Blueprint





 


 











Form of



 



Q BIOMED INC.


 



[*] Share of Common Stock



and



One Warrant to Purchase [*] Share of Common Stock


 



PLACEMENT AGENT AGREEMENT

 





__________,
2018


 


Roth
Capital Partners, LLC


888 San
Clemente Drive


Newport
Beach, CA 92660


 


Ladies
and Gentlemen:

 


Subject
to the terms and conditions herein (this “Agreement”), Q BioMed
Inc., a Nevada corporation (the “Company”), hereby agrees
to sell registered securities of the Company, consisting of up to
[*] shares (the “Shares”) of the
Company’s common stock, $0.001 par value per share (the
“Common
Stock”) and common stock purchase warrants to purchase
up to an aggregate of [*] shares of Common Stock with an exercise
price of $[*] per share (the “Warrants”, as exercised,
the “Warrant
Shares”) directly to various investors (each, an
“Investor” and,
collectively, the “Investors”) through Roth
Capital Partners, LLC, as lead placement agent (the
“Placement
Agent”). The Warrants and the Shares are collectively
referred to herein as the “Primary Securities” and
the Primary Securities, together with the Warrant Shares, are
collectively referred to herein as the “Securities”. The
documents executed and delivered by the Company and the Investors
in connection with the Offering (as defined below), including,
without limitation, a securities purchase agreement (the
“Purchase
Agreement”) and the Warrants shall be collectively
referred to herein as the “Transaction Documents.”
The purchase price to the Investors for each Share and accompanying
Warrant is $[*]. The Placement Agent may retain other brokers or
dealers to act as sub-agents or selected-dealers on its behalf in
connection with the Offering.

 


The
Company hereby confirms its agreement with the Placement Agent as
follows:

 



Section
1.              
Agreement to Act as Placement Agent.

 


(a)              
On the basis of the representations, warranties and agreements of
the Company herein contained, and subject to all the terms and
conditions of this Agreement, the Placement Agent shall be the lead
Placement Agent in connection with the offering and sale by the
Company of the Securities pursuant to the Company’s
registration statement on Form S-1 (File No. 333-222008) (as
amended or supplemented from time to time and including the
exhibits thereto at any given time, the “Registration Statement”),
with the terms of such offering (the “Offering”) to be subject
to market conditions and negotiations between the Company, the
Placement Agent and the prospective Investors. The Placement Agent
will act on a reasonable best efforts basis and the Company agrees
and acknowledges that there is no guarantee of the successful
placement of the Securities, or any portion thereof, in the
prospective Offering. Under no circumstances will the Placement
Agent or any of its “Affiliates” (as defined below) be
obligated to underwrite or purchase any of the Securities for its
own account or otherwise provide any financing. The Placement Agent
shall act solely as the Company’s agent and not as principal.
The Placement Agent shall have no authority to bind the Company
with respect to any prospective offer to purchase Securities and
the Company shall have the sole right to accept offers to purchase
Securities and may reject any such offer, in whole or in part.
Subject to the terms and conditions hereof, payment of the purchase
price for, and delivery of, the Securities shall be made at one or
more closings (each a “Closing” and the date on
which each Closing occurs, a “Closing Date”). Subject
only with to Section 2 and Schedule I of the Engagement Letter
entered into by the Company and the Placement Agent on or about
November 14, 2017 and attached hereto as Exhibit I, as maximum
compensation for services rendered, on each Closing Date, the
Company shall pay to the Placement Agent the fees and expenses set
forth below:

 


(i)                
A cash fee equal to eight percent (8.0%) of the gross proceeds
received by the Company from the sale of the Securities at the
Closing.

 


(ii)              A
warrant to purchase that number of Common Stock equal to six
percent (6%) of the Common Stock issued on such Closing Date
(excluding shares of Common Stock issuable upon the exercise of any
Warrants issued to Investors).

 


(iii)               The
Company also agrees to reimburse Placement Agent’s reasonable
out of pocket expenses payable immediately upon a Closing of the
Offering Out of pocket expenses and legal expenses exceeding an
aggregate of $50,000 shall require prior approval by the
Company,

 


(b)              
The term of the Placement Agent’s exclusive engagement will
be until the completion of the Offering. The Placement Agent shall
be entitled to collect all fees under this Agreement earned through
termination. In addition to the foregoing, the Company hereby
grants to the Placement Agent the exclusive right (such right, the
“Right of First
Refusal”), for the twelve (12) month period commencing
on the date hereof, to provide investment banking services to the
Company on an exclusive basis in all matters involving the
Company’s equity securities or other instruments that may at
any time be convertible into, exchangeable for, or otherwise
entitle the holder thereof to receive, directly or indirectly,
equity securities of the Company, for which investment banking
services are sought by the Company (a “Future Offering”). In
connection with the Right of First Refusal, investment banking
services shall include, without limitation, (i) acting as lead,
book-running manager for any underwritten public offering; (ii)
acting as exclusive placement agent or financial advisor in
connection with any private offering of securities of the Company;
and (iii) acting as financial advisor in connection with any sale
or other transfer by the Company, directly or indirectly, of a
majority or controlling portion of its capital stock or assets to
another entity, any purchase or other transfer by another entity,
directly or indirectly, of a majority or controlling portion of the
capital stock or assets of the Company, and any merger or
consolidation of the Company with another entity. At any time
during such period that the Company contemplates conducting a
Future Offering, the Company shall deliver to the Placement Agent a
written notice (the “Notice”) stating its
intention to conduct the Future Offering, the material terms and
conditions thereof, including the amount to be raised and the type
of security to be issued and the compensation requested by the
competing broker-dealer firm if any, and an offer to the Placement
Agent to manage the Future Offering pursuant to this Right of First
Refusal. At any time within 30 days after receipt of the Notice,
the Placement Agent may, by giving written notice to the Company,
elect to exercise this Right of First Refusal. The failure of the
Placement Agent to exercise this Right of First Refusal within such
30 day period will be deemed a rejection of the offer solely with
respect to the applicable Future Offering. Any decision by the
Placement Agent to act in any such capacity shall be contained in
separate agreements, which agreements would contain, among other
matters, provisions for customary fees for transactions of similar
size and nature, as may be mutually agreed upon, and
indemnification of the Placement Agent and its Affiliates and shall
be subject to general market conditions. If the Placement Agent
declines to exercise the Right of First Refusal (which it may do in
its sole and absolute discretion), the Company shall have the right
to retain any other person or persons to provide such services on
terms and conditions which are not materially more favorable to
such other person or persons than the terms declined by the
Placement Agent. 

 


(d)              
Nothing in this Agreement shall be construed to limit the ability
of the Placement Agent or its Affiliates to pursue, investigate,
analyze, invest in, or engage in investment banking, financial
advisory or any other business relationship with Persons (as
defined below) other than the Company. As used herein (i)
“Persons” means an individual or corporation,
partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of
any kind and (ii) “Affiliate” means any Person that,
directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as
such terms are used in and construed under Rule 405 under the
Securities Act of 1933, as amended (the “Securities
Act”).


 

1

 



 







 





 



Section
2.              
Representations, Warranties and Covenants of the Company.
The Company hereby represents, warrants and covenants to the
Placement Agent as of the date hereof, and as of each Closing Date,
as follows:

 


(a)              
Securities Law
Filings. The Company has filed with the Securities and
Exchange Commission (the “Commission”) the
Registration Statement under the Securities Act, which was
originally filed on December 12, 2017, as amended on December 22,
2017, and January [*], 2018, for the registration under the
Securities Act of the Securities, and was declared effective by the
Commission on January [*], 2018. Following the effectiveness of the
Registration Statement and the determination of pricing among the
Company and the prospective Investors introduced to the Company by
Placement Agent, the Company will file with the Commission pursuant
to Rules 430A and 424(b) under the Securities Act, and the rules
and regulations (the “Rules and Regulations”)
of the Commission promulgated thereunder, a final prospectus
relating to the placement of the Securities, their respective
pricings and the plan of distribution thereof and will advise the
Placement Agent of all further information (financial and other)
with respect to the Company required to be set forth therein. Such
prospectus in the form in which it appears in the Registration
Statement is hereinafter called the “Preliminary Prospectus”;
and the amended or supplemented form of prospectus, in the form in
which it will be filed with the Commission pursuant to Rules 430A
and/or 424(b) is hereinafter called the “Final Prospectus”; and
the Preliminary Prospectus and Final Prospectus are collectively,
the “Prospectus”. Any
reference in this Agreement to the Registration Statement, the
Preliminary Prospectus or the Final Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein (the “Incorporated Documents”),
if any, which were or are filed under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), at any
given time, as the case may be; and any reference in this Agreement
to the terms “amend,” “amendment” or
“supplement” with respect to the Registration
Statement, the Preliminary Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under
the Exchange Act after the date of this Agreement, or the issue
date of the Preliminary Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. All
references in this Agreement to financial statements and schedules
and other information which is “contained,”
“included,” “described,”
“referenced,” “set forth” or
“stated” in the Registration Statement, the Preliminary
Prospectus or the Final Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial
statements and schedules and other information which is or is
deemed to be incorporated by reference in the Registration
Statement, the Preliminary Prospectus or the Final Prospectus, as
the case may be. The Company has not received any notice that the
Commission has issued or intends to issue a stop order suspending
the effectiveness of the Registration Statement, the Preliminary
Prospectus or the Final Prospectus or intends to commence a
proceeding for any such purpose.

 


(b)              
Assurances. The
Registration Statement, as amended, (and any further documents to
be filed with the Commission) contains all exhibits and schedules
as required by the Securities Act. Each of the Registration
Statement and any post-effective amendment thereto, at the time it
became effective, complied in all material respects with the
Securities Act and the applicable Rules and Regulations and did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading. The Registration Statement
and the Final Prospectus, each as of its respective date, comply or
will comply in all material respects with the Securities Act and
the applicable Rules and Regulations. Each of the Registration
Statement and the Final Prospectus, as amended or supplemented, did
not and will not contain as of the date thereof any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the
Exchange Act and the applicable rules and regulations promulgated
thereunder, and none of such documents, when they were filed with
the Commission, contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the
statements therein (with respect to Incorporated Documents
incorporated by reference in the Final Prospectus), in light of the
circumstances under which they were made not misleading. No
post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent,
individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby
that (x) have not been filed as required pursuant to the Securities
Act or (y) will not be filed within the requisite time period.
There are no contracts or other documents required to be described
in the Prospectus, or to be filed as exhibits or schedules to the
Registration Statement, which have not been described or filed as
required.

 


(c)              
Offering Materials.
Neither the Company nor any of its directors and officers has
distributed and none of them will distribute, prior to each Closing
Date, any offering material in connection with the offering and
sale of the Securities other than the Preliminary Prospectus, the
Final Prospectus, the Registration Statement, copies of the
documents incorporated by reference therein and any other materials
permitted by the Securities Act.

 


(d)              
Subsidiaries. All
of the direct and indirect subsidiaries of the Company (the
“Subsidiaries”) are set
forth in the Incorporated Documents. The Company owns, directly or
indirectly, all of the capital stock or other equity interests of
each Subsidiary free and clear of any liens, charges, security
interests, encumbrances, rights of first refusal, preemptive rights
or other restrictions (collectively, “Liens”), and all of the
issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.

 


(e)              
Organization and
Qualification. The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on
its business as currently conducted, and as described in the
Registration Statement and Prospectus. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of
its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in
a Material Adverse Effect (as defined below), and no an action,
claim, suit, investigation or proceeding (including, without
limitation, an informal investigation or partial proceeding, such
as a deposition), whether commenced or threatened
(“Proceeding”) has been
instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and
authority or qualification. As used in this Agreement,
“Material Adverse
Effect” means any material adverse effect on (i) the
business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects
of the Company or any Subsidiary, individually or taken as a whole,
(ii) the transactions contemplated hereby or in any of the other
Transaction Documents or any other agreements or instruments to be
entered into in connection herewith or therewith, or the legality,
validity or enforceability of any such agreement, or (iii) the
authority or ability of the Company or any of its Subsidiaries to
perform any of their respective obligations under this Agreement or
any of the Transaction Documents. 

 


(f)               
Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement, the Transaction Documents, and the
Prospectus and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of each of this Agreement
and the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby and under
the Prospectus have been duly authorized by all necessary action on
the part of the Company and no further action is required by the
Company, the Company’s Board of Directors (the
“Board of
Directors”) or the Company’s stockholders in
connection therewith other than in connection with the Required
Approvals (as defined below). This Agreement has been duly executed
by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.

 

2


 



 







 





 

 


(g)              
No Conflicts. The
execution, delivery and performance by the Company of this
Agreement, the Transaction Documents, and the transactions
contemplated pursuant to the Prospectus, the issuance and sale of
the Securities and the consummation by it of the transactions
contemplated hereby and thereby to which it is a party do not and
will not (i) conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the
properties or assets of the Company or any Subsidiary, or give to
others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse
Effect.

 


(h)              
Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of this Agreement and the transactions contemplated
pursuant to the Transaction Documents and the Prospectus, other
than: (i) the filing with the Commission of the Final Prospectus,
(ii) if any are required, application(s) to any of the following
markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the Nasdaq Capital Market; the
Nasdaq Global Market; the Nasdaq Global Select Market; the New York
Stock Exchange; the NYSE MKT, any level of the OTC Markets operated
by OTC Markets Group, Inc. or the OTC Bulletin Board (or any
successors to any of the foregoing) (the “Trading Market”) for the
listing or quotation of the Shares and the Warrant Shares for
trading thereon in the time and manner required thereby, and (iii)
such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities
or “blue sky” laws and the rules of the Financial
Industry Regulatory Authority, Inc. (“FINRA”) (collectively,
the “Required
Approvals”). All Required Approvals have been or will
be obtained or effected on or prior to the Closing Date, and the
Company is not aware of any facts or circumstances which might
prevent the Company from obtaining and Required
Approvals.

 


 (i)                
Issuance of the
Securities; Registration. The Primary Securities are duly
authorized and, when issued and paid for in accordance with the
Prospectus, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company.
The Warrant Shares, when issued in accordance with the terms of the
Warrants will be validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company. The Company has
reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to the Final
Prospectus, including the Shares and the Warrant
Shares.

 


(j)                
Capitalization. The
capitalization of the Company, including the authorized and
outstanding securities, including any securities exercising or
convertible into shares of Common Stock, is as set forth in the
Prospectus. The Company has not issued any capital stock or other
securities since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock
options under the Company’s stock option plans, the issuance
of shares of Common Stock and options to purchase shares of Common
Stock to employees and consultants pursuant to the Company’s
employee stock purchase plans, pursuant to the conversion and/or
exercise of securities of the Company or the Subsidiaries which
would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock
(“Common Stock
Equivalents”) outstanding as of the date of the most
recently filed periodic report under the Exchange Act. No Person
has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by this Agreement, the Transaction
Documents and the Prospectus. Except as a result of the purchase
and sale of the Securities, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares
of Common Stock of the capital stock of any Subsidiary, or
contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock Equivalents or
capital stock of any Subsidiary. The issuance and sale of the
Securities will not obligate the Company or any Subsidiary to issue
shares of Common Stock or other securities to any Person (other
than the Investors) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or
reset price under any of such securities. There are no outstanding
securities or instruments of the Company of any Subsidiary that
contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to redeem a
security of the Company or such Subsidiary. The Company does not
have any stock appreciation rights of “phantom stock”
plans or agreements or any similar plan or agreement. All of the
outstanding shares of capital stock of the Company are duly
authorized. All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the
issuance and sale of the Securities. There are no stockholders
agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders. The SEC Reports (as
defined below) contain correct and complete copies of the
Company’s certificate of incorporation, as amended and as in
effect on the date hereof, and the Company’s bylaws, as
amended and as in effect on the date hereof, and the terms of all
Common Stock Equivalents, and the material rights of the holders
thereof in respect thereto.

 


(k)              
SEC Reports; Financial
Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein,
together with the Registration Statement and the Prospectus, 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. The Company has delivered or has made available to the
Placement Agent true, correct and complete copies of each of the
SEC Reports not available on the EDGAR system. As of their
respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act,
as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports (including,
without limitation, any notes or any letter of the independent
accountants of the Company with respect thereto) (the
“Financial
Statements”) 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. The 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 and except that
unaudited Financial Statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit
adjustments. The reserves, if any, established by the Company or
the lack of reserves, if applicable, are reasonable based upon
facts and circumstances known by the Company on the date hereof and
there are no loss contingencies that are required to be accrued by
the Statement of Financial Accounting Standard No. 5 of the
Financial Accounting Standards Board which are not provided for by
the Company in its Financial Statements or otherwise. The Company
is not currently contemplating to amend or restate any of the
Financial Statements, nor is the Company currently aware of facts
or circumstances which would require the Company to amend or
restate any of the Financial Statements, in each case, in order for
any of the Financial Statements to be in compliance with GAAP and
the rules and regulations of the Commission. The Company has not
been informed by its independent accountants that they recommend
that the Company amend or restate any of the Financial Statements
or that there is any need for the Company to amend or restate any
of the Financial Statements.

 


(l)                
Material Changes;
Undisclosed Events, Liabilities or Developments. Since the
date of the latest audited Financial Statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC
Report filed prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Financial
Statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued
any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. The Company does
not have pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Securities
contemplated by the Transaction Documents and Prospectus or
disclosed in the Prospectus, no event, liability, fact,
circumstance, occurrence or development has occurred or exists or
is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses,
prospects, properties, operations, assets or financial condition,
including any transaction, arrangement, or other relationship
between the Company or any of its Subsidiaries and an
unconsolidated or other off balance sheet entity that would be
required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that
has not been publicly disclosed at least 1 trading day of the
Common Stock on the Trading Market prior to the date that this
representation is made.

 


(m)            
Litigation. There
is no action, suit, inquiry, arbitration, notice of violation,
proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or
enforceability of any of this Agreement, the Transaction Documents
and the transactions contemplated pursuant to the Prospectus or the
Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect. No director, officer or employee of the Company or any of
its Subsidiaries has willfully violated 18 U.S.C. §1519 or
engaged in spoliation in reasonable anticipation of litigation.
Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to
the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission or any other U.S. or foreign
securities regulator involving the Company or any current or former
director or officer of the Company. The Commission has not issued
any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under
the Exchange Act or the Securities Act. After reasonable inquiry of
its employees, the Company is not aware of any fact which might
result in or form the basis for any such Action, suit, arbitration,
investigation, inquiry or other proceeding. Neither the Company nor
any of its Subsidiaries is subject to any order, writ, judgment,
injunction, decree, determination or award of any governmental
agency or regulatory authority.

 

 

3

 



 







 









(n)              
Labor Relations. No
material labor dispute exists or, to the knowledge of the Company,
is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse
Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such
employee’s relationship with the Company or such Subsidiary,
and neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its
Subsidiaries believe that their relationships with their employees
are good. No executive officer of the Company or any Subsidiary, to
the knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the
continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 


(o)              
Compliance. Neither
the Company nor any Subsidiary: (i) is in default under or in
violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, its certificate of
incorporation, bylaws or other governing documents, or any
indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any judgment, decree or order
of any court, arbitrator or governmental authority or (iii) is or
has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each
case (under this clause (iii)) as could not have or reasonably be
expected to result in a Material Adverse Effect. Except as set
forth in the SEC Reports, without limiting the generality of the
foregoing, the Company is not in violation of any of the rules,
regulations or requirements of the Trading Market and has no
knowledge of any facts or circumstances that could reasonably lead
to delisting, loss of quotation, or suspension of the Common Stock
by the Trading Market in the foreseeable future. Except as set
forth in the SEC Reports, during the two years prior to the date
hereof, (i) the Common Stock has been listed or designated for
quotation on the Trading Market, (ii) trading in or quotation of
the Common Stock has not been suspended by the Commission or the
Trading Market and (iii) the Company has received no communication,
written or oral, from the Commission or the Trading Market
regarding the suspension, loss of quotation, or delisting of the
Common Stock from the Trading Market. There is no agreement,
commitment, judgment, injunction, order or decree binding upon the
Company or any of its Subsidiaries or to which the Company or any
of its Subsidiaries is a party which has or would reasonably be
expected to have the effect of prohibiting or materially impairing
any business practice of the Company or any of its Subsidiaries,
any acquisition of property by the Company or any of its
Subsidiaries or the conduct of business by the Company or any of
its Subsidiaries as currently conducted other than such effects,
individually or in the aggregate, which have not had and would not
reasonably be expected to have a Material Adverse Effect on the
Company or any of its Subsidiaries.

 


(p)              
Environmental Laws.
The Company and its Subsidiaries (i) are in compliance with all
federal, state, local and foreign laws relating to pollution or
protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively,
“Hazardous
Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials, as well as all authorizations, codes, decrees, demands,
or demand letters, injunctions, judgments, licenses, notices or
notice letters, orders, permits, plans or regulations, issued,
entered, promulgated or approved thereunder (“Environmental Laws”);
(ii) have received all permits licenses or other approvals required
of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) are in compliance with all terms
and conditions of any such permit, license or approval where in
each clause (i), (ii) and (iii), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.

 


(q)              
Regulatory Permits.
The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct
their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be
expected to result in a Material Adverse Effect
(“Material
Permits”), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation
or modification of any Material Permit, or any notice of adverse
finding, warning letter, or other correspondence or notice from any
governmental authority alleging or asserting noncompliance with any
Material Permits.

 


(r)               
Title to Assets.
The Company does not own any real property. Any real property and
facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with
which the Company and the Subsidiaries are in
compliance.

 


(s)               
Patents and
Trademarks. The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property
rights and similar rights (collectively, the “Intellectual Property
Rights”) necessary or material to conduct their
respective businesses as now conducted and presently proposed to be
conducted. None of, and neither the Company nor any Subsidiary has
received a notice (written or otherwise) that any of, the
Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement, except as
would not have a Material Adverse Effect. Neither the Company nor
any Subsidiary has received, since the date of the latest audited
Financial Statements included within the SEC Reports, a notice
(written or otherwise) of a claim or otherwise has any knowledge
that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as would not have a Material Adverse
Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property
Rights. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties.

 


(t)                
Insurance. The
Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged, including, but not
limited to, directors and officers insurance coverage. Neither the
Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a
significant increase in cost.

 


(u)              
Transactions With
Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the
employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money
from or lending of money to or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of
the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of
$120,000 other than for: (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the
Company.

 


(v)              
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 and sale of Securities, as
supplemented by all information concerning the Company’s
directors, officers and principal shareholders as described in the
Registration Statement and Prospectus as well as in the Lock-Up
Agreements (as defined below), 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 inaccurate or incorrect
in any material respect.


 

 4

 



 







 





 

 


(w)            
Sarbanes-Oxley; Internal
Accounting Controls. To the extent disclosed in its SEC
Reports, the Company and the Subsidiaries are in compliance with
any and all applicable requirements of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated thereunder or
implementing the provisions thereof (the “Sarbanes-Oxley Act”), and
any and all applicable rules and regulations promulgated by the
Commission thereunder that are effective as of the date hereof and
as of the Closing Date. The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission’s rules and forms. The Company’s certifying
officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures of the Company and the
Subsidiaries as of the end of the period covered by the
Company’s most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control
over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially
affected, or is reasonably likely to materially affect, the
internal control over financial reporting of the Company and its
Subsidiaries.

 


(x)              
Board of Directors.
The qualifications of the persons serving as members of the Board
of Directors and the overall composition of the Board of Directors
comply with the Exchange Act and the Sarbanes-Oxley Act and the
listing rules, if any, of the Trading Market.

 


(y)              
Certain Fees.
Except as set forth in the Prospectus, no brokerage or
finder’s fees or commissions are or will be payable by the
Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by this Agreement, the
Transaction Documents and the Prospectus. The Investors shall have
no obligation with respect to any fees or with respect to any
claims made by or on behalf of other Persons for fees of a type
contemplated in this section that may be due in connection with the
transactions contemplated by this Agreement, the Transaction
Documents and the Prospectus.

 


(z)              
Investment Company.
The Company is not, and is not an Affiliate of, and immediately
after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not
become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.

 


(aa)           
Registration
Rights. No Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary.

 


(bb)          
Listing and Maintenance
Requirements. The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such
registration. Except as disclosed in the SEC Reports, the Company
has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has
been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such
Trading Market. Except as disclosed in the SEC Reports, the Company
is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such
listing and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company
is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with
such electronic transfer.

 


(cc)           
Application of Takeover
Protections. The Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable to the Investors as a result of the Investors and the
Company fulfilling their obligations or exercising their rights
under this Agreement and the Transaction Documents and the
transactions contemplated pursuant to the Prospectus, including
without limitation as a result of the Company’s issuance of
the Securities and the Investors’ ownership of the
Securities.

 


(dd)          
Disclosure. Except
with respect to the material terms and conditions of the
transactions contemplated by this Agreement, the Transaction
Documents and the Prospectus, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the
Investors or their agents or counsel with any information that it
believes constitutes or might constitute material, non-public
information which is not otherwise disclosed in the Registration
Statement and Prospectus. The Company understands and confirms that
the Investors will rely on the foregoing representation in
effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the
Investors regarding the Company and, its Subsidiaries, their
respective businesses and the transactions contemplated hereby and
in the Transaction Documents, including the Disclosure Schedules to
this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading. The
press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made and when made, not misleading.

 


(ee)           
No Integrated
Offering. Neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would
cause this Offering to be integrated with prior offerings by the
Company for purposes of any applicable shareholder approval
provisions of any Trading Market on which any of the securities of
the Company are listed or designated.

 


(ff)             
Solvency. Based on
the consolidated financial condition of the Company as of each
Closing Date, after giving effect to the receipt by the Company of
the proceeds from the sale of the Securities hereunder, (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from each
Closing Date. The SEC Reports sets forth as of the date hereof all
outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, including any debt securities, notes, credit
agreements, credit facilities or other agreements, documents or
instruments evidencing Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is
or may become bound or have any commitments. For purposes of this
Agreement: (x) “Indebtedness” of any
Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (including, without
limitation, “capital leases” in accordance with GAAP)
(other than trade payables entered into in the ordinary course of
business consistent with past practice), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds
and other similar instruments, (D) all obligations evidenced by
notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with
respect to any property or assets acquired with the proceeds of
such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in
connection with GAAP, consistently applied for the periods covered
thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in any
property or assets (including accounts and contract rights) owned
by any Person, even though the Person which owns such assets or
property has not assumed or become liable for the payment of such
indebtedness, and (H) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (A) through (G) above; and (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend or other obligation of another Person
if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid
or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.
Neither the Company nor any Subsidiary is in violation under the
terms of, or in default with respect to any
Indebtedness.

 

5

 



 







 








 


(gg)          
Tax Status. The
Company and its Subsidiaries (i) has made or filed all United
States federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has paid all taxes and
other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim. The provisions for taxes
payable, if any, shown on the Financial Statements 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. No issues have been raised (and are currently
pending) by any taxing authority in connection with any of the
returns or taxes asserted as due from the Company or its
Subsidiaries, and no waivers of statutes of limitation with respect
to the returns or collection of taxes have been given by or
requested from the Company or its Subsidiaries. The Company is not
operated in such a manner as to qualify as a passive foreign
investment company, as defined in Section 1297 of the Internal
Revenue Code of 1986, as amended (the “Code”). The net operating
loss carryforwards (“NOLs”) for United States
federal income tax purposes of the consolidated group of which the
Company is the common parent, if any, shall not be adversely
affected by the transactions contemplated hereby. The transactions
contemplated hereby do not constitute an “ownership
change” within the meaning of Section 382 of the Code,
thereby preserving the Company’s ability to utilize such
NOLs.

 


(hh)          
Foreign Corrupt
Practices. Neither the Company nor any Subsidiary, nor to
the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i)
directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign
or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law,
or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.

 


(ii)             Accountants.
The Company’s accounting firms are set forth in the
Registration Statement and the Prospectus. To the knowledge and
belief of the Company, (i) such accounting firms are registered
public accounting firm as required by the Exchange Act and (ii)
Marcum LLP shall express its
opinion with respect to the Financial Statements to be included in
the Company’s Annual Report for the fiscal year ending
November 30, 2017.

 


(jj)             
Regulation M
Compliance.  The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold,
bid for, purchased, or, paid any compensation for soliciting
purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase
any other securities of the Company, other than, in the case of
clauses (ii) and (iii), compensation paid to the Placement Agent in
connection with the placement of the Securities.

 


(kk)          
Transfer Taxes. On
the Closing Date, all stock transfer or other taxes (other than
income or similar taxes) which are required to be paid in
connection with the issuance, sale and transfer of the Securities
to be sold to each Investor will be, or will have been, fully paid
or provided for by the Company, and all laws imposing such taxes
will be or will have been complied with.

 


(ll)             
Office of Foreign Assets
Control. Neither the Company nor any Subsidiary, to the
Company’s knowledge, any director, officer, agent, employee
or Affiliate of the Company or any Subsidiary is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department.

 


(mm)               U.S.
Real Property Holding Corporation. The Company is not and
has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as
amended, and the Company shall so certify upon Investor’s
request.

 


(nn)          
Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation
by the Board of Governors of the Federal Reserve System (the
“Federal
Reserve”). Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent or more of
the total equity of a bank or any entity that is subject to the
BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve.

 


(oo)          
Illegal or Unauthorized
Payments; Political Contributions. Neither the Company nor
any of its Subsidiaries nor, to the best of the Company’s
knowledge (after reasonable inquiry of its officers and directors),
any of the officers, directors, employees, agents or other
representatives of the Company or any of its Subsidiaries or any
other business entity or enterprise with which the Company or any
Subsidiary is or has been affiliated or associated, has, directly
or indirectly, made or authorized any payment, contribution or gift
of money, property, or services, whether or not in contravention of
applicable law, (i) as a kickback or bribe to any Person or (ii) to
any political organization, or the holder of or any aspirant to any
elective or appointive public office except for personal political
contributions not involving the direct or indirect use of funds of
the Company or any of its Subsidiaries.

 


(pp)          
Money Laundering.
The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the USA Patriot Act of
2001, the Currency and Foreign Transactions Reporting Act of 1970,
as amended, and all other applicable U.S. and non-U.S. anti-money
laundering laws and regulations, including, without limitation, the
laws, regulations and Executive Orders and sanctions programs
administered by the U.S. Office of Foreign Assets Control,
including, but not limited, to (i) Executive Order 13224 of
September 23, 2001 entitled, “Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001));
and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V
(collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.

 


(qq)          
Stock Option Plans.
Each stock option granted by the Company was granted (i) in
accordance with the terms of the applicable stock option plan of
the Company and (ii) with an exercise price at least equal to the
fair market value of the Common Stock on the date such stock option
would be considered granted under GAAP and applicable law. No stock
option granted under the Company’s stock option plan has been
backdated. The Company has not knowingly granted, and there is no
and has been no policy or practice of the Company to knowingly
grant, stock options prior to, or otherwise knowingly coordinate
the grant of stock options with, the release or other public
announcement of material information regarding the Company or its
Subsidiaries or their financial results or prospects.

 


(rr)               No
Disagreements with Accountants and Lawyers. There are no
material disagreements of any kind presently existing, or
reasonably anticipated by the Company to arise, between the Company
and the accountants and lawyers formerly or presently employed by
the Company and the Company is current with respect to any fees
owed to its accountants and lawyers which could affect the
Company’s ability to perform any of its obligations under any
of the Transaction Documents. In addition, on or prior to the date
hereof, the Company had discussions with its accountants about its
Financial Statements previously filed with the Commission. Based on
those discussions, the Company has no reason to believe that it
will need to restate any such Financial Statements or any part
thereof.

 


(ss)               Certificates.
Any certificate signed by an officer of the Company and delivered
to the Placement Agent or to counsel for the Placement
Agent shall be deemed to be a representation and warranty by the
Company to the Placement Agent as to the matters set forth
therein.

 


(tt)               Reliance.
The Company acknowledges that the Placement Agent will rely
upon the accuracy and truthfulness of the foregoing representations
and warranties and hereby consents to such reliance.

 


(uu)               FINRA
Affiliations. There are no affiliations with any FINRA
member firm among the Company’s officers, directors or, to
the knowledge of the Company, any five percent (5%) or greater
stockholder of the Company.

 

6


 



 







 





 

 



Section
3.              
Delivery and Payment. Each Closing shall occur at the
offices of Sichenzia Ross Ference Kesner LLP, 1185 Avenue of the
Americas, 37th Floor, New York,
New York 10036 (or at such other place as shall be agreed upon by
the Placement Agent and the Company) (“Placement Agent
Counsel”). Subject to the terms and conditions hereof,
at each Closing payment of the purchase price for the Securities
sold on such Closing Date shall be made by Federal Funds wire
transfer, against delivery of such Securities, and such Securities
shall be registered in such name or names and shall be in such
denominations, as the Placement Agent may request. Deliveries of
the documents with respect to the purchase of the Securities, if
any, shall be made at the offices of Placement Agent Counsel. All
actions taken at a Closing shall be deemed to have occurred
simultaneously.

 



Section
4.              
Covenants and Agreements of the Company. The Company further
covenants and agrees with the Placement Agent as
follows:

 


(a)              
Registration Statement
Matters. The Company will advise the Placement Agent
promptly after it receives notice thereof of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to any Prospectus has been filed and
will furnish the Placement Agent with copies thereof. The Company
will file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 14 or 15(d) of the Exchange
Act subsequent to the date of any Prospectus and for so long as the
delivery of a prospectus is required in connection with the
Offering. The Company will advise the Placement Agent, promptly
after it receives notice thereof (i) of any receipt of comments of,
or any request by the Commission to amend the Registration
Statement or to amend or supplement any Prospectus or for
additional information, and (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or any order
directed at any Incorporated Document, if any, or any amendment or
supplement thereto or any order preventing or suspending the use of
any Prospectus or any amendment or supplement thereto or any
post-effective amendment to the Registration Statement, of the
suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the institution or threatened
institution of any Proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or a Prospectus or for additional
information. The Company shall use its best efforts to prevent the
issuance of any such stop order or prevention or suspension of such
use.  If the Commission shall enter any such stop order or
order or notice of prevention or suspension at any time, the
Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment, or will file a new
registration statement and use its best efforts to have such new
registration statement declared effective as soon as
practicable.  Additionally, the Company agrees that it shall
comply with the provisions of Rules 424(b), 430A, 430B and
430C, as applicable, under the Securities Act, including with
respect to the timely filing of documents thereunder, and will use
its reasonable efforts to confirm that any filings made by the
Company under such Rule 424(b) are received in a timely
manner by the Commission.

 


(b)              
Blue Sky
Compliance. The Company will cooperate with the Placement
Agent and the Investors in endeavoring to qualify the Securities
for sale under the securities laws of such jurisdictions (United
States and foreign) as the Placement Agent or the Investors may
reasonably request and will make such applications, file such
documents, and furnish such information as may be reasonably
required for that purpose, provided the Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not
now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports
and other documents as are or may be required to continue such
qualifications in effect for so long a period as the Placement
Agent may reasonably request for distribution of the Securities.
The Company will advise the Placement Agent promptly of the
suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading
in any jurisdiction or any initiation or threat of any Proceeding
for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof
at the earliest possible moment.

 


(c)              
Amendments and Supplements
to the Prospectus and Other Matters. The Company will comply
with the Securities Act and the Exchange Act, and the rules and
regulations of the Commission thereunder, so as to permit the
completion of the distribution of the Securities as contemplated in
this Agreement, the Transaction Documents, the Incorporated
Documents and any Prospectus. If during the period in which a
prospectus is required by law to be delivered in connection with
the distribution of Securities contemplated by the Transaction
Documents or the Prospectus (the “Prospectus Delivery
Period”), any event shall occur as a result of which,
in the judgment of the Company or in the opinion of the Placement
Agent or counsel for the Placement Agent, it becomes necessary to
amend or supplement the Incorporated Documents or any Prospectus in
order to make the statements therein, in the light of the
circumstances under which they were made, as the case may be, not
misleading, or if it is necessary at any time to amend or
supplement the Incorporated Documents or any Prospectus or to file
under the Exchange Act any Incorporated Document to comply with any
law, the Company will promptly prepare and file with the
Commission, and furnish at its own expense to the Placement Agent
and to dealers, an appropriate amendment to the Registration
Statement or supplement to the Registration Statement, the
Incorporated Documents or any Prospectus that is necessary in order
to make the statements in the Incorporated Documents and any
Prospectus as so amended or supplemented, in the light of the
circumstances under which they were made, as the case may be, not
misleading, or so that the Registration Statement, the Incorporated
Documents or any Prospectus, as so amended or supplemented, will
comply with law. Before amending the Registration Statement or
supplementing the Incorporated Documents or any Prospectus in
connection with the Offering, the Company will furnish the
Placement Agent with a copy of such proposed amendment or
supplement and will not file any such amendment or supplement to
which the Placement Agent reasonably objects.

 


(d)              
Copies of any Amendments
and Supplements to a Prospectus. The Company will furnish
the Placement Agent, without charge, during the period beginning on
the date hereof and ending on the later of the last Closing Date of
the Offering, as many copies of the Incorporated Documents and any
Prospectus and Free Writing Prospectus (as defined below), and any
amendments and supplements thereto (including any Incorporated
Documents, if any) as the Placement Agent may reasonably
request.

 


(e)              
Free Writing
Prospectus. The Company covenants that it will not, unless
it obtains the prior written consent of the Placement Agent, make
any offer relating to the Securities that would constitute a
“free writing prospectus” (as defined in Rule 405 of
the Securities Act) required to be filed by the Company with the
Commission or retained by the Company under Rule 433 of the
Securities Act (a “Free Writing
Prospectus”). In the event that the Placement Agent
expressly consents in writing to any Free Writing Prospectus (a
“Permitted Free
Writing Prospectus”), the Company covenants that it
shall comply with the requirements of Rule 164 and 433 of the
Securities Act applicable to such Permitted Free Writing
Prospectus, including in respect of timely filing with the
Commission, legending and record keeping. If at any time during the
Prospectus Delivery Period there occurred or occurs an event or
development the result of which a Free Writing Prospectus
conflicted or would conflict with the information contained in the
Registration Statement or any Prospectus or included or would
include, when taken together with the Final Prospectus and
Incorporated Documents, an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, the Company
will promptly notify the Placement Agent and will promptly amend or
supplement, at its own expense, such Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or
omission.

 


(f)               
Lock-Up. The
Company hereby agrees that, without the prior written consent of
the Placement Agent, it will not, during the period from the date
hereof until the date that is ninety (90) days after the date of
the Final Prospectus (the “Lock-Up Period”), (i)
offer, pledge, issue, sell, contract to sell, purchase, contract to
purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any Common Stock
Equivalents; or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or
otherwise; or (iii) file any registration statement with the
Commission relating to the offering of any shares of Common Stock
or any Common Stock Equivalents (other than a registration
statement for Common Stock and/or Common Stock Equivalents of the
Company that will not be declared effective by the Commission prior
to the expiration of the Lock-Up Period (each, a
“Subsequent Offering
Registration Statement”, and any such offering
pursuant thereto, each, a “Subsequent Offering”)).
The restrictions contained in the preceding sentence shall not
apply to (1) the Securities to be sold hereunder, (2) the issuance
of Common Stock upon the exercise of options or warrants or the
conversion or exercise of Common Stock Equivalents disclosed as
outstanding in the Registration Statement (excluding exhibits
thereto) or Prospectus, (3) the issuance of employee stock options
not exercisable during the Lock-Up Period and the grant of
restricted stock awards or restricted stock units or shares of
Common Stock pursuant to equity incentive plans described in the
Registration Statement (excluding exhibits thereto) or the Final
Prospectus or (4) any Subsequent Offering of shares of Common Stock
and/or Common Stock Equivalents that is consummated pursuant to a
Subsequent Offering Registration Statement after the expiration of
the Lock-Up Period. The Company agrees not to accelerate the
vesting of any option or warrant or the lapse of any repurchase
right prior to the expiration of the Lock-Up Period except with
respect to any employees, officers or directors of the Company that
have executed a Lock-Up Agreement. As used herein
“Business
Day” means any day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are
authorized or required by law to remain closed.

 

7

 



 







 








 


(g)              
Transfer Agent. The
Company will maintain, at its expense, a registrar and transfer
agent for the Common Stock.

 


(h)              
Trading Market. The
Company shall use its reasonable best efforts to obtain approval,
to the extent necessary, to include the Shares and the Warrant
Shares on the Trading Market.

 


(i)               Earnings
Statement. As soon as practicable and in accordance with
applicable requirements under the Securities Act, but in any event
not later than 18 months after the last Closing Date, the Company
will make generally available to its security holders and to the
Placement Agent an earnings statement, covering a period of at
least 12 consecutive months beginning after the last Closing Date,
that satisfies the provisions of Section 11(a) and Rule 158 under
the Securities Act.

 


(j)                Use
of Proceeds. The Company shall apply the net proceeds from
the sale of the Securities to be sold by it hereunder for the
purposes set forth in the Registration Statement and the Final
Prospectus under the heading “Use of
Proceeds”.

 


(k)              
Periodic Reporting
Obligations. During the Prospectus Delivery Period, the
Company will duly file, on a timely basis, with the Commission and
the Trading Market all reports and documents required to be filed
under the Exchange Act within the time periods and in the manner
required by the Exchange Act.

 


(l)                
Additional
Documents. The
Company will enter into any subscription, purchase or other
customary agreements as the Placement Agent or the Investors deem
necessary or appropriate to consummate the Offering, all of which
will be in form and substance reasonably acceptable to the
Placement Agent and the Investors. The Company agrees that the
Placement Agent may rely upon, and each is a third-party
beneficiary of, the representations and warranties, and applicable
covenants, set forth in the Transaction Documents and any other
such purchase, subscription or other agreement with Investors in
the Offering.

 


(m)              
No Manipulation of
Price.  The
Company will not take, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.

 


(n)              Acknowledgment.
The Company acknowledges that any advice given by the Placement
Agent to the Company is solely for the benefit and use of the Board
of Directors of the Company and may not be used, reproduced,
disseminated, quoted or referred to, without the Placement
Agent’s prior written consent.

 



Section
5.              
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 2 hereof as well as any
representations of the Company in the Transaction Documents, in
each case as of the date hereof and as of each Closing Date as
though then made, to the timely performance by each of the Company
of its covenants and other obligations hereunder and under the
Transaction Documents on and as of such dates, and to each of the
following additional conditions:

 


(a)              
Accountants’ Comfort
Letter. On the date hereof, the Placement Agent shall have
received, and the Company shall have caused to be delivered to the
Placement Agent, a letter from Marcum LLP (the independent
registered public accounting firm of the Company), addressed to the
Placement Agent, dated as of the date hereof, in form and substance
satisfactory to the Placement Agent. The letter shall not disclose
any change in the condition (financial or other), earnings,
operations, business or prospects of the Company from that set
forth in the Incorporated Documents or the applicable Prospectus,
which, in the Placement Agent’s sole judgment, is material
and adverse and that makes it, in the Placement Agent’s sole
judgment, impracticable or inadvisable to proceed with the Offering
of the Securities as contemplated by such Prospectus.

 


(b)              
Transaction
Documents. The Company and each Subsidiary (as the case may
be) shall have duly executed and delivered to the Investors each of
the Transaction Documents to which it is a party, including the
Purchase Agreement and the applicable number of Warrants issuable
to each Investor pursuant to the terms thereunder.

 


(c)              
Compliance with
Registration Requirements; No Stop Order; No Objection from the
FINRA. The Final Prospectus (in accordance with Rule 424(b))
and any Permitted Free Writing Prospectus, if any, shall have been
duly filed with the Commission, as appropriate; no stop order
suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no Proceeding for that
purpose shall have been initiated or threatened by the Commission;
no order preventing or suspending the use of any Prospectus or
Permitted Free Writing Prospectus shall have been issued and no
proceeding for that purpose shall have been initiated or threatened
by the Commission; no order having the effect of ceasing or
suspending the distribution of the Securities or any other
securities of the Company shall have been issued by any securities
commission, securities regulatory authority or stock exchange and
no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company, contemplated by any
securities commission, securities regulatory authority or stock
exchange; all requests for additional information on the part of
the Commission shall have been complied with; and FINRA shall have
raised no objection to the fairness and reasonableness of the
placement terms and arrangements.

 


(d)              
Corporate
Proceedings. All corporate proceedings and other legal
matters in connection with this Agreement, the Registration
Statement and each Prospectus, and the registration, sale and
delivery of the Securities, shall have been completed or resolved
in a manner reasonably satisfactory to the Placement Agent’s
counsel, and such counsel shall have been furnished with such
papers and information as it may reasonably have requested to
enable such counsel to pass upon the matters referred to in this
Section 5.

 


(e)              
No Material Adverse
Effect. Subsequent to the execution and delivery of this
Agreement and prior to each Closing Date, in the Placement
Agent’s sole judgment after consultation with the Company,
there shall not have occurred any Material Adverse
Effect.

 


(f)               
No Materially Misleading
Fact. The Placement Agent shall not have reasonably
determined, and advised the Company, that the Registration
Statement, any Prospectus, or any amendment thereof or supplement
thereto, or any Free Writing Prospectus, contains an untrue
statement of fact which, in the reasonable opinion of the Placement
Agent, is material, or omits to state a fact which, in the
reasonable opinion of the Placement Agent, is material and is
required to be stated therein or necessary to make the statements
therein not misleading.


 

 8

 



 







 





 

 


(g)              
Opinion of Counsel.
The Placement Agent shall have received on each Closing Date the
favorable opinion of Ortoli Rosenstadt LLP, US legal counsel to the
Company, dated as of such Closing Date, including, without
limitation, a negative assurance letter addressed to the Placement
Agent, and in form and substance satisfactory to the Placement
Agent. On or before each Closing Date there shall have been
furnished to the Placement Agent the negative assurance letter of
Placement Agent Counsel, dated the Closing Date and addressed to
the Placement Agent, in form and substance reasonably satisfactory
to Placement Agent.

 


(h)              
Good Standing. The
Placement Agent shall have received a certificate evidencing the
formation and good standing of the Company from the Secretary of
State of Nevada as of a date within ten (10) days of each Closing
Date.

 


(i)                
Certified Charter.
The Placement Agent shall have received a certified copy of the
Certificate of Incorporation of the Company as certified by the
Nevada Secretary of State within ten (10) days of each Closing
Date.

 


(j)                
Secretary’s
Certificate. The Placement Agent shall have received on each
Closing Date a certificate of the Company, dated as of such Closing
Date, signed by the Secretary of the Company or such other officer
of the Company serving in such capacity, as to (i) the resolutions
of the Board of Directors approving the Offering and issuance and
pricing of the Securities, in a form reasonable acceptable to the
Placement Agent, (ii) the incumbency of the officers of the Company
executing this Agreement and the Transaction Documents, (iii) the
Certificate of Incorporation of the Company, and (iv) the Bylaws of
the Company, each as in effect at the Closing.

 


(k)              
Officers’
Certificate. The Placement Agent shall have received on each
Closing Date a certificate of the Company, dated as of such Closing
Date, signed by the Chief Executive Officer and Chief Financial
Officer of the Company, to the effect that, and the Placement Agent
shall be satisfied that, the signers of such certificate have
reviewed the Registration Statement, the Incorporated Documents,
the Prospectus, and this Agreement and to the further effect
that:

 


(i)                
The representations and warranties of the Company in this Agreement
and in the Transaction Documents are true and correct, as if made
on and as of such Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such Closing
Date;

 


(ii)              
No stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or are pending
or, to the Company’s knowledge, threatened under the
Securities Act; no order having the effect of ceasing or suspending
the distribution of the Securities or any other securities of the
Company has been issued by any securities commission, securities
regulatory authority or stock exchange in the United States and no
proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, contemplated by any securities
commission, securities regulatory authority or stock exchange in
the United States;

 


(iii)            
When the Registration Statement became effective, at the time of
sale, and at all times subsequent thereto up to the delivery of
such certificate, the Registration Statement and the Incorporated
Documents, if any, when such documents became effective or were
filed with the Commission, contained all material information
required to be included therein by the Securities Act and the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and in all material
respects conformed to the requirements of the Securities Act and
the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and the Registration
Statement and the Incorporated Documents, if any, did not and do
not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided, however, that
the preceding representations and warranties contained in this
paragraph (iii) shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in
writing to the Company by the Placement Agent expressly for use
therein) and, since the effective date of the Registration
Statement, there has occurred no event required by the Securities
Act and the rules and regulations of the Commission thereunder to
be set forth in the Incorporated Documents which has not been so
set forth; and

 


(iv)             
Subsequent to the respective dates as of which information is given
in the Registration Statement, the Incorporated Documents and any
Prospectus, there has not been: (a) any Material Adverse Effect;
(b) any transaction that is material to the Company and the
Subsidiaries taken as a whole, except transactions entered into in
the ordinary course of business; (c) any obligation, direct or
contingent, that is material to the Company and the Subsidiaries
taken as a whole, incurred by the Company or any Subsidiary, except
obligations incurred in the ordinary course of business; (d) any
material change in the capital stock (except changes thereto
resulting from the exercise of outstanding stock options or
warrants) or outstanding indebtedness of the Company or any
Subsidiary; (e) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company; or (f) any loss
or damage (whether or not insured) to the property of the Company
or any Subsidiary which has been sustained or will have been
sustained which has a Material Adverse Effect.

 


(l)                Outstanding
Shares. The Placement Agent shall have received a letter
from the Company’s transfer agent certifying the number of
shares of Common Stock outstanding on the trading day immediately
prior to each Closing Date.

 


(m)              
Bring-down Comfort
Letter.  On
each Closing Date, the Placement Agent shall have received
from Marcum LLP a letter dated as of such Closing Date, in form and
substance satisfactory to the Placement Agent, to the effect
that they reaffirm the statements made in the letter furnished
pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of
procedures shall be no more than three Business Days prior
to such Closing Date.

 


(n)              
Stock Exchange
Listing. The Common Stock shall be registered under the
Exchange Act and shall be listed on the Trading Market, and the
Company shall not have taken any action designed to terminate, or
likely to have the effect of terminating, the registration of
the Common Stock under the Exchange Act or delisting or suspending
from trading the Common Stock from the Trading Market, nor, except
as disclosed in the SEC Reports as of the date hereof, shall the
Company have received any information suggesting that the
Commission or the Trading Market is contemplating terminating such
registration or listing. The Shares and the Warrant Shares shall be
approved for listing on the Trading Market, subject to official
notice of issuance.

 


(o)              
Lock-Ups. On or
before the date hereof, the Placement Agent shall have received
duly executed lock-up agreement, substantially in the form of
Exhibit A hereto
(each a “Lock-Up
Agreement”), from each of the parties specified in
Schedule
1.

 


(p)              
Transfer Agent Issuance
Instructions. The Company shall have issued irrevocable
instructions to its transfer agent with respect to the issuance of
the Shares to the Investors on such Closing Date, in a form
reasonable acceptable to the Placement Agent, in accordance with
the terms of the Purchase Agreement.

 


(q)             Transfer
Agent Lock-Up Instructions. On or before the first Closing
Date, the Company shall have issued irrevocable instructions to its
transfer agent, in a form reasonable acceptable to the Placement
Agent, to stop transfer of any shares of equity securities of the
Company in accordance with the various Lock-Up
Agreements.

 


(r)               
Additional
Documents. On or before each Closing Date, the Placement
Agent and counsel for the Placement Agent shall have received such
information and documents as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein and in the Transaction Documents,
or in order to evidence the accuracy of any of the representations
and warranties, or the satisfaction of any of the conditions or
agreements, herein contained, including, without limitation, any
and all Required Approvals.

 



Section
6.              
Payment of Expenses. The Company agrees to pay all costs,
fees and expenses incurred by the Company in connection with the
performance of its obligations hereunder and in connection with the
transactions contemplated hereby and in the Transaction Documents,
including, without limitation: (i) all expenses incident to the
issuance, delivery and qualification of the Securities (including
all printing and engraving costs); (ii) all fees and expenses of
the registrar and transfer agent of the Common Stock; (iii) all
necessary issue, transfer and other stamp taxes in connection with
the issuance and sale of the Securities; (iv) all fees and
expenses of the Company’s counsel, independent public or
certified public accountants and other advisors; (v) all costs and
expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and
certificates of experts), the Preliminary Prospectus and Final
Prospectus, and all amendments and supplements thereto, and this
Agreement; (vi) all filing fees, reasonable attorneys’ fees
and expenses incurred by the Company or the Placement Agent in
connection with qualifying or registering (or obtaining exemptions
from the qualification or registration of) all or any part of the
Securities for offer and sale under the state securities or blue
sky laws or the securities laws of any other country, and, if
requested by the Placement Agent, preparing and printing a
“Blue Sky Survey,” an “International Blue Sky
Survey” or other memorandum, and any supplements thereto,
advising the Placement Agent of such qualifications, registrations
and exemptions; (vii) the filing fees incident to the review and
approval by FINRA of the Placement Agent’s participation in
the offering and distribution of the Securities; (viii) the fees
and expenses associated with including the Shares and the Warrant
Shares on the Trading Market; (ix) all costs and expenses incident
to the travel and accommodation of the Company’s and the
Placement Agent’s employees on the “roadshow,” if
any; and (x) all other fees, costs and expenses referred to in Part
II of the Registration Statement.

 

 

9


 



 







 





 



Section
7.              
Indemnification and Contribution.

 


(a) The
Company agrees to indemnify and hold harmless the Placement Agent,
its Affiliates and each person controlling the 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, 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 one counsel for all
Indemnified Persons, except as otherwise expressly provided herein)
(collectively, the “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, (i) caused by, or arising out of or in
connection with, any untrue statement or alleged untrue statement
of a material fact contained in any Incorporated Document or by any
omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (other
than untrue statements or alleged untrue statements in, or
omissions or alleged omissions from, information relating to an
Indemnified Person furnished in writing by or on behalf of such
Indemnified Person expressly for use in the Incorporated Documents)
or (ii) otherwise arising out of or in connection with advice or
services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement and the Transaction Documents, the
transactions contemplated thereby or any Indemnified Person’s
actions or inactions in connection with any such advice, services
or transactions; provided,
however, that, in the case of clause (ii) only, the Company
shall not be responsible for any Liabilities or Expenses of any
Indemnified Person that are finally judicially determined to have
resulted solely from such Indemnified Person’s (x) gross
negligence or willful misconduct in connection with any of the
advice, actions, inactions or services referred to above or (y) use
of any offering materials or information concerning the Company in
connection with the offer or sale of the Securities in the Offering
which were not authorized for such use by the Company and which use
constitutes gross negligence or willful misconduct. The Company
also agrees to reimburse each Indemnified Person for all Expenses
as they are incurred in connection with enforcing such Indemnified
Person’s rights under this Agreement.


   


(b)       Upon
receipt by an Indemnified Person of actual notice of an Action
against such Indemnified Person with respect to which indemnity may
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 liability which the Company may have on
account of this indemnity or otherwise to such Indemnified Person,
except to the extent the Company shall have been prejudiced by such
failure. The Company shall, if requested by the Placement Agent,
assume the defense of any such Action including the employment of
counsel reasonably satisfactory to the Placement Agent, which
counsel may also be counsel to the Company. 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 or (ii) the named parties to any such Action
(including any impeded parties) include such Indemnified Person and
the Company, and such Indemnified Person shall have been advised in
the reasonable opinion of counsel that there is an actual conflict
of interest that prevents the counsel selected by the Company from
representing both the Company (or another client of such counsel)
and any Indemnified Person; provided that the Company shall not in
such event be responsible hereunder for the fees and expenses of
more than one firm of separate counsel for all Indemnified Persons
in connection with any Action or related Actions, in addition to
any local counsel. 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 (which shall not be unreasonably withheld), settle,
compromise or consent to the entry of any judgment in or otherwise
seek to terminate any pending or threatened Action in respect of
which indemnification or contribution may be sought hereunder
(whether or not such Indemnified Person is a party thereto) unless
such settlement, compromise, consent or termination includes an
unconditional release of each Indemnified Person from all
Liabilities arising out of such Action for which indemnification or
contribution may be sought hereunder. The indemnification required
hereby shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and
payable.


 


(c)       In
the event that the foregoing indemnity is unavailable to an
Indemnified Person other than in accordance with this Agreement,
the Company 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 and the Transaction Documents, 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 fees actually
received by the Placement Agent pursuant to this Agreement. 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 and in the Transaction
Documents shall be deemed to be in the same proportion as (a) the
total value paid or contemplated to be paid to or received or
contemplated to be received by the Company in the transaction or
transactions that are within the scope of this Agreement and the
Transaction Documents, whether or not any such transaction is
consummated, bears to (b) the fees 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, as amended, shall be entitled to
contribution from a party who was not guilty of fraudulent
misrepresentation.


 


(d)       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 and the Transaction Documents, the
transactions contemplated thereby or any Indemnified Person’s
actions or inactions in connection with any such advice, services
or transactions except for Liabilities (and related Expenses) of
the Company that are finally judicially determined to have resulted
solely from such Indemnified Person’s gross negligence or
willful misconduct in connection with any such advice, actions,
inactions or services.


 


(e)       The
reimbursement, indemnity and contribution obligations of the
Company set forth herein shall apply to any modification of this
Agreement and 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.


  



Section
8.              
Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and
other statements of the Company or any person controlling the
Company, of its officers, and of the Placement Agent set forth in
or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the
Placement Agent, the Company, or any of its or their partners,
officers or directors or any controlling person, as the case may
be, and will survive delivery of and payment for the Securities
sold hereunder and any termination of this Agreement. A successor
to a Placement Agent, or to the Company, its directors or officers
or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement
agreements contained in this Agreement.

 



Section
9.              
Termination of this Agreement.

 


(a)              
The Placement Agent shall have the right to terminate this
Agreement by giving notice to the Company as hereinafter specified
at any time at or prior to the Closing Date, if in the discretion
of the Placement Agent, (i) there has occurred any material adverse
change in the securities markets or any event, act or occurrence
that has materially disrupted, or in the opinion of the Placement
Agent, will in the future materially disrupt, the securities
markets or there shall be such a material adverse change in general
financial, political or economic conditions or the effect of
international conditions on the financial markets in the United
States is such as to make it, in the judgment of the Placement
Agent, inadvisable or impracticable to market the Securities or
enforce contracts for the sale of the Securities, (ii) trading in
the Common Stock shall have been suspended by the Commission or the
Trading Market, or trading in securities generally on the OTC
Markets, the Nasdaq Stock Market, the NYSE or the NYSE MKT shall
have been suspended, (iii) minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the OTC Markets, the Nasdaq Stock
Market, the NYSE or NYSE MKT, by such exchange or by order of the
Commission or any other governmental authority having jurisdiction,
(iv) a banking moratorium shall have been declared by federal or
state authorities, (v) there shall have occurred any attack on,
outbreak or escalation of hostilities or act of terrorism involving
the United States, any declaration by the United States of a
national emergency or war, any substantial change or development
involving a prospective substantial change in United States or
international political, financial or economic conditions or any
other calamity or crisis, (vi) the Company suffers any loss by
strike, fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, (vii) the Company is in
material breach of any of its representations, warranties or
covenants under this Agreement, including if any condition
specified in Section 5 is not satisfied when and as required to be
satisfied, or (viii) in the judgment of the Placement Agent, there
has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the
Registration Statement or the Prospectus, any material adverse
change in the assets, properties, condition, financial or
otherwise, or in the results of operations, business affairs or
business prospects of the Company and its Subsidiaries considered
as a whole, whether or not arising in the ordinary course of
business. If the Placement Agent elects to terminate this Agreement
as provided in this Section, the Company shall be notified promptly
by the Placement Agent by telephone, confirmed by
letter.

 

 

10


 



 







 





 


(b)              
Notwithstanding anything to the contrary contained herein, the
provisions concerning confidentiality, indemnification and
contribution contained herein and the Company’s obligations
contained in the indemnification provisions, including any
obligations under Section 6 (Payment of Expenses), Section 7
(Indemnification and Contribution) and Section 8 (Representations
and Indemnities to Survive Delivery), will survive any expiration
or termination of this Agreement, and the Company’s
obligation to pay fees actually earned and payable and to reimburse
expenses actually incurred and reimbursable pursuant to Section 1
hereof and which are permitted to be reimbursed under FINRA Rule
5110(f)(2)(D), will survive any expiration or termination of this
Agreement.

 


(c)              
The terms of the Right of First Refusal shall survive the
termination of this Agreement unless this Agreement is terminated
by the Company for cause in compliance with FINRA Rule
5110(f)(2)(D)(ii), which includes the Placement Agent’s
material failure to provide the services contemplated in this
Agreement, and the Company’s exercise of this right for
termination for cause eliminates any obligations with respect to
the Right of First Refusal.

 



Section
10.          
Notices. All communications hereunder shall be in writing
and shall be mailed, hand or electronically delivered and confirmed
to the parties hereto as follows:

 


If to
the Placement Agent, to the address set forth above, attention:
Jared Schramm, Facsimile: (949) 720-7215


 



With a copy to:


 


Sichenzia
Ross Ference Kesner LLP


1185
Avenue of the Americas, 37th Floor


New
York, NY 10036


Facsimile:
(212) 930-9725


Attention:
Gregory Sichenzia


 


If to
the Company:


Q
Biomed Inc.



c/o Ortoli Rosenstadt LLP



501 Madison Avenue – 14th Floor



New York, NY 10022


Facsimile:
(212) 826-9307


Attention:
William S.
Rosenstadt


 


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

 



Section
11.          
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 7 hereof, and to their respective successors, and
personal representative, and no other person will have any right or
obligation hereunder.

 



Section
12.          
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.

 



Section
13.          
Governing Law Provisions. This Agreement shall be deemed to
have been made and delivered in New York City and both this
Agreement and the transactions contemplated hereby shall be
governed as to validity, interpretation, construction, effect and
in all other respects by the internal laws of the State of New
York, without regard to the conflict of laws principles thereof.
Each of the Placement Agent and the Company: (i) agrees that any
legal suit, action or proceeding arising out of or relating to this
Agreement and/or the transactions contemplated hereby shall be
instituted exclusively in New York Supreme Court, County of New
York, or in the United States District Court for the Southern
District of New York, (ii) waives any objection which it may have
or hereafter to the venue of any such suit, action or proceeding,
and (iii) irrevocably consents to the jurisdiction of the New York
Supreme Court, County of New York, and the United States District
Court for the Southern District of New York in any such suit,
action or proceeding. Each of the Placement Agent and the Company
further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding
in the New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York and
agrees that service of process upon the Company mailed by certified
mail to the Company’s address shall be deemed in every
respect effective service of process upon the Company, in any such
suit, action or proceeding, and service of process upon the
Placement Agent mailed by certified mail to the Placement
Agent’s address shall be deemed in every respect effective
service process upon the Placement Agent, in any such suit, action
or proceeding. Notwithstanding any provision of this Agreement to
the contrary, the Company agrees that neither the Placement Agent
nor its Affiliates, and the respective officers, directors,
employees, agents and representatives of the Placement Agent, its
Affiliates and each other person, if any, controlling the Placement
Agent or any of its Affiliates, shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement and transaction
described herein except for any such liability for losses, claims,
damages or liabilities incurred by us that are finally judicially
determined to have resulted from the bad faith or gross negligence
of such individuals or entities. If either party shall commence an
action or proceeding to enforce any provision of this Agreement,
then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorney’s
fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or
proceeding.

 



Section
14.          
Absence of Fiduciary Relationship. The Company acknowledges
and agrees that: (a) the Placement Agent has been retained solely
to act as the 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; (b) the price and other
terms of the Securities set forth in this Agreement, the Final
Prospectus, and the Transaction Documents were established by the
Placement Agent and the Investors following discussions and
arm’s-length negotiations 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 does not have any 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.

 



Section
15.          
General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof, except for the engagement agreement entered into by and
between the Company and the Placement Agent, dated as of November
14, 2017, as amended, which shall survive the execution of this
Agreement. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in
writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit. 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. Section
headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this
Agreement.

 


[The
remainder of this page has been intentionally left
blank.]


 


11




  




 








 






 


If the
foregoing is in accordance with your understanding of our
agreement, please sign below whereupon this instrument, along with
all counterparts hereof, shall become a binding agreement in
accordance with its terms. 

 


	
 

	

Very
truly yours,


	
 

	
 


	
 

	


Q BIOMED INC.,


	
 

	

a
Nevada corporation


	
 

	
 


	
 

	

By:


	
 

	

Name:Title:







 

 


The
foregoing Placement Agency Agreement is hereby confirmed and
accepted as of the date first above written.

 


	


ROTH CAPITAL PARTNERS, LLC

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	

By:

	
 

	
 

	
 


	
 

	

Name:

	
 

	
 


	
 

	

Title:

	
 

	
 







 

 12

 




 








 






 

 



EXHIBIT A



 



Form of Lock-Up Agreement


 


_______,
2018


 


Roth
Capital Partners, LLC


57 W.
57th St.,
18th
Floor


New
York, NY 10019



 



As Placement Agent


 


Ladies
and Gentlemen:


 


This
Lock-Up Agreement is being delivered to you in connection with the
engagement by Q BioMed Inc., a Nevada corporation (the
“Company”) of Roth Capital
Partners, LLC, as the Company’s lead Placement Agent (the
“Placement
Agent,”) with respect to the proposed public offering
of securities of the Company (the “Offering”), including
shares of common stock, par value $ $0.001 per share, of the
Company (the “Common
Stock”). Capitalized terms used and not otherwise
defined herein shall have the meanings given them in the Engagement
Agreement, as may be amended from time to time, between the Company
and Placement Agent (the “Engagement
Agreement”).


 


In
order to induce you to act as placement agent to the Offering, the
undersigned agrees that, for a period (the “Lock-Up Period”)
beginning on the date hereof and ending on, and including, the date
that is ninety (90) days after the date of the final prospectus
supplement relating to the Offering, the undersigned will not,
without the prior written consent of the Placement Agent,
(i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise
dispose of or agree to dispose of, directly or indirectly, or file
(or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the “Commission”) in respect
of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder
(the “Exchange
Act”) with respect to, any Common Stock or any other
securities of the Company that are substantially similar to Common
Stock, or any securities convertible into or exchangeable or
exercisable for, or any warrants or other rights to purchase, the
foregoing, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or
any securities convertible into or exchangeable or exercisable for,
or any warrants or other rights to purchase, the foregoing, whether
any such transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise or
(iii) publicly announce an intention to effect any transaction
specified in clause (i) or (ii).


 


The
foregoing paragraph shall not apply to (a) the registration of the
offer and sale of securities in the Offering and the sale of the
securities to investors introduced by the Placement Agent in the
Offering, (b) bona fide gifts, provided the recipient thereof
agrees in writing with the Placement Agent to be bound by the terms
of this Lock-Up Agreement, (c) dispositions to any trust for the
direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in
writing with the Placement Agent to be bound by the terms of this
Lock-Up Agreement, (d) transfers of Common Stock or securities
convertible into Common Stock on death by will or intestacy, (e)
sales or transfers of Common Stock solely in connection with the
“cashless” exercise of Company stock options
outstanding on the date hereof for the purpose of exercising such
stock options (provided that any remaining Common Stock received
upon such exercise will be subject to the restrictions provided for
in this Lock-Up Agreement) or (f) sales or transfers of Common
Stock or securities convertible into Common Stock pursuant to a
sales plan entered into prior to the date hereof pursuant to
Rule 10b5-1 under the Exchange Act, a copy of which has been
provided to the Placement Agent. In addition, the restrictions sets
forth herein shall not prevent the undersigned from entering into a
sales plan pursuant to Rule 10b5-1 under the Exchange Act
after the date hereof, provided that (i) a copy
of such plan is provided to the Placement Agent promptly upon
entering into the same and (ii) no sales or transfers may be
made under such plan until the Lock-Up Period ends or this Lock-Up
Agreement is terminated in accordance with its terms. For purposes
of this paragraph, “immediate family” shall mean the
undersigned and the spouse, any lineal descendent, father, mother,
brother or sister of the undersigned.


 


In
addition, the undersigned hereby waives any rights the undersigned
may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering.
The undersigned further agrees that, for the Lock-Up Period, the
undersigned will not, without the prior written consent of the
Placement Agent, make any demand for, or exercise any right with
respect to, the registration of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock,
or warrants or other rights to purchase Common Stock or any such
securities.


 


The
undersigned hereby confirms that the undersigned has not, directly
or indirectly, taken, and hereby covenants that the undersigned
will not, directly or indirectly, take, any action designed, or
which has constituted or will constitute or might reasonably be
expected to cause or result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of shares of Common Stock.


 


This
Lock-Up Agreement shall be construed and enforced in accordance
with the laws of the State of New York without regard to the
principles of conflict of laws.


 


If
(i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration
statement filed with the Commission with respect to the Offering is
withdrawn, or (iii) if the closing of the Offering does not occur
prior to ninety (90) days from the date of this Lock-Up Agreement,
this Lock-Up Agreement shall be immediately terminated and of no
further force and effect.



 



[signature page follows]



 


 


13



 


 


 


 


 


 


 


 


 


 


 


 


 




 








 






 


  


	
 

	

Very
truly yours,


	
 

	
 


	
 

	
 


	
 

	

(Name -
Please Print)


	
 

	
 


	
 

	
 


	
 

	

(Signature)


	
 

	
 


	
 

	
 


	
 

	

(Name
of Signatory, in the case of entities - Please Print)


	
 

	
 


	
 

	
 


	
 

	

(Title
of Signatory, in the case of entities - Please Print)







 


	
 

	

Address:

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 







 


 

 


 


 


 


 


 


 


 


 


 


[Signature
Page – Lock-Up Agreement]


 


14




 


 




 








 






 



 



SCHEDULE I


 



List of officers, directors and stockholders executing lock-up
agreements:


 


 


15