inuv_ex101





 







Exhibit 10.1

 



20,000,000 Shares

 



Inuvo, Inc.

 



Common Stock

 



FORM OF UNDERWRITING AGREEMENT

 


July
23, 2020

 


A.G.P./Alliance
Global Partners


As
Representative of the several Underwriters named on Schedule 1
attached hereto


590
Madison Avenue


New
York, NY 10022


 


Ladies
and Gentlemen:


 


Inuvo,
Inc., a Nevada corporation (the “Company”), proposes,
subject to the terms and conditions contained herein, to sell to
you and the other underwriters named on Schedule I to this
Agreement (the “Underwriters”), for whom
you are acting as Representative (the “Representative”), an
aggregate of 20,000,000 shares (the “Firm Shares”) of the
Company’s common stock, $0.001 par value per share (the
“Common
Stock”). The respective amounts of the Firm Shares to
be purchased by each of the several Underwriters are set forth
opposite their names on Schedule I hereto. In addition, the Company
proposes to grant to the Underwriters an option to purchase up to
an additional 1,500,000 shares (the “Company Option Shares”)
of Common Stock from the Company for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The
Firm Shares and the Company Option Shares are collectively called
the “Shares.”


 


The Company has prepared and filed in conformity
with the requirements of the Securities Act of 1933, as amended
(the “Securities
Act”), and the published
rules and regulations thereunder (the “Rules”)
adopted by the Securities and Exchange Commission (the
“Commission”),
a registration statement on Form S-3 (No. 333-239147),
including a base prospectus (the “Base
Prospectus”) relating to
common stock, preferred stock, warrants and/or units of the Company
that may be sold from time to time by the Company in accordance
with Rule 415 of the Securities Act, and such amendments
thereof as may have been required to the date of this Agreement.
Copies of such Registration Statement (as defined below) (including
all amendments thereof and all documents deemed incorporated by
reference therein) and of the related Base Prospectus have
heretofore been delivered by the Company or are otherwise available
to you.

 


The term “Registration Statement” as
used in this Agreement means the registration statement, including
all exhibits, financial schedules and all documents and information
deemed to be part of the Registration Statement by incorporation by
reference or otherwise, as amended from time to time,
including the information (if any) contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and deemed to be part thereof, in each case, at the Effective
Date (as defined below) pursuant to Rule 430A and 430B of the
Rules.

 


 




 

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If the
Company has filed an abbreviated registration statement to register
additional Shares pursuant to Rule 462(b) under the Rules (the
“462(b) Registration
Statement”), then any reference herein to the
Registration Statement shall also be deemed to include such 462(b)
Registration Statement. The term
“Preliminary Prospectus” means the Base Prospectus,
together with any preliminary prospectus supplement used or filed
with the Commission pursuant to Rule 424 of the Rules,
in the form provided to the Underwriters by the Company for use in
connection with the offering of the Shares. The term “Prospectus” means the Base
Prospectus, any Preliminary Prospectus and any amendments or
further supplements to such prospectus, and including, without
limitation, the final prospectus supplement, filed pursuant to and
within the limits described in Rule 424(b) with the Commission in
connection with the proposed sale of the Shares contemplated by
this Agreement through the date of such final prospectus
supplement. The term “Effective Date” shall mean each
date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective. Unless
otherwise stated herein, any reference herein to the Registration
Statement, any Preliminary Prospectus, the Statutory Prospectus (as
hereinafter defined) and the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein,
including pursuant to Item 12 of Form S-3 under the Securities
Act, which were filed under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”) on or before the
date hereof or are so filed hereafter. Any reference herein to the
terms “amend,” “amendment” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus, the Statutory Prospectus or
the Prospectus shall be deemed to refer to and include any such
document filed or to be filed under the Exchange Act after the date
of the Registration Statement, any such Preliminary Prospectus, the
Statutory Prospectus or Prospectus, as the case may be, and deemed
to be incorporated therein by reference.

 


The
Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the
Statutory Prospectus and the Prospectus, as soon after the
Effective Date and the date of this Agreement as the Representative
deems advisable. The Company hereby confirms that the Underwriters
and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus, and, if applicable, each
Issuer Free Writing Prospectus (as hereinafter defined) and are
authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or
supplements thereto to the Underwriters).

 

1. Sale,
Purchase, Delivery and Payment for the Shares. On the basis of the representations, warranties
and agreements contained in, and subject to the terms and
conditions of, this Agreement:

 

(a) The
Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $0.465 per share,
the number of Firm Shares set forth opposite the name of such
Underwriter under the column “Number of Firm Shares to be
Purchased” on Schedule I to this Agreement, subject to
adjustment in accordance with Section 8 hereof.

 

(b) The
Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Company
Option Shares at a purchase price of $0.465 per share. The number
of Company Option Shares to be purchased by each Underwriter shall
be the same percentage (adjusted by the Representative to eliminate
fractions) of the total number of Company Option Shares to be
purchased by the Underwriters as such Underwriter is purchasing of
the Firm Shares. Such option may be exercised only to cover
over-allotments in the sales of the Firm Shares by the Underwriters
and may be exercised in whole or in part at any time on or before
12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and from time to time
thereafter within 45 days after the date of this Agreement, in each
case upon written, facsimile or electronic notice, or verbal or
telephonic notice confirmed by written, facsimile or electronic
notice, by the Representative to the Company no later than 12:00
noon, New York City time, on the business day before the Firm
Shares Closing Date or at least two business days before the Option
Shares Closing Date (as defined below), as the case may be, setting
forth the number of Company Option Shares to be purchased and the
time and date (if other than the Firm Shares Closing Date) of such
purchase.

 




 

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(c) Payment
of the purchase price for, and delivery of certificates for, the
Firm Shares shall be made at the offices of A.G.P./Alliance Global
Partners, 590 Madison Avenue, New York, NY 10022, at 10:00 a.m.,
New York City time, on the second business day following the date
of this Agreement or at such time on such other date, not later
than ten (10) business days after the date of this Agreement, as
shall be agreed upon by the Company and the Representative (such
time and date of delivery and payment are called the
“Firm Shares Closing
Date”). In addition, in
the event that any or all of the Company Option Shares are
purchased by the Underwriters, payment of the purchase price, and
delivery of the certificates, for such Company Option Shares shall
be made at the above-mentioned offices, or at such other place as
shall be agreed upon by the Representative and the Company, on each
date of delivery as specified in the notice from the Representative
to the Company (such time and date of delivery and payment are
called the “Option Shares Closing
Date”). The Firm Shares
Closing Date and any Option Shares Closing Date are called,
individually, a “Closing Date” and, together, the
“Closing Dates.”

 

(d) Payment
shall be made to the Company by wire transfer of immediately
available funds or by certified or official bank check or checks
payable in New York Clearing House (same day) funds drawn to the
order of the Company against delivery of the Shares for the
respective accounts of the Underwriters.

 

(e) The
Shares shall be registered in such names and shall be in such
denominations as the Representative shall request at least two full
business days before the Firm Shares Closing Date or, in the case
of Company Option Shares, on the day of notice of exercise of the
option as described in Section 1(b), and shall be delivered by or
on behalf of the Company to the Representative through the
facilities of the Depository Trust Company
(“DTC”) for the account of the
Underwriters.

 

2. Representations
and Warranties of the Company.
The Company represents and warrants to each Underwriter as of the
date hereof, as of the Firm Shares Closing Date and as of each
Option Shares Closing Date (if any), as
follows:

 

(a) The
Company was at the time of the filing of the Registration Statement
eligible to use Form S-3. The Company meets the general eligibility
requirements for the use of Form S-3 under the Securities Act and
it meets the transaction requirements with respect to the aggregate
market value of securities being sold pursuant to this offering and
during the twelve (12) months prior to this offering, as set forth
in General Instruction I.B.6 of Form S-3, and has prepared and
filed with the Commission a registration statement under the
Securities Act on Form S-3 (File No. 333-239147) on June 12, 2020,
providing for the offer and sale, from time to time, of up to
$25,000,000 of the Company’s securities (the
“Registration Statement”) which was declared effective
on June 25, 2020. The Company filed with the Commission the
Registration Statement on such Form S-3, including a Base
Prospectus, for registration under the Securities Act of the
offering and sale of the Shares, and the Company has prepared and
used a Preliminary Prospectus in connection with the offer and sale
of the Shares. When the Registration Statement or any amendment
thereof or supplement thereto was or is declared effective and as
of the date of the most recent amendment to the Registration
Statement, it (i) complied or will comply, in all material
respects, with the requirements of the Securities Act and the Rules
and the Exchange Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not contain any
untrue statement of a material fact or omit to state any 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, not misleading. When any Preliminary
Prospectus or Prospectus was first filed with the Commission
(whether filed as part of the Registration Statement or any
amendment thereto or pursuant to Rule 424 of the Rules) and when
any amendment thereof or supplement thereto was first filed with
the Commission, such Preliminary Prospectus or Prospectus, as
amended or supplemented, complied in all material respects with the
applicable provisions of the Securities Act and the Rules and did
not or will not, contain any untrue statement of a material fact or
omit to state any 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, not misleading. If
applicable, each Preliminary Prospectus and the Prospectus
delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to the Electronic Data
Gathering, Analysis and Retrieval system (EDGAR), except to the
extent permitted by Regulation S-T. Notwithstanding the
foregoing, none of the representations and warranties in this
paragraph 2(a) shall apply to statements in, or omissions from, the
Registration Statement, any Preliminary Prospectus or the
Prospectus made in reliance upon, and in conformity with,
information herein or otherwise furnished in writing by the
Representative on behalf of the several Underwriters specifically
for use in the Registration Statement, any Preliminary Prospectus
or the Prospectus. With respect to the preceding sentence, the
Company acknowledges that the only information furnished in writing
by the Representative for use in the Registration Statement, any
Preliminary Prospectus or the Prospectus is the statements
contained in the fifth and eleventh paragraphs under the caption
“Underwriting” in the Prospectus (collectively, the
“Underwriting
Information”).

 




 

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(b) As
of the Applicable Time (as hereinafter defined), neither (i) the
price to the public and the number of shares offered and sold, as
indicated on the cover page of the Prospectus and
the Statutory Prospectus, all considered together (collectively,
the “General Disclosure
Package”), nor
(ii) any individual Issuer Free Writing Prospectus when
considered together with the General Disclosure Package, included,
includes or will include any untrue statement of a material fact or
omitted, omits or will omit to state any 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; provided, however, that this representation
and warranty shall not apply to statements in or omissions in the
General Disclosure Package made in reliance upon and in conformity
with the Underwriting Information.

 


Each
Issuer Free Writing Prospectus (as hereinafter defined), including
any electronic road show (including without limitation any
“bona fide electronic road show” as defined in Rule
433(h)(5) under the Securities Act) (each, a “Road Show”) (i) is
identified in Schedule III hereto and (ii) complied when
issued, and complies, in all material respects with the
requirements of the Securities Act and the Rules and the Exchange
Act and the rules and regulations of the Commission
thereunder.

 


As used
in this Section 2 and elsewhere in this Agreement:

 


“Applicable
Time” means 7:00 a.m. (Eastern time) on the date of this
Underwriting Agreement.

 


“Statutory
Prospectus” as of any time means the Preliminary Prospectus
relating to the Shares that is included in the Registration
Statement immediately prior to the Applicable Time, including
any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof.

 


“Issuer Free
Writing Prospectus” means each “free writing
prospectus” (as defined in Rule 405 of the Rules) prepared by
or on behalf of the Company or used or referred to by the Company
in connection with the offering of the Shares, including, without
limitation, each Road Show.

 

(c) The
Registration Statement is effective under the Securities Act and no
stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of any
Preliminary Prospectus, the Prospectus or any “free writing
prospectus”, as defined in Rule 405 under the Rules, has been
issued by the Commission and no proceedings for that purpose have
been instituted or are threatened under the Securities Act. Any
required filing of any Preliminary Prospectus and/or the Prospectus
and any supplement thereto pursuant to Rule 424(b) of the Rules has
been or will be made in the manner and within the time period
required by such Rule 424(b). Any material required to be filed by
the Company pursuant to Rule 433(d) or Rule 163(b)(2) of the Rules
has been or will be made in the manner and within the time period
required by such Rules.

 

(d) The
documents incorporated by reference in the Registration Statement,
any Preliminary Prospectus and the Prospectus, at the time they
became effective or were filed with the Commission, as the case may
be, complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents contained an 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, and
any further documents so filed and incorporated by reference in the
Registration Statement, any Preliminary Prospectus and the
Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they are made, not
misleading.

 




 

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(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and
sale of the Shares or until any earlier date that the Company
notified or notifies the Representative as described in the next
sentence, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, including any
document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof that has not been superseded
or modified, the Statutory Prospectus or the
Prospectus.

 


If at
any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration
Statement, the Statutory Prospectus or the Prospectus or included
or would include an untrue statement of a material fact or omitted
or would omit 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 prevailing at the subsequent time,
not misleading, the Company has promptly notified or will promptly
notify the Representative and has promptly amended or will promptly
amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement
or omission.

 

(f) The
financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement, the
Statutory Prospectus and Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; and such
financial statements and related schedules and notes thereto, and
the unaudited financial information filed with the Commission as
part of the Registration Statement, have been prepared in
conformity with generally accepted accounting principles,
consistently applied throughout the periods involved. The financial
data included in the Statutory Prospectus and Prospectus present
fairly the information shown therein as at the respective dates and
for the respective periods specified and have been presented on a
basis consistent with the consolidated financial statements set
forth in the Prospectus and other financial
information.

 

(g) Mayer
Hoffman McCann P.C. (the “Auditor”),
whose reports are filed with the Commission as a part of the
Registration Statement, are and, during the periods covered by
their reports, were independent public accountants as required by
the Securities Act and the Rules.

 

(h) The
Company and each of its material subsidiaries, including each
entity (corporation, partnership, joint venture, association or
other business organization) controlled directly or indirectly by
the Company (each, a “subsidiary”),
is duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation or
organization and each such entity has all requisite power and
authority to carry on its business as is currently being conducted
as described in the Statutory Prospectus and the Prospectus, and to
own, lease and operate its properties. All of the issued shares of
capital stock of, or other ownership interests in, each subsidiary
have been duly and validly authorized and issued and are fully paid
and non-assessable and are owned, directly or indirectly, by the
Company, free and clear of any lien, charge, mortgage, pledge,
security interest, claim, limitation on voting rights, equity,
trust or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever. The Company and each of its
material subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in
which the nature of the business conducted by it or location of the
assets or properties owned, leased or licensed by it requires such
qualification, except for such jurisdictions where the failure to
so qualify individually or in the aggregate would not have a
material adverse effect on 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 (a “Material Adverse
Effect”); and to the
Company’s knowledge, no 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.

 




 

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(i) The
Registration Statement initially became effective within three
years of the date hereof. If, immediately prior to the third
anniversary of the initial effective date of the Registration
Statement, any of the Shares remain unsold by the Underwriters, the
Company will, prior to that third anniversary file, if it has not
already done so, a new shelf registration statement relating to the
Shares, in a form satisfactory to the Representative, will use its
best efforts to cause such registration statement to be declared
effective within 180 days after that third anniversary, and
will take all other action necessary or appropriate to permit the
public offering and sale of the Shares to continue as contemplated
in the expired Registration Statement. References herein to the
registration statement relating to the Shares shall include such
new shelf registration statement.

 

(j) The
Company and each of its subsidiaries has all requisite corporate
power and authority, and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and from
all governmental or regulatory bodies or any other person or entity
(collectively, the “Permits”),
to own, lease and license its assets and properties and conduct its
business, all of which are valid and in full force and effect,
except where the lack of such Permits, individually or in the
aggregate, would not have a Material Adverse Effect. The Company
and each of its subsidiaries has fulfilled and performed in all
material respects all of its obligations with respect to such
Permits and no event has occurred that allows, or after notice or
lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the
Company thereunder. Except as may be required under the Securities
Act and state and foreign Blue Sky laws, no other Permits are
required to enter into, deliver and perform this Agreement and to
issue and sell the Shares.

 

(k) (i)
At the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a
bona fide
offer (within the meaning of
Rule 164(h)(2) of the Rules) of the Shares and (ii) as of the
date hereof,
the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 of the
Rules, including (but not limited to) the Company or any other
subsidiary in the preceding three years not having been convicted
of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in
Rule 405 of the Rules.

 

(l) The
Company and each of its subsidiaries owns or possesses legally
enforceable rights to use all patents, patent rights, inventions,
trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, know-how and other
similar rights and proprietary knowledge (collectively,
“Intangibles”)
necessary for the conduct of its business as currently conducted
and which the failure to so own or possess would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor
any of its subsidiaries has received any notice of, or is not aware
of, any infringement of or conflict with asserted rights of others
with respect to any Intangibles, except as would not have or
reasonably be expected to have a Material Adverse
Effect.

 

(m) The
Company and each of its subsidiaries has good and marketable title
in fee simple to all real property, and good and marketable title
to all other property owned by it, in each case free and clear of
all liens, encumbrances, claims, security interests and defects,
except such as do not materially affect the value of such property
and do not materially interfere with the use made or proposed to be
made of such property by the Company and its subsidiaries. All
property held under lease by the Company and its subsidiaries is
held by them under valid, existing and enforceable leases, free and
clear of all liens, encumbrances, claims, security interests and
defects, except such as are not material and do not materially
interfere with the use made or proposed to be made of such property
by the Company and its subsidiaries.

 




 

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(n) Subsequent
to the respective dates as of which information is given in the
Registration Statement, the Statutory Prospectus and the
Prospectus, (i) there has not been any event which would reasonably
be expected to have a Material Adverse Effect; (ii) neither the
Company nor any of its subsidiaries has sustained any loss or
interference with its assets, businesses or properties (whether
owned or leased) from fire, explosion, earthquake, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action,
order or decree which would reasonably be expected to have a
Material Adverse Effect; and (iii) since the date of the latest
balance sheet included in the Registration Statement and the
Prospectus, neither the Company nor its subsidiaries has (A) issued
any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except such liabilities or
obligations incurred in the ordinary course of business, (B)
entered into any transaction not in the ordinary course of business
or (C) declared or paid any dividend or made any distribution on
any shares of its stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any
shares of its capital stock.

 

(o) There
is no document, contract or other agreement required to be
described in the Registration Statement, the Statutory Prospectus
or the Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required by the
Securities Act or Rules. Each description of a contract, document
or other agreement in the Registration Statement, the Statutory
Prospectus or the Prospectus accurately reflects in all respects
the material terms of the underlying contract, document or other
agreement. Each contract, document or other agreement described in
the Registration Statement, the Statutory Prospectus or the
Prospectus or listed in the Exhibits to the Registration Statement
or incorporated by reference is in all material respects in full
force and effect and is valid and enforceable by and against the
Company or its subsidiary, as the case may be, in accordance with
its terms. Neither the Company nor any of its subsidiaries, if a
subsidiary is a party, nor to the Company’s knowledge, any
other party is in default in the observance or performance of any
term or obligation to be performed by it under any such agreement,
and no event has occurred which with notice or lapse of time or
both would constitute such a default, in any such case which
default or event, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect. No
default exists, and no event has occurred which with notice or
lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by
the Company or its subsidiary, if a subsidiary is a party thereto,
of any other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which Company or its properties
or business or a subsidiary or its properties or business may be
bound or affected which default or event, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect.

 

(p) The
statistical and market related data included in the Registration
Statement, the Statutory Prospectus or the Prospectus are based on
or derived from sources that the Company believes to be reliable
and accurate.

 

(q) Neither
the Company nor any subsidiary (i) is in violation of its
certificate or articles of incorporation, by-laws, certificate of
formation, limited liability company agreement, partnership
agreement or other organizational documents, (ii) is in default
under, and no event has occurred which, with notice or lapse of
time, or both, would constitute a default under, or result in the
creation or imposition of any lien, charge, mortgage, pledge,
security interest, claim, limitation on voting rights, equity,
trust or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever, upon, any property or assets of
the Company or any subsidiary pursuant to, any bond, debenture,
note, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or
(iii) is in violation of any statute, law, rule, regulation,
ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, foreign
or domestic, except (in the case of clauses (ii) and (iii) above)
for violations or defaults that would not (individually or in the
aggregate) reasonably be expected to have a Material Adverse
Effect.

 


 




 

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(r) This
Agreement has been duly authorized, executed and delivered by the
Company.

 

(s) Neither
the execution, delivery and performance of this Agreement by the
Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) would (individually or in
the aggregate) reasonably be expected to have a Material Adverse
Effect by giving rise to a right to terminate or accelerate the due
date of any payment due under, or conflicting with or resulting in
the breach of any term or provision of, or constitute a default (or
an event which with notice or lapse of time or both would
constitute a default) under, or requiring any consent or waiver
under, or resulting in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company
or its subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which
either the Company or its subsidiaries or any of their properties
or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to
the Company or any of its subsidiaries or violate any provision of
the charter or by-laws of the Company or any of its subsidiaries,
except for such consents or waivers which have already been
obtained and are in full force and effect.

 

(t) The
authorized, issued and outstanding capital stock of the Company is
as set forth in the Statutory Prospectus and the Prospectus (other
than for subsequent issuances, if any, pursuant to employee benefit
plans described in the Statutory Prospectus and the Prospectus or
upon the exercise of outstanding options described in the Statutory
Prospectus and the Prospectus). All of the issued and outstanding
shares of Common Stock have been duly and validly issued and are
fully paid and nonassessable. There are no statutory preemptive or
other similar rights to subscribe for or to purchase or acquire any
shares of Common Stock of the Company or any of its subsidiaries or
any such rights pursuant to its Certificate of Incorporation or
by-laws or any agreement or instrument to or by which the Company
or any of its subsidiaries is a party or bound. The Shares, when
issued and sold pursuant to this Agreement, will be duly and
validly issued, fully paid and nonassessable, and none of them will
be issued in violation of any preemptive or other similar right.
Except as disclosed in the Registration Statement, the Statutory
Prospectus and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue, any share of stock of the
Company or any of its subsidiaries or any security convertible
into, or exercisable or exchangeable for, such stock. The exercise
price of each option to acquire Common Stock (each, a
“Company Stock
Option”) is no less than
the fair market value of a share of Common Stock as determined on
the date of grant of such Company Stock Option. All grants of
Company Stock Options were validly issued and properly approved by
the board of directors of the Company in material compliance with
all applicable laws and the terms of the plans under which such
Company Stock Options were issued and were recorded on the Company
Financial Statements in accordance with GAAP, and no such grants
involved any “back dating”, “forward
dating,” “spring loading” or similar practices
with respect to the effective date of grant. The Common Stock and
the Shares conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the
Statutory Prospectus and the Prospectus. All outstanding shares of
capital stock of each of the Company’s subsidiaries have been
duly authorized and validly issued and are fully paid and
nonassessable, and are owned directly by the Company or by another
wholly-owned subsidiary of the Company free and clear of any
security interests, liens, encumbrances, equities or claims, other
than those described in the Statutory Prospectus and the
Prospectus.

 




 

8








 






 

(u) The
Company and its subsidiaries have been and are in compliance with
all applicable laws, rules and regulations, except where failure to
be so in compliance would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect. The Company
and its subsidiaries maintain internal policies and procedures
designed to ensure that they shall remain in material compliance
with all applicable laws, rules and regulations applicable to the
Company, and such internal policies and procedures are reviewed
periodically.

 

(v) No
person or entity has any right, which has not been waived, to have
any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such
holder for a period of 90 days after the date of this Agreement.
Each director and executive officer of the Company and each
stockholder of the Company listed on Schedule II hereto has
delivered to the Representative his enforceable written lock-up
agreement in the form attached to this Agreement as Exhibit A
hereto (“Lock-Up
Agreement”).

 

(w) There
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries would individually or in the aggregate have a Material
Adverse Effect; and, to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.

 

(x) All
necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the
Company.

 

(y) Neither
the Company nor any of its subsidiaries is involved in any labor
dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would reasonably be expected to have a
Material Adverse Effect. The Company is not aware of any existing
or imminent labor disturbance by the employees of any of its
principal suppliers or contractors which would reasonably be
expected to have a Material Adverse Effect. The Company is not
aware of any threatened or pending litigation between the Company
or its subsidiaries and any of its executive officers which, if
adversely determined, would reasonably be expected to have a
Material Adverse Effect and has no reason to believe that such
officers will not remain in the employment of the
Company.

 

(z) No
transaction has occurred between or among the Company and any of
its officers or directors, shareholders or any affiliate or
affiliates of any such officer or director or shareholder that is
required to be described in and is not described in the
Registration Statement, the Statutory Prospectus and the
Prospectus.

 

(aa) The
Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock or of any
“reference security” (as defined in Rule 100 of
Regulation M under the Exchange Act (“Regulation
M”)) with respect to the
Shares, whether to facilitate the sale or resale of the Shares or
otherwise, and has taken no action which would directly or
indirectly violate Regulation M.

 




 

9








 






 

(bb) There
are no business relationships or related-party transactions
involving the Company or any of its subsidiaries or any other
person required to be described in the Registration Statement, the
Statutory Prospectus or the Prospectus that have not been described
as required.

 

(cc) The
Company and each of its subsidiaries has filed all material
Federal, state, local and foreign tax returns which are required to
be filed through the date hereof, which returns are true and
correct in all material respects or has received timely extensions
thereof, and has paid all taxes shown on such returns and all
assessments received by it to the extent that the same are material
and have become due. There are no tax audits or investigations
pending, which if adversely determined, would reasonably be
expected to have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company or
any of its subsidiaries.

 

(dd) The
Shares have been duly authorized for quotation on The NYSE
American.

 

(ee) The
Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under
the Exchange Act or the quotation of the Common Stock on The NYSE
American nor has the Company received any notification that the
Commission or The NYSE American is contemplating terminating such
registration or quotation.

 

(ff) The
books, records and accounts of the Company and its subsidiaries, in
all material respects, accurately and fairly reflect, the
transactions in, and dispositions of, the assets of, and the
results of operations of, the Company and its subsidiaries. The
Company and each of its subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurances
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 accordance with generally accepted
accounting principles 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.

 

(gg) The
Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the
Exchange Act), which: (i) are designed to ensure that material
information relating to the Company is made known to the
Company’s principal executive officer and its principal
financial officer by others within the Company, particularly during
the periods in which the periodic reports required under the
Exchange Act are required to be prepared; (ii) provide for the
periodic evaluation of the effectiveness of such disclosure
controls and procedures at the end of the periods in which the
periodic reports are required to be prepared; and (iii) are
effective in all material respects to perform the functions for
which they were established.

 




 

10








 






 

(hh) Based
on the evaluation of its disclosure controls and procedures, the
Company is not aware of (i) any material weakness or significant
deficiency in the design or operation of internal controls which
would adversely affect the Company’s ability to record,
process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or not
material, that involves management or other employees who have a
role in the Company’s internal controls.

 

(ii) Except
as described in the Statutory Prospectus and the Prospectus and as
preapproved in accordance with the requirements set forth in
Section 10A of the Exchange Act, the Auditor has not been engaged
by the Company to perform any “prohibited activities”
(as defined in Section 10A of the Exchange Act).

 

(jj) Except
as described in the Statutory Prospectus and the Prospectus, there
are no material off-balance sheet arrangements (as defined in Item
303 of Regulation S-K) that have or are reasonably likely to have a
material current or future effect on the Company’s financial
condition, revenues or expenses, changes in financial condition,
results of operations, liquidity, capital expenditures or capital
resources.

 

(kk) The
Company’s board of directors has validly appointed an audit
committee whose composition satisfies the requirements of The NYSE
American and the board of directors and/or the audit committee has
adopted a charter that satisfies the requirements of The NYSE
American. The audit committee has reviewed the adequacy of its
charter within the past twelve months.

 

(ll) There
is and has been no failure on the part of the Company or any of its
directors or officers, in their capacities as such, to comply in
all materials respects with any provision of the Sarbanes-Oxley
Act, including, without limitation, Section 402 related to loans
and Sections 302 and 906 related to certifications.

 

(mm) The
Company and is subsidiaries carry, or are covered by, insurance in
such amounts and covering such risks as the Company reasonably
believes are adequate for the conduct of its business and as is
customary for companies engaged in similar businesses in similar
industries; and neither the Company nor any subsidiary of the
Company 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 at a cost that is not materially
greater than the current cost. Neither the Company not any of its
subsidiaries has been denied any insurance coverage which it has
sought or for which it has applied.

 

(nn) Each
approval, consent, order, authorization, designation, declaration
or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of
the transactions herein contemplated required to be obtained or
performed by the Company (except such additional steps as may be
required by the rules of the NYSE and the Financial Industry
Regulatory Authority (“FINRA”)
or as may be necessary to qualify the Shares for public offering by
the Underwriters under the state securities or Blue Sky laws) has
been obtained or made and is in full force and
effect.

 




 

11








 









(oo) There
are no affiliations with FINRA among the Company’s officers,
directors or, to the best of the knowledge of the Company, any five
percent or greater stockholder of the Company, except as set forth
in the Registration Statement or otherwise disclosed in writing to
the Representative.

 

(pp) (i)
Each of the Company and each of its subsidiaries is in compliance
in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment
(“Environmental
Law”) which are
applicable to its business; (ii) neither the Company nor its
subsidiaries has received any notice from any governmental
authority or third party of an asserted claim under Environmental
Laws; (iii) each of the Company and each of its subsidiaries has
received all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business and is
in compliance in all material respects with all terms and
conditions of any such permit, license or approval; (iv) to the
Company’s knowledge, no facts currently exist that will
require the Company or any of its subsidiaries to make future
material capital expenditures to comply with Environmental Laws;
and (v) no property which is or has been owned, leased or occupied
by the Company or its subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42
U.S.C. Section 9601, et. seq.) or otherwise designated as a
contaminated site under applicable state or local law. Neither the
Company nor any of its subsidiaries has been named as a
“potentially responsible party” under the CER, CLA
1980.

 

(qq) To
the Company’s knowledge, the costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties) would not, singly or in the
aggregate, have a Material Adverse Effect on the
Company.

 

(rr) The
Company is not and, after giving effect to the offering and sale of
the Shares and the application of proceeds thereof as described in
the Statutory Prospectus and the Prospectus, will not be an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended (the
“Investment Company
Act”).

 

(ss) The
Company or any other person associated with or acting on behalf of
the Company including, without limitation, any director, officer,
agent or employee of the Company or its subsidiaries, has not,
directly or indirectly, while acting on behalf of the Company or
its subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from corporate
funds; (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.

 

(tt) The
operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering
Laws”) and no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of
its subsidiaries with respect to the Money Laundering Laws is
pending, or to the best knowledge of the Company,
threatened.

 




 

12








 






 

(uu) Neither
the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of
the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”);
and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.

 

(vv) Except
pursuant to this Agreement, there is no broker, finder or other
party that is entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.

 

(ww) Each
financial or operational projection or other “forward-looking
statement” (as defined by Section 27A of the Securities Act
or Section 21E of the Exchange Act) contained in the Registration
Statement, the Statutory Prospectus or the Prospectus (i) was so
included by the Company in good faith and with reasonable basis
after due consideration by the Company of the underlying
assumptions, estimates and other applicable facts and circumstances
and (ii) is accompanied by meaningful cautionary statements
identifying those factors that would reasonably be expected to
cause actual results to differ materially from those in such
forward-looking statement. No such statement was made with the
knowledge of an executive officer or director of the Company that
is was false or misleading.

 

(xx) Except
as described in the Statutory Prospectus and the Prospectus, the
Company has not sold or issued any shares of Common Stock during
the six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or Regulations D
or S of, the Securities Act, other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other
employee compensation plans or pursuant to outstanding options,
rights or warrants.

 

(yy) None
of the Company, its directors or its officers has distributed nor
will distribute prior to the later of (i) the Firm Shares Closing
Date or the Option Shares Closing Date, and (ii) completion of the
distribution of the Shares, any offering material in connection
with the offering and sale of the Shares other than any Preliminary
Prospectus, the Prospectus, the Registration Statement and other
materials, if any, permitted by the Securities Act and consistent
with Section 3(d) below.

 

(zz) The
Company’s and the Subsidiaries’ information technology
assets and equipment, computers, systems, networks, hardware,
software, websites, applications, and databases
(collectively, “IT
Systems”) operate and
perform in all material respects as required in connection with the
operation of the business of the Company and the Subsidiaries as
currently conducted. The Company and the Subsidiaries maintain
commercially reasonable controls, policies, procedures, and
safeguards to maintain and protect their material confidential
information and the integrity, continuous operation, redundancy and
security of all IT Systems and all personal, personally
identifiable, sensitive, confidential or regulated data
(“Personal
Data”) processed and
stored thereon, and to the knowledge of the Company, there have
been no breaches, incidents, violations, outages, compromises or
unauthorized uses of or accesses to same, except for those that
have been remedied without material cost or liability or the duty
to notify any other person, nor any incidents under internal review
or investigations relating to the same. The Company and the
Subsidiaries are presently in compliance in all material respects
with all applicable laws or statutes and all applicable judgments,
orders, rules and regulations of any court or arbitrator or
governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT
Systems and Personal Data and to the protection of such IT Systems
and Personal Data from unauthorized use, access, misappropriation
or modification, except for any such noncompliance that would not
have a Material Adverse Effect.

 




 

13








 






 

3. Conditions
of the Underwriters’ Obligations. The obligations of the Underwriters under this
Agreement are several and not joint. The respective obligations of
the Underwriters to purchase the Shares are subject to each of the
following terms and conditions:

 

(a) Notification
that the Registration Statement has become effective and shall have
been received by the Representative, and the Prospectus shall have
been timely filed with the Commission in accordance with Section
4(a) of this Agreement, and any material required to be filed by
the Company pursuant to Rule 433(d) of the Rules shall have been
timely filed with the Commission in accordance with such
rule.

 

(b) No
order preventing or suspending the use of any Preliminary
Prospectus, the Prospectus or any “free writing
prospectus” (as defined in Rule 405 of the Rules), shall have
been or shall be in effect and no order suspending the
effectiveness of the Registration Statement shall be in effect and
no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Commission and the
Representative. If the Company has elected to rely upon Rule 430B,
Rule 430B information previously omitted from the effective
Registration Statement pursuant to Rule 430B shall have been
transmitted to the Commission for filing pursuant to Rule 424(b)
within the prescribed time period and the Company shall have
provided evidence satisfactory to the Underwriters of such timely
filing, or a post-effective amendment providing such information
shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430B.

 

(c) The
representations and warranties of the Company contained in this
Agreement and in the certificates delivered pursuant to Section
3(d) shall be true and correct when made and on and as of each
Closing Date as if made on such date. The Company shall have
performed all covenants and agreements and satisfied all the
conditions contained in this Agreement required to be performed or
satisfied by them at or before such Closing Date.

 

(d) The
Representative shall have received on each Closing Date a
certificate, addressed to the Representative and dated such Closing
Date, of the chief executive or chief operating officer and the
chief financial officer or chief accounting officer of the Company
to the effect that: (i) the representations, warranties and
agreements of the Company in this Agreement were true and correct
when made and are true and correct as of such Closing Date; (ii)
the Company has performed all covenants and agreements and
satisfied all conditions contained herein; (iii) they have
carefully examined the Registration Statement, the Prospectus, the
General Disclosure Package, and any individual Issuer Free Writing
Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include, and as of
the Applicable Time, neither (i) the General Disclosure
Package, nor (ii) any individual Issuer Free Writing
Prospectus, when considered together with the General Disclosure
Package, included, any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (B)
since the Effective Date, no event has occurred which should have
been set forth in a supplement or otherwise required an amendment
to the Registration Statement, the Statutory Prospectus or the
Prospectus; (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to their knowledge, no
proceedings for that purpose have been instituted or are pending
under the Securities Act and (v) there has not occurred 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.

 




 

14








 









(e) The
Representative shall have received: (i) simultaneously with the
execution of this Agreement, a signed letter from the Auditor
addressed to the Representative and dated the date of this
Agreement, in form and substance reasonably satisfactory to the
Representative, containing statements and information of the type
ordinarily included in accountants’ “comfort
letters” to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the General Disclosure Package, and
(ii) on each Closing Date, a signed letter from the Auditor
addressed to the Representative and dated the date of such Closing
Date(s), in form and substance reasonably satisfactory to the
Representative, containing statements and information of the type
ordinarily included in accountants’ “comfort
letters” to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus.

 

(f) The
Representative shall have received on each Closing Date an opinion
and negative assurance letter from Pearlman Law Group LLP, counsel
for the Company, addressed to the
Representative and dated as of such Closing Date, in form and
substance reasonably satisfactory to the
Representative.

 

(g) All
proceedings taken in connection with the sale of the Firm Shares
and the Company Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the
Representative, and their counsel.

 

(h) The
Representative shall have received copies of the Lock-up Agreements
executed by each entity or person listed on Schedule II
hereto.

 

(i) The
Company shall have filed a Notification: Listing of Additional
Shares with The NYSE American and received no objection
thereto.

 

(j) The
Representative shall be reasonably satisfied that since the
respective dates as of which information is given in the
Registration Statement, the Statutory Prospectus, the General
Disclosure Package and the Prospectus, (i) there shall not have
been any material change in the capital stock of the Company or any
material change in the indebtedness (other than in the ordinary
course of business) of the Company, (ii) except as set forth or
contemplated by the Registration Statement, the Statutory
Prospectus, the General Disclosure Package or the Prospectus, no
material oral or written agreement or other transaction shall have
been entered into by the Company that is not in the ordinary course
of business or that would reasonably be expected to result in a
material reduction in the future earnings of the Company, (iii) no
loss or damage (whether or not insured) to the property of the
Company shall have been sustained that had or would reasonably be
expected to have a Material Adverse Effect, (iv) no legal or
governmental action, suit or proceeding affecting the Company or
any of its properties that is material to the Company or that
affects or would reasonably be expected to affect the transactions
contemplated by this Agreement shall have been instituted or
threatened and (v) there shall not have been any Material Adverse
Effect.

 




 

15








 






 

(k) The
Company shall have furnished or caused to be furnished to the
Representative such further certificates or documents as the
Representative shall have reasonably requested.

 

4. Covenants
and other Agreements of the Company and the
Underwriters.

 

(a) The
Company covenants and agrees as follows:

 

(i) The
Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as
promptly as possible. The Company shall prepare the Prospectus in a
form approved by the Representative and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the
Commission’s close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by the Rules. The
Company will file with the Commission all Issuer Free Writing
Prospectuses in the time and manner required under Rules 433(d) or
163(b)(2), as the case may be.

 

(ii) The
Company shall promptly advise the Representative in writing (A)
when any post-effective amendment to the Registration Statement
shall have become effective or any supplement to the Prospectus
shall have been filed, (B) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for
any additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or any “free writing
prospectus”, as defined in Rule 405 of the Rules, or the
institution or threatening of any proceeding for that purpose and
(D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus or any
document incorporated by reference in the Registration Statement or
any Issuer Free Writing Prospectus unless the Company has furnished
the Representative a copy for its review prior to filing and shall
not file any such proposed amendment or supplement to which the
Representative reasonably object. The Company shall use its best
efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal
thereof.

 

(iii) If,
at any time when a prospectus relating to the Shares (or, in lieu
thereof, the notice referred to in Rule 173(a) of the Rules) is
required to be delivered under the Securities Act and any event
occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were
made not misleading, or if it shall be necessary to amend or
supplement the Prospectus to comply with the Securities Act or the
Rules, the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii) of
this Section 4(a), an amendment or supplement which shall correct
such statement or omission or an amendment which shall effect such
compliance.

 




 

16








 






 

(iv) If
at any time following issuance of an Issuer Free Writing Prospectus
there occurs an event or development as a result of which such
Issuer Free Writing Prospectus would conflict with the information
contained in the Registration Statement or would include an untrue
statement of a material fact or would omit 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 prevailing at
the subsequent time, not misleading, the Company will promptly
notify the Representative and will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or
omission.

 

(v) The
Company shall furnish to the Representative and counsel for the
Underwriters, without charge, copies of the Registration Statement
as originally filed (including all exhibits thereto and amendments
thereof) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and all amendments thereof
and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Securities Act or the Rules, as many
copies of any Preliminary Prospectus, any Issuer Free Writing
Prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representative may reasonably request.
If applicable, the copies of the Registration Statement,
Preliminary Prospectus, any Issuer Free Writing Prospectus and
Prospectus and each amendment and supplement thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation
S-T.

 

(vi) The
Company shall cooperate with the Representative and their counsel
in endeavoring to qualify the Shares for offer and sale in
connection with the offering under the laws of such jurisdictions
as the Representative may designate and shall maintain such
qualifications in effect so long as required for the distribution
of the Shares; provided, however, that the Company shall not be
required in connection therewith, as a condition thereof, to
qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction.

 

(vii) The
Company, during the period when the Prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) of the Rules) is required to
be delivered under the Securities Act and the Rules or the Exchange
Act, will file all reports and other documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act
and the regulations promulgated thereunder.

 

(viii) Without
the prior written consent of the Representative, for a period of 90
days after the date of this Agreement (“Lock-Up
Period”), the Company
shall not issue, sell or register with the Commission (other than
on Form S-8 or on any successor form), or otherwise dispose of,
directly or indirectly, any equity securities of the Company (or
any securities convertible into, exercisable for or exchangeable
for equity securities of the Company), except for (i) the issuance
of the Shares pursuant to the Registration Statement, (ii) the
issuance of shares pursuant to the Company’s existing stock
option plan or bonus plan as described in the Registration
Statement and the Prospectus, (iii) the issuance of Common
Stock pursuant to the conversion of securities or the exercise of
warrants, which securities or warrants are outstanding on the date
hereof and described in the Registration Statement and the
Prospectus; and (iv) adoption of a new equity incentive plan,
and filing a registration statement on Form S-8 under the
Securities Act to register the offer and sale of securities to be
issued pursuant to such new equity incentive plan, and issue
securities pursuant to such new equity incentive plan (including,
without limitation, the issuance of shares of Common Stock upon the
exercise of options or other securities issued pursuant to such new
equity incentive plan), provided that (1) such new equity
incentive plan satisfies the transaction requirements of General
Instruction A.1 of Form S-8 under the
Securities Act and (2) this clause (iv) shall not be
available unless each recipient of shares of Common Stock, or
securities exchangeable or exercisable for or convertible into
Common Stock, pursuant to such new equity incentive plan shall be
contractually prohibited from selling, offering, disposing of or
otherwise transferring any such shares or securities during the
remainder of the Lock-Up Period.

 




 

17








 






 




(ix) On
or before completion of this offering, the Company shall make all
filings required under applicable securities laws and by The NYSE
American (including any required registration under the Exchange
Act).

 

(x) Prior
to the Firm Shares Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of any of them, or the offering of the Shares
without the prior written consent of the Representative unless in
the judgment of the Company and its counsel, and after notification
to the Representative, such press release or communication is
required by law.

 

(xi) The
Company will apply the net proceeds from the offering of the Shares
in all material respects in the manner set forth under “Use
of Proceeds” in the Prospectus.

 

(b) The
Company agrees to pay, or reimburse if paid by the Representative,
whether or not the transactions contemplated hereby are consummated
or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those
relating to: (i) the preparation, printing, reproduction filing and
distribution of the Registration Statement including all exhibits
thereto, each Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus, all amendments and supplements thereto and
any document incorporated by reference therein, and the printing,
filing and distribution of this Agreement; (ii) the preparation and
delivery of the Shares to the Underwriters; (iii) the furnishing
(including costs of shipping and mailing) to the Representative and
to the Underwriters of copies of each Preliminary Prospectus, the
Prospectus and all amendments or supplements to the Prospectus, any
Issuer Free Writing Prospectus, and of the several documents
required by this Section 4 to be so furnished, as may be reasonably
requested for use in connection with the offering and sale of the
Shares by the Underwriters or by dealers to whom Shares may be
sold; (iv) inclusion of the Shares for quotation on The NYSE
American; (v) all transfer taxes, if any, with respect to the sale
and delivery of the Shares by the Company to the Underwriters;
(vi) all reasonable
out-of-pocket costs and expenses incident to the offering and the
performance of the obligations of the Representative under this
Agreement (including, without limitation, the reasonable fees and
expenses of counsel to the Underwriters) not to exceed $50,000 in
the aggregate (without the Company’s prior approval which
shall not be unreasonably withheld, conditioned or delayed),
excluding (x) the registration
or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred
to in Section 4(a)(vi), including the reasonable fees and
disbursements of counsel for the Underwriters in connection with
such registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky
memoranda and (y) the filing fees of FINRA in connection with its
review of the terms of the public offering and reasonable fees and
disbursements of counsel for the Underwriters in connection with
such review; and (vii) up to $15,000 for non-accountable expenses
including, but not limited to, IPREO software related expenses,
background check expenses, tombstones and marketing related
expenses, including road show expenses if they are
incurred. The Underwriters
agree to pay, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and
expenses incident to the performance of the obligations of the
Underwriters under this Agreement not payable by the Company
pursuant to the preceding sentence, including, without limitation,
the fees and disbursements of counsel for the
Underwriters.

 




 

18








 






 

(c) The
Company acknowledges and agrees that each of the Underwriters has
acted and is acting solely in the capacity of a principal in an
arm’s length transaction between the Company, on the one
hand, and the Underwriters, on the other hand, with respect to the
offering of Shares contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial
advisor, agent or fiduciary to the Company or any other person.
Additionally, the Company acknowledges and agrees that the
Underwriters have not and will not advise the Company or any other
person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company has its own advisors
concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no
responsibility or liability to the Company or any other person with
respect thereto, whether arising prior to or after the date hereof.
Any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions
have been and will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Company. The Company
agrees that it will not claim that the Underwriters, or any of
them, has rendered advisory services of any nature or respect, or
owes a fiduciary duty to the company or any other person in
connection with any such transaction or the process leading
thereto.

 

(d) The
Company represents and agrees that, unless it obtains the prior
consent of the Representative, and each Underwriter represents and
agrees that, unless it obtains the prior consent of the Company and
the Representative, it has not made and will not make any offer
relating to the Shares that would constitute an “issuer free
writing prospectus,” as defined in Rule 433, or that
would otherwise constitute a “free writing prospectus,”
as defined in Rule 405, required to be filed with the
Commission. The Company has complied and will comply with the
requirements of Rule 433 under the Act applicable to any Issuer
Free Writing Prospectus, including timely filing with the
Commission where required, legending and record keeping. The
Company represents that is has satisfied and agrees that it will
satisfy the conditions set forth in Rule 433 of the Rules to avoid
a requirement to file with the Commission any Road
Show.

 

5. Indemnification.

 

(a) The
Company agrees to indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any and all losses,
claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act
or other Federal or state law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement, the Statutory Prospectus,
the Prospectus, any Issuer Free Writing
Prospectus or any “issuer-information” filed or
required to be filed pursuant to Rule 433(d) of the Rules, any
amendment thereof or supplement thereto, or in any Blue Sky
application or other information or other documents executed by the
Company filed in any state or other jurisdiction to qualify any or
all of the Shares under the securities laws thereof (any such
application, document or information being hereinafter referred to
as a “Blue Sky
Application”) or arise
out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however,
that such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account
of any losses, claims, damages or liabilities arising from the sale
of the Shares to any person by such Underwriter if such untrue
statement or omission or alleged untrue statement or omission was
made in such preliminary prospectus, the Registration Statement,
the Prospectus, the Statutory Prospectus, any Issuer Free Writing
Prospectus or such amendment or supplement thereto, or in any Blue
Sky Application in reliance upon and in conformity with the
Underwriting Information. This indemnity agreement will be in
addition to any liability which the Company may otherwise
have.

 




 

19








 






 

(b) Each
Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each director of the Company, and
each officer of the Company who signs the Registration Statement,
against any losses, claims, damages or liabilities to which such
party may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained
in any preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Statutory
Prospectus or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with the Underwriting Information;
provided, however, that the obligation of each Underwriter to
indemnify the Company (including any controlling person, director
or officer thereof) shall be limited to the amount of the
underwriting discount and commissions applicable to the Shares to
be purchased by such Underwriter hereunder.

 

(c) Any
party that proposes to assert the right to be indemnified under
this Section 5 will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party
in respect of which a claim is to be made against an indemnifying
party or parties under this Section 5, notify each such
indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 5(a) or 5(b) shall be
available to any party who shall fail to give notice as provided in
this Section 5(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the
omission to so notify such indemnifying party of any such action,
suit or proceeding shall not relieve it from any liability that it
may have to any indemnified party for contribution or otherwise
than under this Section 5. In case any such action, suit or
proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to
the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and the approval
by the indemnified party of such counsel, the indemnifying party
shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the
reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized in writing by
the indemnifying parties, (ii) the indemnified party shall have
been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to
those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense
of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying parties. In
no event shall the indemnifying parties be liable for the
reasonable fees and expenses of more than one counsel (in addition
to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. An indemnifying
party shall not be liable for any settlement of any action, suit,
and proceeding or claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed unless such
settlement (i) includes an unconditional release of each
indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified
party

 




 

20








 






 

6. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section
5(a) or 5(b) is due in accordance with its terms but for any reason
is unavailable to or insufficient to hold harmless an indemnified
party in respect to any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall
contribute to the aggregate losses, liabilities, claims, damages
and expenses (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims
asserted, but after deducting any contribution received by any
person entitled hereunder to contribution from any person who may
be liable for contribution) incurred by such indemnified party, as
incurred, in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares
pursuant to this Agreement or, if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the
relative fault of the Company on the one hand and the Underwriters
on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission
or alleged omission. Notwithstanding the provisions of this Section
6, (i) no Underwriter (except as may be provided in any agreement
among Underwriters) shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to
the Shares purchased by such Underwriter. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the
meaning of the Section 15 of the Securities Act or Section 20 of
the Exchange Act, shall have the same rights to contribution as the
Company. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 6,
notify such party or parties from whom contribution may be sought,
but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties
from whom contribution may be sought from any other obligation it
or they may have hereunder or otherwise than under this Section 6.
No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its written
consent. The Underwriters’ obligations to contribute pursuant
to this Section 6 are several in proportion to their respective
underwriting commitments and not joint.

 




 

21








 






 

7. Termination.

 

(a) This
Agreement may be terminated with respect to the Shares to be
purchased on a Closing Date by the Representative by notifying the
Company at any time at or before a Closing Date in the absolute
discretion of the Representative if: (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 Representative, 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
Representative, inadvisable or impracticable to market the Shares
or enforce contracts for the sale of the Shares; (ii) there has
occurred any outbreak or material escalation of hostilities or acts
of terrorism or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in
the judgment of the Representative, inadvisable or impracticable to
market the Shares or enforce contracts for the sale of the Shares;
(iii) trading in the Shares or any securities of the Company has
been suspended or materially limited by the Commission or trading
generally on the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. or The Nasdaq Stock Market has been suspended or
materially limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by any of said exchanges or by such
system or by order of the Commission, FINRA, or any other
governmental or regulatory authority; (iv) a banking moratorium has
been declared by any state or Federal authority; or (v) in the
reasonable judgment of the Representative, there has been, since
the time of execution of this Agreement or since the respective
dates as of which information is given in 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.

 

(b) If
this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no
Underwriter shall be under any liability to the Company, except
that (y) if this Agreement is terminated by the Representative or
the Underwriters because of any failure, refusal or inability on
the part of the Company to comply with the terms or to fulfill any
of the conditions of this Agreement, the Company will reimburse the
Underwriters for all actual out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by
them in connection with the proposed purchase and sale of the
Shares or in contemplation of performing their obligations
hereunder, not to exceed $50,000 in the aggregate, and (z) no
Underwriter who shall have failed or refused to purchase the Shares
agreed to be purchased by it under this Agreement, without some
reason sufficient hereunder to justify cancellation or termination
of its obligations under this Agreement, shall be relieved of
liability to the Company or to the other Underwriters for damages
occasioned by its failure or refusal.

 

8. Substitution
of Underwriters. If any
Underwriter shall default in its obligation to purchase on any
Closing Date the Shares agreed to be purchased hereunder on such
Closing Date, the Representative shall have the right, within 36
hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase
such Shares on the terms contained herein. If, however, the
Representative shall not have completed such arrangements within
such 36-hour period, then the Company shall be entitled to a
further period of 36 hours within which to procure another party or
other parties satisfactory to the Underwriters to purchase such
Shares on such terms. If, after giving effect to any arrangements
for the purchase of the Shares of a defaulting Underwriter or
Underwriters by the Representative and the Company as provided
above, the aggregate number of Shares which remains unpurchased on
such Closing Date does not exceed one-eleventh of the aggregate
number of all the Shares that all the Underwriters are obligated to
purchase on such date, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such
date and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default. In any such
case, either the Representative or the Company shall have the right
to postpone the applicable Closing Date for a period of not more
than seven days in order to effect any necessary changes and
arrangements (including any necessary amendments or supplements to
the Registration Statement or Prospectus or any other documents),
and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in the opinion of
the Company and the Underwriters and their counsel may thereby be
made necessary.


 




 

22








 






 


If,
after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the
Representative and the Company as provided above, the aggregate
number of such Shares which remains unpurchased exceeds 10% of the
aggregate number of all the Shares to be purchased at such date,
then this Agreement, or, with respect to a Closing Date which
occurs after the Firm Shares Closing Date, the obligations of the
Underwriters to purchase and of the Company, to sell the Company
Option Shares to be purchased and sold on such date, shall
terminate, without liability on the part of any non-defaulting
Underwriter to the Company, and without liability on the part of
the Company, except as provided in Sections 4(b), 5, 6 and 7. The
provisions of this Section 8 shall not in any way affect the
liability of any defaulting Underwriter to the Company or the
nondefaulting Underwriters arising out of such default. The term
“Underwriter” as used in this Agreement shall include
any person substituted under this Section 8 with like effect as if
such person had originally been a party to this Agreement with
respect to such Shares.

 

9. Miscellaneous.
The respective agreements, representations, warranties, indemnities
and other statements of the Company and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them
pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or the Company or
any of their respective officers, directors or controlling persons
referred to in Sections 5 and 6 hereof, and shall survive delivery
of and payment for the Shares. In addition, the provisions of
Sections 4(b), 5, 6 and 7 shall survive the termination or
cancellation of this Agreement.

 


This
Agreement has been and is made for the benefit of the Underwriters
and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors
and officers of the Company, and their respective successors and
assigns, and no other person shall acquire or have any right under
or by virtue of this Agreement. The term “successors and
assigns” shall not include any purchaser of Shares from any
Underwriter merely because of such purchase.

 



All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently
confirmed in writing, (a) if to the Representative, c/o
A.G.P./Alliance Global Partners, 590 Madison Avenue, New York, NY
10022, Attention: Thomas J. Higgins and to Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., 666 Third Avenue, New York, New
York 10017, Attention: Daniel A. Bagliebter, Esq., Facsimile:
212-983-3115, and (b) if to the Company, to its agent for service
as such agent’s address appears on the cover page of the
Registration Statement with copies to Pearlman Law Group LLP, 200
S. Andrews Avenue, Suite 901, Fort Lauderdale, FL 33301, Attention:
Brian A. Pearlman, Facsimile 954-755-2993.

 


This
Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

 



[Remainder of Page Intentionally Left Blank.]


 




 

23








 






 


This
Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same
instrument.

 


Please
confirm that the foregoing correctly sets forth the agreement among
us.

 


Very
truly yours,

 


INUVO,
INC.


 


By:
/s/ Wallace D.
Ruiz


 
Title:
Chief Financial Officer



 


 


 


 


 


Confirmed
as of the date first written above mentioned, on behalf of itself
and as Representative of the several Underwriters named on Schedule
1 hereto:


 


A.G.P./ALLIANCE
GLOBAL PARTNERS


 


 


By:
/s/ 
Thomas J. Higgins


Name:
Thomas J. Higgins

Title:  
Managing Director, Investment Banking


 


 




 












 










 



SCHEDULE I


 


 


	


Name

	
 

	


Number of



Firm Shares



to be Purchased

	


Number of



Option Shares



to be Purchased if the Over-Allotment Option is Fully Exercised by
the Representative


	

A.G.P./Alliance
Global Partners

	
 

	
 20,000,000

	
 1,500,000


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	

Total

	
 

	
 

	
 







 


 


 

 


 

 




Sch. I
- 1








 










 



SCHEDULE II

 



Lock-Up Signatories

 


Richard
K. Howe


Wallace
D. Ruiz


John B.
Pisaris


Don
Walker “Trey” Barrett, III


Charles
D. Morgan


Gordon
J. Cameron


G. Kent
Burnett


 


 


 


 




Sch. II
- 1








 










 



SCHEDULE III

 



Issuer Free Writing Prospectuses

 


None




Sch.
III - 1








 







EXHIBIT A

 



FORM OF LOCK-UP AGREEMENT


 


 



Lock-Up Agreement

 


 

 



_______________, 2020

 


Alliance
Global Partners


590
Madison Avenue, 36th Floor


New
York, New York 10022


 


Ladies
and Gentlemen:

 


The
undersigned understands that A.G.P./Alliance Global Partners, as
Representative of the several underwriters (the “Representative”), proposes to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with
Inuvo, Inc., a Nevada corporation (the “Company”), providing for the
public offering (the “Public
Offering”) by the several Underwriters named in
Schedule 1 to the
Underwriting Agreement (the “Underwriters”) of shares of common
stock, par value $0.001 per share, of the Company (the
“Common
Shares”). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the
Underwriting Agreement.

 


To
induce the Representative to continue its efforts in connection
with the Public Offering, the undersigned hereby agrees that,
without the prior written consent of the Representative, the
undersigned will not, during the period commencing on the date
hereof and ending 90 days after the date of the Underwriting
Agreement relating to the Public Offering (the “Lock-Up Period”), (1) offer,
pledge, sell, contract to sell, grant, lend, or otherwise transfer
or dispose of, directly or indirectly, any Common Shares or any
securities convertible into or exercisable or exchangeable for
Common Shares, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition (collectively, the
“Lock-Up
Securities”); (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Lock-Up Securities,
whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Lock-Up Securities, in cash or
otherwise; (3) make any demand for or exercise any right with
respect to the registration of any Lock-Up Securities; or (4)
publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other
arrangement relating to any Lock-Up Securities. Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer Lock-Up Securities without the prior written consent of
the Representative in connection with (a) transactions relating to
Lock-Up Securities acquired in open market transactions after the
completion of the Public Offering; provided that no filing under Section
16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
shall be voluntarily made in connection with subsequent sales of
Lock-Up Securities acquired in such open market transactions; (b)
transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or
to a family member or trust for the benefit of a family member (for
purposes of this lock-up agreement, “family member”
means any relationship by blood, marriage or adoption, not more
remote than first cousin); (c) transfers of Lock-Up Securities to a
charity or educational institution; or (d) if the undersigned,
directly or indirectly, controls a corporation, partnership,
limited liability company or other business entity, any transfers
of Lock-Up Securities to any shareholder, partner or member of, or
owner of similar equity interests in, the undersigned, as the case
may be; provided that in
the case of any transfer pursuant to the foregoing clauses (b), (c)
or (d), (i) any such transfer shall not involve a disposition for
value, (ii) each transferee shall sign and deliver to the
Representative a lock-up agreement substantially in the form of
this lock-up agreement and (iii) no filing under Section 16(a) of
the Exchange Act shall be voluntarily made. The undersigned also
agrees and consents to the entry of stop transfer instructions with
the Company’s transfer agent and registrar against the transfer of the
undersigned’s Lock-Up Securities except in compliance with
this lock-up agreement.

 




Ex. A -
4








 






 


If the
undersigned is an officer or director of the Company, (i) the
undersigned agrees that the foregoing restrictions shall be equally
applicable to any issuer-directed or “friends and
family” Common Shares that the undersigned may purchase in
the Public Offering; and (ii) the Representative agrees that, at
least three (3) business days before the effective date of any
release or waiver of the foregoing restrictions in connection with
a transfer of Lock-Up Securities, the Representative will notify
the Company of the impending release or waiver. The provisions of
this paragraph will not apply if (a) the release or waiver is
effected solely to permit a transfer of Lock-Up Securities not for
consideration and (b) the transferee has agreed in writing to be
bound by the same terms described in this lock-up agreement to the
extent and for the duration that such terms remain in effect at the
time of such transfer.

 


No
provision in this agreement shall be deemed to restrict or prohibit
the exercise, exchange or conversion by the undersigned of any
securities exercisable or exchangeable for or convertible into
Common Shares, as applicable; provided that the undersigned does not
transfer the Common Shares acquired on such exercise, exchange or
conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no
provision herein shall be deemed to restrict or prohibit the entry
into or modification of a so-called “10b5-1” plan at
any time (other than the entry into or modification of such a plan
in such a manner as to cause the sale of any Lock-Up Securities
within the Lock-Up Period).

 


The
undersigned understands that the Company and the Representative are
relying upon this lock-up agreement in proceeding toward
consummation of the Public Offering. The undersigned further
understands that this lock-up agreement is irrevocable and shall be
binding upon the undersigned’s heirs, legal representatives,
successors and assigns.

 


The
undersigned understands that, if the Underwriting Agreement is not
executed by September 15, 2020, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall
terminate or be terminated prior to the initial closing date of the
Common Shares to be sold thereunder, then this lock-up agreement
shall be void and of no further force or effect.

 



[Remainder of Page Intentionally Blank]

 


 




Ex. A -
4








 






 


Whether
or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which
are subject to negotiation between the Company and the
Representative.

 


	
 

	
 

	
 


	
 

	


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:

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 







 


 




Ex. A -
4