placement Agent has been retained solely to act as Placement Agent in connection with the sale of the
Securities and that no fiduciary, advisory or agency relationship between the Company and the Placement Agent has been created
in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Placement Agent has advised or
is advising the Company on other matters and that the Placement Agent owes the Company only those duties and obligations set forth
in this Agreement; (b) the Unit Purchase Price and other terms of the Securities set forth in this Agreement were established by
the Company following discussions and arms-length negotiations with the Placement Agent 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;
(c) it has been advised that the Placement Agent and its affiliates are engaged in a broad range of transactions that may involve
interests that differ from those of the Company and that the Placement Agent has no obligation to disclose such interest and transactions
to the Company by virtue of any fiduciary, advisory or agency relationship; and (d) it has been advised that the Placement Agent
is acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of the Placement Agent, and not
on behalf of the Company and that the Placement Agents may have interests that differ from those of the Company. The Company waives
to the full extent permitted by applicable law any claims it may have against the Placement Agent arising from an alleged breach
of fiduciary duty in connection with the Offering.


 


 


 






    	 	20	 



     


    

 


		19.	Survival Of Indemnities, Representations, Warranties, Etc. 



 


The respective indemnities,
covenants, agreements, representations, warranties and other statements of the Company and Placement Agent, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Placement Agent, the Company, the Purchasers or any person controlling any of them and shall survive
delivery of and payment for the Securities. Notwithstanding any termination of this Agreement, including without limitation any
termination pursuant to Section 5, the payment, reimbursement, indemnity, contribution and advancement agreements contained in
Sections 2, 9, 10, and 11, respectively, and the Company’s covenants, representations, and warranties set forth in this Agreement
shall not terminate and shall remain in full force and effect at all times. The indemnity and contribution provisions contained
in Section 9 and the covenants, warranties and representations of the Company contained in this Agreement shall remain operative
and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of
any Placement Agent, any person who controls any Placement Agent within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act or any affiliate of any Placement Agent, or by or on behalf of the Company, its directors or
officers or any person who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and (iii) the issuance and delivery of the Securities.


 


		20.	Governing Law. 



 


This Agreement shall
be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully
performed therein. Any disputes that arise under this Agreement, even after the termination of this Agreement, will be heard only
in the state or federal courts located in the City of New York, State of New York. The parties hereto expressly agree to submit
themselves to the jurisdiction of the foregoing courts in the City of New York, State of New York. The parties hereto expressly
waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City and State of New
York.


 


		21.	Notices. 



 


All communications
hereunder shall be in writing and shall be mailed or hand delivered and confirmed to the parties hereto as follows:


 


If to the Company:


 


Sonoma Pharmaceuticals, Inc.


1129 N. McDowell Blvd.


Petaluma, CA 94954


Attention: Chief Executive Officer


 


With a copy, which shall not constitute Notice, to


 


Amy Trombly


1314 Main Street, Suite 102


Louisville, CO 80027


 


If to the Placement Agent:


 


Dawson James Securities, Inc.


1 North Federal Highway – 5th Floor


Boca Raton, FL 33432


Attention: Chief Executive Officer


 


Any party hereto may change the address for receipt of communications
by giving written notice to the others. 


 


 


 






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		22.	Miscellaneous. 



 


This Agreement shall
not be modified or amended except in writing signed by Dawson and the Company. This Agreement constitutes the entire agreement
of Dawson and the Company, and supersedes any prior agreements, with respect to the subject matter hereof. If any provision of
this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in
any other respect, and the remainder of this Agreement shall remain in full force and effect. This Agreement may be executed in
counterparts (including facsimile or .pdf counterparts), each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.


 


		23.	Successors. 



 


This Agreement will
inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 9 hereof, and to their respective successors, and personal representative, and, except
as set forth in Section 9 of this Agreement, no other person will have any right or obligation hereunder. 


 


		24.	Partial Unenforceability. 



 


The invalidity or unenforceability
of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section,
paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid
or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it
valid and enforceable.


 


[SIGNATURE PAGE TO FOLLOW]


 


 


 






    	 	22	 



     


    

 


In acknowledgment that
the foregoing correctly sets forth the understanding reached by Dawson and the Company, and intending to be legally bound, please
sign in the space provided below, whereupon this letter shall constitute a binding Agreement as of the date executed.


 


Very truly yours,


 


SONOMA PHARMACEUTICALS, INC.


 


By:__________________________  


Name: Jim Schutz


Title: Chief Executive Officer


 


Agreed and accepted as of the date first above written.


 


DAWSON JAMES SECURITIES, INC.


 


By:___________________________


  Name: Robert D. Keyser, Jr.


  Title:  Chief Executive
Officer


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	 	23	 



     


    

 


 


SCHEDULE I


 


Issuer General Use Free Writing Prospectuses


 


 


None.


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






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