Document:

Exhibit

Exhibit 10.1

TPG Specialty Lending, Inc.
301 Commerce Street, Suite 3300
Fort Worth, TX 76102

March 18, 2018

Northern Oil and Gas, Inc.
601 Carlson Parkway, Suite 990    
Minnetonka, MN 55305

		
	Re:
	Limited Waiver and Amendment to Term Loan Credit Agreement

Ladies and Gentlemen:
Reference is hereby made to that certain Term Loan Credit Agreement, dated as of November 1, 2017 (as amended prior to the date hereof, the “Credit Agreement”), among Northern Oil and Gas, Inc., a Minnesota corporation (the “Borrower”), TPG Specialty Lending, Inc., as administrative agent (in such capacity, the “Administrative Agent”) and as collateral agent, and the lenders from time to time party thereto (the “Lenders”).  Unless otherwise defined herein, all terms used herein which are defined in the Credit Agreement shall have the meaning assigned to such terms in the Credit Agreement.  
1.Request for Waiver and Consent.  

The Borrower has advised the Administrative Agent and the Lenders that (i) the Borrower intends to raise not less than $156,000,000 from one or more issuances of its common stock on or prior to May 31, 2018 (the “Specified Equity Issuance”) as a condition precedent to the exchange of certain of its outstanding 8.00% Senior Notes due 2020 for common stock in the Borrower and certain Senior Secured Second Lien Notes to be issued by the Borrower on the terms described in the term sheet attached hereto as Exhibit A pursuant to and as more particularly described in that certain Exchange Agreement, dated as of January 31, 2018, between the Borrower and the noteholders party thereto, and (ii) in the absence of the waiver provided herein, the Borrower would be required to prepay the Loans with (or otherwise notify the Administrative Agent of its intent to timely reinvest in accordance with the Credit Agreement) 100% of the Net Cash Proceeds of the Specified Equity Issuance pursuant to Section 3.04(b)(iii) of the Credit Agreement (the “Equity Issuance Prepayment Requirement”).  The Borrower has requested that the Administrative Agent and the Lenders enter into this letter agreement (this “Letter Agreement”) to waive the Equity Issuance Prepayment Requirement, and the Administrative Agent and the Lenders have agreed to enter into this Letter Agreement on the terms and conditions set forth herein.
		
	2.
	Limited Waiver.  

In reliance on the representations, warranties, covenants and agreements contained in this Letter Agreement (including, without limitation, the amendments to the Credit Agreement provided for in Section 3 hereof and the agreement of the parties in Section 4 hereof), the Administrative Agent and the Lenders hereby waive the Equity Issuance Prepayment Requirement solely with respect to the Specified Equity Issuance; provided that such waiver shall only apply to a maximum amount of Net Cash Proceeds from the Specified Equity Issuance equal to $156,000,000.  Nothing contained herein shall be deemed a consent to, 

or waiver of, any other action or inaction of any Credit Party which constitutes (or would constitute) a violation of any provision of the Credit Agreement or any other Loan Document, or which results (or would result) in a Default or Event of Default under the Credit Agreement or any other Loan Document.  The Administrative Agent and the Lenders shall have no obligation to grant any future waivers, consents or amendments with respect to the Credit Agreement or any other Loan Document, and the parties hereto agree that the waiver provided herein shall constitute a one-time waiver, shall not constitute a course of dealing among the parties, and shall not waive, affect or diminish any right of Administrative Agent and the Lenders to hereafter demand strict compliance with the Credit Agreement and the other Loan Documents.
3.Amendments to Credit Agreement. 

In reliance on the representations, warranties, covenants and agreements contained in this Letter Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend the Credit Agreement as follows:
(a) The definition of “Permitted Junior Lien Debt” in Section 1.02 of the Credit Agreement is hereby amended and restated as set forth below: 
“Permitted Junior Lien Debt” means Debt secured by a Lien junior in priority to the Liens securing the Secured Obligations and satisfies the following conditions: (a) such Debt does not have an interest rate that would cause any non-compliance with Section 9.22; (b) such Debt (or the documents governing such Debt) shall not contain (i) any individual financial maintenance covenant or event of default that is more restrictive or onerous with respect to the Borrower and the Subsidiaries than any individual financial maintenance covenant or event of default, as applicable, in this Agreement, unless this Agreement is validly amended substantially contemporaneously with the issuance or incurrence of such Debt (or occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) to include such applicable and more restrictive or onerous financial maintenance covenants or events of default, (ii) any covenants (other than financial maintenance covenants) that are more onerous or restrictive with respect to the Borrower and the Subsidiaries than the covenants in this Agreement, unless this Agreement is validly amended substantially contemporaneously with the issuance or incurrence of such Debt (or occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) to include such applicable and more restrictive or onerous covenants, (iii) restrictions on the ability of the Borrower or any of its Subsidiaries to guarantee the Secured Obligations or to pledge assets as collateral security for the Secured Obligations, or (iv) any prohibition on the prior repayment of any Secured Obligations; (c) the Liens securing such Debt are subordinated to the Liens securing the Secured Obligations and such Liens and the terms of such Debt are subject to the Second Lien Intercreditor Agreement and the security documents creating junior liens securing such Debt shall be reasonably acceptable to the Administrative Agent; (d) at the time of issuing or incurring such Debt (or the occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) (i) no Default has occurred and is then continuing, (ii) no Default would result from the incurrence of such Debt after giving effect to the incurrence of such Debt, and (iii) after giving effect to the issuance or incurrence (or otherwise becoming outstanding) thereof, the Borrower is in pro forma compliance with the financial covenants contained in Section 9.01, (e) the terms of such Debt (or the documents governing such Debt) do not provide for a maturity date or any scheduled principal repayment, mandatory principal redemption or sinking fund obligation in each case prior to the 180th day after the Maturity Date (other than customary offers to purchase upon 

a change of control, asset sale, or casualty or condemnation event (so long as any such mandatory prepayment or offer to purchase in respect of any asset sale, casualty or condemnation event is made subject to the applicable prepayment provisions set forth in this Agreement) and customary acceleration rights after an event of default), (f) the outstanding principal amount of the Loans at any time such Debt is issued or incurred (or the occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) is at least $360,000,000 and (g) substantially contemporaneously with the issuance or incurrence (or the occurrence of such other event, such as an exchange or conversion, that causes such Debt to become outstanding) of such Debt, the definitions of “Call Protection Amount” and “Yield Maintenance Amount” contained in this Agreement and any related provisions of this Agreement are validly amended to the extent necessary so that the time periods (including the time periods with respect to the Initial Term Loans, which for the avoidance of doubt, shall be amended so that such time periods are deemed to commence on the date that such Permitted Junior Lien Debt is incurred) and percentages contained in the call protection, prepayment premium and yield maintenance provisions applicable to the Loans are no less favorable (from the perspective of the Lenders) than the more favorable (from the perspective of the Lenders) of the time periods and percentages for the call protection, prepayment premium and yield maintenance provisions (i) set forth in the second lien notes term sheet attached as Exhibit A to the Letter Agreement, dated March __, 2018, between the Administrative Agent, the Borrower and the Lenders party thereto and (ii) of such Debt.

(b)    Section 6.02 of the Credit Agreement is hereby amended by replacing clause (g) thereof with the new clauses (g) and (h) set forth below: 

(g)    After giving pro forma effect to such Loan, the sum of (i) the aggregate outstanding principal amount of the Loans, plus (ii) the aggregate amount of any Call Protection Amount and any Yield Maintenance Amount that would be due, in each case calculated as if the entire principal amount of the Loans was repaid on the date of such borrowing, plus (iii) the amount of any accrued but unpaid interest and fees shall be less than or equal to $460,000,000.  

(h)    After the Effective Date, the Borrower shall have delivered a certificate to the Administrative Agent representing and warranting on the date thereof to the matters specified in Section 6.02(a), (b), (d), (e) and (g) (and attached to such certificate are reasonably detailed calculations demonstrating compliance with Section 9.01).

4.Additional Borrowing.  In reliance on the representations, warranties, covenants and agreements contained in this Letter Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Borrower shall, no later than June 1, 2018, submit a Borrowing Request, together with such other documents and instruments required by the Credit Agreement, in order to borrow Delayed Draw Loans in an amount not less than $60,000,000, and no later than five Business Days after delivering such Borrowing Request, consummate such borrowing.  Solely with respect to the borrowing described in this Section 4, the Administrative Agent and the Lenders agree to waive the condition precedent contained in Section 6.02(e) of the Credit Agreement.

5.Confirmation and Effect.  The provisions (other than as amended by this Letter Agreement) of the Credit Agreement shall remain in full force and effect in accordance with its terms following the date hereof.  Each reference in the Credit Agreement (as amended hereby) to “this Agreement”, “hereunder”, “hereof’, “herein”, or words of like import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference to the Credit Agreement in any other document, instrument or agreement executed 

and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended hereby. 

6.Representations and Warranties; Ratifications and Affirmations of the Credit Parties.  To induce the Lenders and the Administrative Agent to enter into this Letter Agreement, the Borrower hereby represents and warrants to the Lenders and the Administrative Agent as follows:

		
	(a)
	The representations and warranties of the Borrower set forth in this Agreement and in the other Loan Documents are true and correct in all material respects on and as of the date of this Letter Agreement, except (i) to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date of this Letter Agreement, such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date and (ii) to the extent that any such representation and warranty is qualified by materiality, material adverse effect or similar qualification, in which case such representation and warranty shall be true and correct in all respects.

		
	(b)
	No Default or Event of Default exists.

The Borrower (x) ratifies and affirms its obligations under the Credit Agreement and the other Loan Documents to which it is a party and (y) acknowledges the validity, enforceability and binding effect against the Borrower of the Credit Agreement and each other Loan Document to which it is a party, each as modified hereby.
7.Miscellaneous.      The parties hereto hereby agree that (a) this Letter Agreement may be executed in counterparts, and all parties need not execute the same counterpart; fax or other electronic transmission (e.g., “.pdf”) shall be effective as delivery of a manually executed original counterpart hereof, and this Letter Agreement shall become effective when signed by the Borrower, the Administrative Agent and each of the Lenders, (b) the expense reimbursement and indemnification provisions of Section 12.03 of the Credit Agreement are hereby incorporated by reference and made a part hereof, (c) THIS LETTER AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE MATTERS SET FORTH HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES AND THAT  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES, (d) this Letter Agreement constitutes a “Loan Document” under and as defined in Section 1.02 of the Credit Agreement and, notwithstanding anything to the contrary herein or any other Loan Document, any failure to comply with the terms of this Letter Agreement by the Borrower shall constitute an immediate Event of Default under Section 10.01 of the Credit Agreement with no cure period, and (e) this Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

Please evidence your agreement to each of the provisions of this Letter Agreement by executing a counterpart hereof where indicated and returning a fully executed counterpart to the Administrative Agent.  

[Signature Pages Follow]

	
		
	 
	TPG SPECIALTY LENDING, INC.
as Administrative Agent and a Lender
By:    /s/ Joshua W. Easterly                               
Name:    Joshua W. Easterly
Title:      CEO

[Signature Page to Letter Agreement - Northern Oil and Gas, Inc.]

	
		
	 
	TAO TALENTS, LLC
as a Lender
By:    /s/ Josh Peck                                               
Name:    Josh Peck
Title:      Vice President

[Signature Page to Letter Agreement - Northern Oil and Gas, Inc.]

	
		
	 
	TOP III TALENTS, LLC
as a Lender
By:    /s/ Josh Peck                                               
Name:    Josh Peck
Title:      Vice President

[Signature Page to Letter Agreement - Northern Oil and Gas, Inc.]

	
		
	 
	BORROWER:

NORTHERN OIL AND GAS, INC.,
a Minnesota corporation
By:    /s/ Brandon R. Elliott                                 
Name:    Brandon R. Elliott
Title:      Interim President

[Signature Page to Letter Agreement - Northern Oil and Gas, Inc.]

EXHIBIT A

Second Lien Notes Term Sheet

[Attached]

EXHIBIT A TO EXCHANGE AGREEMENT

Northern Oil and Gas, Inc.
Second Lien Notes 
Summary of Indicative Terms and Conditions 

Capitalized terms used but not otherwise defined in this Summary of Indicative Terms and Conditions (this “Term Sheet”) shall have the meaning assigned to such terms in the Exchange Agreement to which this Exhibit A is attached. 
	
		
	Issuer:
	Northern Oil and Gas, Inc., a Minnesota corporation (the “Issuer”).  Upon consummation of the Exchange Transaction, the Issuer shall be domiciled as a Delaware corporation. 

	Guarantors:
	All direct or indirect subsidiaries of the Issuer which guarantee any other indebtedness for borrowed money of the Obligors, including without limitation the Credit Facility (the “Guarantors”, and together with the Issuer, the “Obligors”). 

	Participating Holders:
	Each of the Noteholders party to the Exchange Agreement (the “Participating Holders”, together with their permitted successors and assigns, the “Holders”).

	Trustee:
	A third party financial institution chosen by the Participating Holders upon consultation with the Issuer, as trustee and collateral agent (such third party in such capacities, the “Trustee”).

	Type and Amount:
	Senior Secured Second Lien Notes of the Issuer (the “Second Lien Notes”) in an initial aggregate principal amount of $344,279,000 issued as partial exchange consideration for the Existing Notes.

	Scheduled Amortization:
	None.

	Interest Rate:
	Initially 8.50% per annum payable in cash (the “Cash Component”).
Beginning on July 1, 2018, the interest rate will step-up by 1.00% per annum, which such step-up in interest shall be payable in kind (the “PIK Component”).
If the financial statements and compliance certificate for the most recently ended fiscal quarter ending June 30th or December 31st (beginning with the fiscal quarter ending June 30, 2018) (each, a “Measurement Fiscal Quarter”) demonstrate that the Issuer and its subsidiaries have a Total Debt (which shall be measured off of all debt of the Issuer and its subsidiaries without giving effect to any cash netting) to EBITDAX (which shall be defined consistent with the Documentation Principles) ratio of:
(i) less than 3.00 to 1.00 as of the last day of  any such Measurement Fiscal Quarter, the PIK Component shall, subject to reinstatement in accordance with clause (ii) below, cease accruing effective as of the date such financial statements and compliance certificate are delivered in accordance with the definitive documentation (without giving effect to any grace period), or
(ii) equal to or greater than 3.00 to 1.00 as of the last day of such most recently ended Measurement Fiscal Quarter or if the Issuer fails to deliver the financial statements or compliance certificate by the date required in the definitive documentation with respect to any Measurement Fiscal Quarter, the PIK Component shall  immediately and automatically accrue and be payable in accordance with the definitive documentation effective as of the date such financial statements and compliance certificate are delivered (or fail to be delivered) in accordance with the definitive documentation (without giving effect to any grace period).
For the avoidance of doubt, the PIK Component shall be in addition to, and not in replacement of, the Cash Component and shall be reinstated immediately and automatically from time to time in accordance with clause (ii) above. 
Interest shall be payable quarterly.  Default interest shall be payable in cash on demand at the then applicable interest rate plus 3.00% per annum (the “Default Rate”).

	
		
	Ranking and Collateral:
	The Second Lien Notes and related guarantees will rank equal in right of payment to all existing and future senior indebtedness of the Obligors.  The Second Lien Notes will be secured by a perfected second priority lien security interest in all assets of the Obligors, subject to the exceptions set forth in the Credit Facility, and including those assets securing the Credit Facility (and junior only to the liens securing the Credit Facility); provided, however, that, the required collateral levels on oil and gas properties constituting proved reserves and proved developed producing reserves on the Closing shall be 90% and no later than 90 days following the Closing, such required collateral levels shall be increased from 90% to 95%; provided, further, during such periods in which the Ratio of Total Debt (which shall be defined to include all debt of the Issuer and its subsidiaries without giving effect to cash netting) to EBITDAX (to be defined consistent with the Documentation Principles) is less than 3.00 to 1.00, such required collateral levels on oil and gas properties shall be 90%.

	Intercreditor Agreement:
	At closing, the Trustee and the agent under the Credit Facility (the “First Lien Agent”) will enter into a customary intercreditor agreement in a form reasonably acceptable to the Participating Holders and negotiated in good faith (the “Senior Lien ICA”).

	Scheduled Maturity Date:

	The Second Lien Notes will mature on April 30, 2023.

	Optional Prepayment:
	The Second Lien Notes will be callable subject to payment of the Make-Whole Amount (as defined below) and/or the Call Protection Amount (as defined below), as applicable. 

	Mandatory Prepayment Offers:
	Subject to the terms of the Senior Lien ICA and the Documentation Principles (as defined below), the Second Lien Notes shall be subject to mandatory prepayment offers with 100% of the net cash proceeds of asset sales, casualty events and condemnations not required to be used to pay down the Credit Facility, subject to customary baskets, exclusions and reinvestment provisions consistent with the Credit Facility. Mandatory prepayment offers shall be subject to payment of the Make-Whole Amount and/or Call Protection Amount, as applicable.

	Make-Whole Amount and Call Protection Amount:

	“Make-Whole Amount” means, as of any date of determination (a) for any payment, redemption, repurchase, refinancing, substitution or replacement with respect to the Second Lien Notes (it being agreed that, in the case of an acceleration of any Second Lien Notes, including in connection with an insolvency proceeding, the principal amount of the Second Lien Notes accelerated shall be deemed to have been paid on the date of acceleration solely for purposes of calculating the Make-Whole Amount) in each case paid or deemed paid prior to the two year anniversary of the Closing an amount equal to the difference (which shall not be less than zero) of (A) the aggregate amount of interest (including, without limitation, interest payable in cash, in kind or deferred) which would have otherwise been payable on the amount of the principal repayment from the date of repayment (or deemed repayment in the case of an acceleration of the Second Lien Notes) or reduction until the two year anniversary of the Closing, minus (B) the aggregate amount of interest Holders would earn if the repaid (or deemed repaid in the case of an acceleration of the Second Lien Notes) or reduced principal amount were reinvested for the period from the date of prepayment (or deemed prepayment in the case of an acceleration of the Second Lien Notes) or reduction until the two year anniversary of the Closing at the treasury rate (which shall be defined as defined in the Credit Facility as in effect on the date hereof and with the reference to United States Treasury securities therein being United States Treasury Securities having a term of no greater than the period of the remaining months from such date of determination until the two year anniversary of the Closing). To the extent the Second Lien Notes become due and payable as a result of an Event of Default or the acceleration of the Second Lien Notes, including in connection with an insolvency proceeding, the rate of interest to be used in determining the Make-Whole Amount shall the Default Rate. 

	
		
	 
	“Call Protection Amount” means, as of any date of determination, an amount equal to the applicable percentage set forth as follows in respect of any payment, redemption, repurchase, refinancing, substitution or replacement of principal of the Second Lien Notes based on the number of months elapsed since the Closing (or in the case of an acceleration of any Second Lien Notes, including in connection with an insolvency proceeding, the applicable percentage set forth as follows of the principal amount of the Second Lien Notes accelerated): (a) during the period of time from and after the Closing up to and including the date that is the 36-month anniversary of the Closing, a prepayment premium equal to 104.0% of the principal amount being repaid and (b) during the period of time from and after the calendar day after the date that is the 36-month anniversary of the Closing up to and including the date that is the 48-month anniversary of the Closing, a prepayment premium equal to 102.0% of the principal amount being repaid. If any acceleration occurs prior to such dates, including in connection with an insolvency proceeding, the applicable Call Protection Amount shall be due and payable, regardless of when any payment is made on the Second Lien Notes.

	Change of Control:
	Upon the occurrence of any change of control (as defined in the Credit Facility as in effect on the date hereof), the Issuer shall make a mandatory offer to prepay the Second Lien Notes at an offer price equal to 101% of the principal amount so repaid (subject to the prepayment provisions of the Credit Facility as in effect on the date hereof, to the extent applicable).

	Documentation Principles:
	To be drafted by Kirkland & Ellis LLP, counsel to the Participating Holders, provided that the Senior Lien ICA shall be drafted by counsel to the First Lien Agent.  The definitive documentation for the Second Lien Notes shall be based upon the documentation for the Credit Facility as in effect on the date hereof (including, without limitation, affirmative covenants and negative covenants (other than financial maintenance covenants and PDP coverage ratio maintenance covenants), events of default and definitions related to any of the foregoing) (it being agreed and understood that any PDP coverage ratio incurrence tests shall be based upon the documentation for the Credit Facility as in effect on the date hereof, but will be measured off of both first lien and second lien debt and shall be reduced proportionally to account for being measured off of such first lien and second lien debt) with such changes as the Participating Holders shall reasonably agree and will take into account this Term Sheet, differences to reflect the changed capital structure of the Issuer and its subsidiaries, the second lien nature of the Second Lien Notes and the capital markets nature of the financing giving due regard to the Indentures (it being agreed and understood that to the extent the Credit Facility requires any provisions to be acceptable or approved by the First Lien Agent, the corresponding provisions in the definitive documentation for the Second Lien Notes shall require the acceptance or approval of the Holders holding a majority in principal amount of the Second Lien Notes). In addition, no covenants shall be more restrictive or onerous with respect to the Issuer and its subsidiaries than the covenants in the Credit Facility, other than to the extent to reflect the second lien nature of the Second Lien Notes (e.g., restrictions on junior debt shall refer to debt junior to the Second Lien Notes, rather than the Credit Facility) (it being agreed and understood that the Credit Facility will be amended to incorporate higher collateral thresholds and any other covenant in the Second Lien Notes that are more onerous or restrictive than the Credit Facility to the extent requested by the First Lien Agent and, in the event the First Lien Agent does not elect to incorporate such thresholds or covenants, such higher collateral thresholds and more onerous or restrictive covenants shall be permitted in the Second Lien Notes).  This paragraph shall be referred to as the “Documentation Principles”.

	
		
	Affirmative Covenants:
	The definitive documentation shall contain affirmative covenants as are in the Credit Facility as in effect on the date hereof with such changes as the Participating Holders shall reasonably agree to reflect the changed capital structure of the Obligors, the second lien nature of the Second Lien Notes and such other changes as are consistent with the Documentation Principles; including, but not limited to, (i) quarterly public earnings conference calls in place of Section 8.19 of the Credit Facility and (ii) omitting the reporting requirements set forth in Section 8.01(e), (n), (p) and (q) of the Credit Facility; provided, however, after the occurrence and during the continuance of an event of default, the Issuer shall provide such information delivered to the First Lien Agent but not otherwise required to be delivered to the Holders or Trustee via a customary private-side data site accessible by the Trustee and the Holders that elect to access such date site, subject to customary confidentiality obligations.  Notwithstanding the foregoing, affirmative covenants in connection with (i) the delivery of title information and additional mortgages, collateral and guarantees will provide for an automatic extension of up to 30 days on such delivery requirements so long as the First Lien Agent has granted such extension under the Credit Facility and (ii) minimum hedging shall be subject to any relief (e.g., waivers or extensions) granted by the First Lien Agent or lenders under the Credit Facility. 

	Negative Covenants:
	The definitive documentation shall contain such negative covenants as are in the Credit Facility as in effect on the date hereof with such changes as the Participating Holders shall reasonably agree to reflect the changed capital structure of the Obligors, the second lien nature of the Second Lien Notes and such other changes as are consistent with the Documentation Principles.  In addition, the negative covenants shall include, without limitation, the following (each of which may be amended or waived with the consent of Holders of a majority in principal amount of the Second Lien Notes, excluding, for such purpose, any Holder that is an affiliate of the Issuer): 

	
		
	 
	•
The Existing Notes (a) can only be refinanced or repaid (i) in exchange for or out of the net proceeds of the substantially concurrent issuance of common stock of the Issuer (other than common stock issued in connection with Closing) or substantially concurrent incurrence of permitted junior lien or unsecured refinancing debt of the Issuer maturing at least 91 days outside the maturity date of the Second Lien Notes or (ii) with aggregate operating cash flow (to be defined in a manner acceptable to the Participating Holders) minus capital expenditures, measured since the Closing; provided, however, a refinancing or repayment under this clause (ii) shall only be permitted if immediately prior to and after giving pro forma effect thereto and other transactions to occur on such date, (A) the Ratio of Total Debt (which shall be defined to include all debt of the Issuer and its subsidiaries and shall have no cash netting) to EBITDAX (to be defined consistent with the Documentation Principles and excluding, for the avoidance of doubt, any pro forma adjustments on account of pro forma cost savings and synergies) shall be less than 3.00 to 1.00 and (B) no defaults or events of default exist or shall occur after giving effect thereto and (b) for the avoidance of doubt, cannot be refinanced or repaid with second lien or other senior lien indebtedness (e.g. first lien, “one and a half” lien, etc.).  For the avoidance of doubt, the provisions of clause (ii) above shall replace the $75 million cap and 1.5 to 1.00 PDP Coverage Ratio Test set forth in Section 9.04(b) of the Credit Facility.

•
No more than $30 million of the Existing Notes may be outstanding as of March 1, 2020.

•
A provision (to replace Section 9.22 of the Credit Facility) that provides that to the extent any junior lien or unsecured debt has a cash interest rate in excess of 9.50% per annum (such amount above 9.50% per annum, the “Excess”), the cash rate on the Second Lien Notes shall be immediately and automatically increased by the amount of such Excess (the “MFN”).

•
Parameters on refinancing the Credit Facility, limited solely to (A) prohibitions against (i) the principal amount of the refinancing facility being greater than the sum of the principal amount refinanced and an amount necessary to pay any accrued and unpaid interest thereon and any fees and expenses, including call protection amounts, yield maintenance amounts and any other premiums, related to or that becomes due as a result of such refinancing (subject to the All In Cap (as defined below)) or (ii) increases to the Weighted Yield (as defined below) in the Credit Facility as in effect on the date hereof by more than 250 basis points, (B) a provision that provides that if the Credit Facility is refinanced with junior lien or unsecured debt, there shall be a dollar-for-dollar reduction of the first lien debt basket and the interest rate of such junior lien or unsecured debt shall be subject to the MFN above, (C) prohibitions against terms that restrict any payment, repayment, redemption, repurchase or other refinancing of or in respect of the Second Lien Notes that would be permitted under the Credit Facility as in effect on the Closing and (D) other customary parameters on refinancing.  For purposes of this Term Sheet, “Weighted Yield” shall mean as to any indebtedness, the weighted yield to maturity thereof based on interest rate margin, original issue discount or fees (in each case amortized over the life of such indebtedness), interest rate floors or other similar component of yield, in each case, incurred or payable by the borrower of such indebtedness, and excluding, for the avoidance of doubt, any changes in yield due to changes in the underlying reference rate (such as LIBOR or the Prime Rate) or application of any default rate of no more than 3.00% per annum, call protection amounts, make whole amounts and customary annual agency fees (regardless of whether any of the foregoing amounts are paid to, or shared with, in whole or in part, any lender). 
  
•
In the event the call protection on the Credit Facility (or a refinancing of the Credit Facility) is amended, modified or re-set (whether through an amendment, refinancing or otherwise) in a manner that is prejudicial to the Issuer as compared to the call protection under the Credit Facility (or the refinanced facility) immediately prior to such amendment, modification or refinancing, the Second Lien Notes shall be immediately and automatically amended to get the benefit of such prejudicial amendment, modification and/or reset (e.g., if the make-whole or call premium schedule is extended by a period of time, the Second Lien Notes make-whole or call premium call schedule, as applicable, is extended by such period of time; if a call premium is increased by a certain percentage over a certain time period, the Second Lien Notes call premium is increased by the same percentage over that same time period, etc.). 

•
No increases to the Weighted Yield of the Credit Facility as compared to the Credit Facility as in effect on the date hereof by more than 250 basis points.

	
		
	 
	•
No changes to the Credit Facility that restrict any payment, repayment, redemption, repurchase or other refinancing of or in respect of the Second Lien Notes that would be permitted under the Credit Facility as in effect on the Closing.

•
Prohibition on other amendments to Existing Notes that would adversely affect rights of Holders of the Second Lien Notes.

•
Other customary restrictions on amending the Existing Notes or the Credit Facility. 

•
No additional second lien or senior lien indebtedness (e.g., first lien, “one and a half” lien, etc.) other than a refinancing of Credit Facility with first lien indebtedness (it being agreed and understood that the Issuer may incur up to $400 million of principal amount in first lien indebtedness under  the Credit Facility); provided that, for the avoidance of doubt, such cap shall not apply to (i) the principal amount of any customary debtor-in-possession financing (which shall be subject to a $75,000,000 cap (exclusive of any “roll-up” of any prepetition amounts under the Credit Facility) which shall be set forth in the Senior Lien ICA), (ii) any customary protective advances in an amount up to 2.00% of the outstanding Credit Facility as of such time (without giving effect to any debtor-in-possession financing) by the lenders under the Credit Facility in respect of any collateral for insurance, taxes or maintenance of collateral, (iii) any increase in the principal amount of the Credit Facility due to interest paid in kind or capitalized, (iv) customary hedging obligations, or (v) in the case of a refinancing of the Credit Facility, any interest, fees, premiums, make whole amounts or call protection amounts that become due as a result of such refinancing in an amount, when aggregated with the principal amount of loans outstanding under the Credit Facility at such time, shall not exceed $460 million (the amount in this clause (v), the “All In Cap”).

•
No payments for consents unless offered to all Holders.

•
Anti-layering, including a restriction on any payment priority layering among tranches of first lien debt (it being understood that the foregoing shall not limit customary debtor-in-possession financing that subordinates the obligations under the Credit Facility, subject to mutually agreeable terms of the Senior Lien ICA).

	 
	•
Covenant against asset sales and other dispositions to be consistent with the Documentation Principles; provided, however, the definitive documentation shall permit any asset sale or disposition that the lenders under the Credit Facility consent to as long as (i) at least 75% of the consideration for such asset sale or disposition is received in the form of cash, (ii) such asset sale or disposition is not for all or substantially all of the assets of the Issuer and the Guarantors, (iii) no defaults or events of default exist or shall occur after giving effect thereto, (iv) fair market value is received (and if the consideration is greater than $50 million, fair market value must be supported by a third-party fairness opinion reasonably satisfactory to Holders of a majority in principal amount of the Second Lien Notes, excluding, for such purpose, any Holder that is an affiliate of the Issuer), (v) the net cash proceeds from such disposition are applied pursuant to the mandatory prepayment requirements of the Credit Facility and the definitive documentation for the Second Lien Notes and (vi) any assets received shall become collateral substantially concurrently with such asset sale or disposition.  

•
Covenant against investments to be consistent with the Documentation Principles; provided, however, the definitive documentation shall permit any acquisition of additional oil and gas properties (or equity in persons that own oil and gas properties) that the lenders under the Credit Facility consent to as long as the assets received become collateral substantially concurrently with such acquisition, subject to the collateral requirements set forth in the Second Lien Notes Indenture.

•
Covenant regarding maximum hedging to be consistent with the Documentation Principles; provided, however, such covenant shall be subject to any relief (e.g., waivers or extensions) granted by the First Lien Agent or lenders under the Credit Facility

	Financial Covenants:
	None.

	
		
	Events of Default:
	The definitive documentation shall contain such events of default consistent with the Documentation Principles, including cross defaults to the Credit Facility (provided, however, in the case of an event of default on account of the financial covenants (including PDP coverage ratio) under the Credit Facility, no such cross-default shall result unless (i) the Credit Facility has been accelerated, (ii) the First Lien Agent has commenced exercising remedies or (iii) such event of default has not been cured or waived under the terms of the Credit Facility within thirty (30) days after notice (which notice, for the avoidance of doubt, shall include the delivery of a compliance certificate) of the occurrence of such event of default has been delivered by the Issuer to the lenders under the Credit Facility (or should have been delivered in accordance with the Credit Facility) and other material debt, payment default on material debt, judgment defaults and failure to have perfected liens in any of the collateral.   

	AHYDO:              
	The Second Lien Notes shall contain customary “AHYDO catch-up” payment provisions, providing that the Issuer will make payments on the Second Lien Notes, before the close of any accrual period ending after the fifth anniversary of the issue date, an amount sufficient to ensure that the Second Lien Notes will not be “applicable high yield discount obligations” within the meaning of Section 163(i)(1) of the Internal Revenue Code.

	Governing Law:
	New York.

	Transfer:
	The Second Lien Notes shall be freely transferable without the consent of the Issuer. 

	Counsel to the Participating Holders:
	Kirkland & Ellis LLP.Exhibit 10.1

 

2,222,222 Shares of Common Stock

 

SPHERIX INCORPORATED

 

PLACEMENT AGENCY AGREEMENT

 

March 14, 2018

 

Laidlaw & Company (UK) Ltd..

As Representative of the Several Placement Agents

546 Fifth Avenue, 5th Floor

New York, NY 10036

 

Ladies and Gentlemen:

 

1.            Introductory.
Spherix Incorporated, a Delaware corporation (“Company”), proposes to issue and sell to certain purchasers,
pursuant to the terms of this Placement Agency Agreement (this “Agreement”) and the Subscription Agreements,
if any, in the form of Exhibit A attached hereto (the “Subscription Agreements”) entered into with the purchasers
identified therein (each a “Purchaser” and collectively, the “Purchasers”), 2,222,222 shares
(the “Securities”) of common stock, par value $0.0001 per share (the “Common Stock”). The
Company desires to engage Laidlaw & Company (UK) Ltd. as the exclusive placement agent (the “Placement Agents”)
and representative of the Placement Agents (the “Representative”) in connection with the offering, issuance
and sale of the Securities.

 

2.            Representations
and Warranties of the Company. Except as set forth in the Registration Statement and General Disclosure Package, the Company
represents and warrants to, and agrees with, the several Placement Agents that:

 

(a)       Filing
and Effectiveness of Registration Statement; Certain Defined Terms. The Company has filed with the Commission a registration
statement on Form S-3 and an amendment or amendments thereto (No.333-222488), including a related prospectus or prospectuses (including
any documents incorporated by reference therein, the “Base Prospectus”), covering the registration of the Securities
under the Act, which was declared effective by the Commission on January 19, 2018. “Registration Statement”
at any particular time means such registration statement in the form then filed with the Commission, including any amendment thereto,
any document incorporated by reference therein and all 430B Information and all 430C Information with respect to such registration
statement, that in any case has not been superseded or modified. “Registration Statement” without reference
to a time means the Registration Statement as of the Effective Time. For purposes of this definition, 430B Information shall be
considered to be included in the Registration Statement as of the time specified in Rule 430B.

 

     

     

    

 

For purposes of this Agreement:

 

“430B Information”
means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430B(e) or retroactively
deemed to be a part of the Registration Statement pursuant to Rule 430B(f).

 

“430C Information”
means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430C.

 

“Act” means
the Securities Act of 1933, as amended.

 

“Applicable Time”
means the time of execution of the Subscription Agreements by the parties thereto.

 

“Closing Date”
has the meaning defined in Section 4 hereof.

 

“Commission”
means the U.S. Securities and Exchange Commission.

 

“Effective Time”
of the Registration Statement relating to the Securities means the time of the first contract of sale for the Securities.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Final Prospectus”
means the Statutory Prospectus that discloses the public offering price, other 430B Information and other final terms of the Securities
and otherwise satisfies Section 10(a) of the Act.

 

“General Use Issuer Free
Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being so specified in Schedule B to this Agreement.

 

“Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Securities
in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g).

 

“Limited Use Issuer Free
Writing Prospectus” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus.

 

“Rules and Regulations”
means the rules and regulations of the Commission.

 

“Securities Laws”
means, collectively, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), the Act, the Exchange Act, the Rules
and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined
in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of The
NASDAQ Stock Market (“Exchange Rules”).

 

    2 

     

    

 

“Statutory Prospectus”
with reference to any particular time means the prospectus relating to the Securities that is included in the Registration Statement
immediately prior to that time, including all 430B Information and all 430C Information with respect to the Registration Statement.
For purposes of the foregoing definition, 430B Information shall be considered to be included in the Statutory Prospectus only
as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule
424(b) and not retroactively.

 

Unless otherwise specified, a
reference to a “rule” is to the indicated rule under the Act.

 

(b)       Compliance
with Securities Act Requirements. (i) (A) At the time the Registration Statement initially became effective, (B) at the time
of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment,
incorporated report or form of prospectus), (C) at the Effective Time relating to the Securities and (D) on the Closing Date, the
Registration Statement conformed and will conform in all material respects to the requirements of the Act and the Rules and Regulations
and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and (ii) (A) on its date, (B) at the time of filing the Final
Prospectus pursuant to Rule 424(b) and (C) on the Closing Date, the Final Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations, and will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein not misleading.

 

(c)       Shelf
Registration Statement. The date of this Agreement is not more than three years subsequent to the more recent of the initial
effective time of the Registration Statement.

 

(d)       General
Disclosure Package. As of the Applicable Time, neither (i) the General Use Issuer Free Writing Prospectus(es) issued at or
prior to the Applicable Time, the Base Prospectus (which is the most recent Statutory Prospectus distributed to investors generally),
the information stated in Schedule A to this Agreement to be included in the General Disclosure Package, all considered together
(collectively, the “General Disclosure Package”), nor (ii) any individual Limited Use Issuer Free Writing Prospectus,
when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus or any Issuer
Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by any Placement Agent
through the Representative specifically for use therein, it being understood and agreed that the only such information furnished
by any Placement Agent consists of the information described as such in Section 8(b) hereof.

 

    3 

     

    

 

(e)       Issuer
Free Writing Prospectuses. 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 Securities 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 then contained in the Registration Statement or contain any untrue statement of material fact or omit to state
any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. 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 then contained in the
Registration Statement or as a result of which such Issuer Free Writing Prospectus, if republished immediately following such event
or development, would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (i) the
Company has promptly notified or will promptly notify the Representative and (ii) the Company has promptly amended or will promptly
amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

(f)        Form
S-3. The Company and the transactions contemplated by this Agreement meet the requirements for, and comply with the conditions
for the use of, Form S-3 under the Securities Act, including but not limited to Instruction I.B.6 of Form S-3.

 

(g)       Good
standing of the Company and Subsidiaries. Each of the Company and each Subsidiary (as defined below) has been duly organized
and is validly existing as a corporation in good standing (or the foreign equivalent thereof) under the laws of its jurisdiction
of organization. Each of the Company and each Subsidiary is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification
and has all power and authority necessary to own or hold its properties and to conduct the business in which it is engaged, except
where the failure to so qualify or have such power or authority (i) would not have, singularly or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of operations, assets or business or prospects of the Company
or any Subsidiary, taken as a whole, or (ii) impair in any material respect the ability of the Company to perform its obligations
under this Agreement or to consummate any transactions contemplated by this Agreement, the General Disclosure Package or the Prospectus
(any such effect as described in clauses (i) or (ii), a “Material Adverse Effect”). The Company does not own
or control, directly or indirectly, any corporations, partnerships, limited liability partnerships, limited liability companies,
associations or other entities. (each a “Subsidiary” and collectively “Subsidiaries”). The
Company has no “significant subsidiaries” for purposes of the Securities Laws.

 

    4 

     

    

 

(h)       Securities.
The Securities and all other outstanding shares of capital stock of the Company have been duly authorized; the authorized equity
capitalization of the Company is as set forth in the General Disclosure Package and the Final Prospectus; all outstanding shares
of capital stock of the Company are, and, when the Securities have been delivered and paid for in accordance with this Agreement
on the Closing Date, such Securities will have been, validly issued, fully paid and nonassessable, will conform to the information
in the General Disclosure Package and to the description of such Securities contained in the Final Prospectus; the stockholders
of the Company have no preemptive rights with respect to the Common Stock; and none of the outstanding shares of capital stock
of the Company have been issued in violation of any preemptive or similar rights of any security holder. All the outstanding shares
of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable and, except
to the extent set forth in the General Disclosure Package and the Final Prospectus, are owned by the Company directly or indirectly
through one or more wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance, security interest, restriction upon
voting or transfer or any other claim of any third party.

 

(i)        No
Finder’s Fee. Except as disclosed in the General Disclosure Package and the Final Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any
Placement Agent for a brokerage commission, finder’s fee or other like payment in connection with this offering.

 

(j)        Registration
Rights. There are no contracts, agreements or understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include such securities in the securities registered pursuant to a Registration
Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act
(collectively, “registration rights”), except those registration rights that have been waived in accordance
with their terms and all applicable law.

 

(k)       Listing.
The Securities have been approved for listing on The NASDAQ Global Market (“Nasdaq”), subject to notice of issuance.
The Company is in compliance with all applicable corporate governance requirements set forth in the Nasdaq Marketplace Rules that
are then in effect and is actively taking steps to ensure that it will be in compliance with other applicable corporate governance
requirements set forth in the Nasdaq Marketplace Rules not currently in effect upon and all times after the effectiveness of such
requirements.

 

(l)        Audit
Opinion. Marcum LLP has provided an audit opinion concerning the Company’s financial statements and schedules, if any,
for the periods set forth in the General Disclosure Package and the Final Prospectus in such report and included or incorporated
by reference in the Registration Statement, the General Disclosure Package and the Final Prospectus, has audited the Company’s
financial statements and is an independent registered public accounting firm as required by the Securities Act and the Rules and
Regulations and the Public Company Accounting Oversight Board (United States). Except as disclosed in the General Disclosure Package
and the Final Prospectus and as pre-approved in accordance with the requirements set forth in Section 10A of the Exchange Act,
Marcum LLP has not been engaged by the Company to perform any “prohibited activities” (as defined in Section
10A of the Exchange Act).

 

    5 

     

    

 

(m)      Minute
Books. The minute books of the Company and each Subsidiary have been made available to the Placement Agents and counsel for
the Placement Agents, and such books (i) contain a complete summary of all meetings and actions of the board of directors (including
each board committee) and stockholders of the Company and each Subsidiary since the time of its respective incorporation or organization
through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred
to in such minutes.

 

(n)       Absence
of Further Requirements. Except for the registration of the Securities under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state or foreign securities
laws, the Financial Industry Regulatory Authority (“FINRA”) and Nasdaq in connection with the issuance and sale
of the Securities by the Company, no consent, approval, authorization or order of, or filing, qualification or registration with,
any court or governmental agency or body, foreign or domestic, which has not been made, obtained or taken and is not in full force
and effect, is required for the execution, delivery and performance of this Agreement, the Subscription Agreements by the Company,
the offer or sale of the Securities or the consummation of the transactions contemplated hereby.

 

(o)       Title
to Property. Each of the Company and each Subsidiary has good and marketable title in fee simple to, or have valid rights to
lease or otherwise use, all items of real or personal property which are material to the business of the Company and any Subsidiary
in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singularly or in the
aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such
property by the Company or any Subsidiary; and all of the leases and subleases material to the business of the Company and any
Subsidiary, and under which the Company or any Subsidiary holds properties described in the General Disclosure Package and the
Final Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession
of the leased or subleased premises under any such lease or sublease.

 

(p)       Absence
of Defaults and Conflicts Resulting from Transaction. The execution, delivery and performance of this Agreement, the Subscription
Agreements by the Company, the issue and sale of the Securities by the Company and the consummation of the transactions contemplated
hereby will not (with or without notice or lapse of time or both) conflict with or result in a breach or violation of (i) any of
the terms or provisions of, constitute a default under, give rise to any right of termination or other right or the cancellation
or acceleration of any right or obligation or loss of a benefit under, or give rise to the creation or imposition of any lien,
encumbrance, security interest, claim or charge upon any property or assets of the Company or any Subsidiary pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or to which any of the property or assets of the Company or any Subsidiary is subject,
(ii) the provisions of the charter or by-laws of the Company or any Subsidiary, or (iii) to the Company’s knowledge, any
law, statute, rule, regulation, judgment, order or decree of any court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their properties or assets except in the case of clauses (i) and (iii)
of this paragraph, for such breaches, violations or defaults that would not individually or in the aggregate have a Material Adverse
Effect.

 

    6 

     

    

 

(q)       Absence
of Existing Defaults and Conflicts. Neither the Company nor any of its Subsidiaries is in violation of its respective charter
or by-laws or in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement,
covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any
of them is a party or by which any of them is bound or to which any of the properties of any of them is subject, except such defaults
that would not, individually or in the aggregate, have a Material Adverse Effect.

 

(r)        Authorization
of Agreement. The Company has the full right, power and authority to enter into this Agreement, each of the Subscription Agreements
and to perform and to discharge its obligations hereunder and thereunder; and each of this Agreement, the Subscription Agreements
have been duly authorized, executed and delivered by the Company, and constitutes the valid and binding obligations of the Company
enforceable in accordance with their respective terms. All corporate action required to be taken for the authorization, issuance
and sale of the Securities has been duly and validly taken.

 

(s)       Possession
of Licenses and Permits. Each of the Company and each Subsidiary possesses all licenses, certificates, authorizations and permits
issued by, and have made all declarations and filings with, the appropriate local, state, federal or foreign regulatory agencies
or bodies which are necessary or desirable for the ownership of its properties or the conduct of its businesses as described in
the General Disclosure Package and the Final Prospectus (collectively, the “Governmental Permits”) except where
any failures to possess or make the same, singularly or in the aggregate, would not have a Material Adverse Effect. Each of the
Company and each Subsidiary is in compliance with all such Governmental Permits; all such Governmental Permits are valid and in
full force and effect, except where the validity or failure to be in full force and effect would not, singularly or in the aggregate,
have a Material Adverse Effect. All such Governmental Permits are free and clear of any restriction or condition that are in addition
to, or materially different from those normally applicable to similar licenses, certificates, authorizations and permits. Neither
the Company nor any Subsidiary has received notification of any revocation or modification (or proceedings related thereto) of
any such Governmental Permit and the Company has no reason to believe that any such Governmental Permit will not be renewed.

 

    7 

     

    

 

(t)        Absence
of Labor Dispute. No labor disturbance by the employees of the Company or any Subsidiary exists or, to the best of the Company’s
knowledge, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its
or any Subsidiary’s principal suppliers, manufacturers, customers or contractors, that could reasonably be expected, singularly
or in the aggregate, to have a Material Adverse Effect. The Company is not aware that any key employee or significant group of
employees of the Company or any Subsidiary plans to terminate employment with the Company or any Subsidiary.

 

(u)       Possession
of Intellectual Property. Each of the Company and each Subsidiary owns or possesses the right to use all patents and patent
applications, trademarks, trademark registrations and applications, service marks, service mark registrations and applications,
tradenames, copyrights, copyright registrations and applications, licenses, inventions, software, databases, know-how, Internet
domain names, trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures,
and other intellectual property (collectively, “Intellectual Property”) necessary to conduct their respective
businesses as currently conducted, and as proposed to be conducted and described in the General Disclosure Package and the Final
Prospectus, and the Company is not aware of any claim to the contrary or any challenge by any other person or entity to the rights
of the Company or any Subsidiary with respect to the foregoing except for those in the General Disclosure Package and the Final
Prospectus or those that could not have a Material Adverse Effect. The Intellectual Property licenses described in the General
Disclosure Package and the Final Prospectus are valid, binding upon, and enforceable by or against the parties thereto in accordance
with their terms. Each of the Company and each Subsidiary has complied in all material respects with, and is not in breach nor
has received any asserted or threatened claim of breach of, any Intellectual Property license, and the Company has no knowledge
of any breach or anticipated breach by any other person or entity to any Intellectual Property license. To the Company’s
knowledge, the Company’s and each Subsidiary’s respective businesses as now conducted and as proposed to be conducted
does not and will not infringe, misappropriate or otherwise violate or conflict with any valid patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses or other Intellectual Property or franchise right of any person or entity. No
claim has been made against the Company or any Subsidiary alleging the infringement, misappropriation or other violation by the
Company or any Subsidiary of any patent, trademark, service mark, trade name, copyright, trade secret, license or other Intellectual
Property or franchise right of any person or entity. Each of the Company and each Subsidiary has taken all reasonable steps to
protect, maintain and safeguard its rights in all Intellectual Property, including the execution of appropriate nondisclosure and
confidentiality agreements. To the Company’s knowledge, all Intellectual Property owned by the Company and/or each Subsidiary
is valid and enforceable. The consummation of the transactions contemplated by this Agreement will not result in the loss or impairment
of or payment of any additional amounts with respect to, nor require the consent of any other person or entity in respect of, the
Company or any Subsidiary’s right to own, use, or hold for use any of the Intellectual Property as owned, used or held for
use in the conduct of their respective businesses as currently conducted. With respect to the use of the software in the Company
or any Subsidiary’s business as it is currently conducted, neither the Company nor any Subsidiary has experienced any material
defects in such software including any material error or omission in the processing of any transactions other than defects which
have been corrected. The Company and each Subsidiary have at all times complied with all applicable laws relating to privacy, data
protection, and the collection and use of personal information collected, used, or held for use by the Company and any Subsidiary
in the conduct of the Company and each Subsidiary’s business. No claims have been asserted or threatened against the Company
or any Subsidiary alleging a violation of any person’s privacy or personal information or data rights and the consummation
of the transactions contemplated hereby will not breach or otherwise cause any violation of any law related to privacy, data protection,
or the collection and use of personal information collected, used, or held for use by the Company or any Subsidiary in the conduct
of the Company’s or any Subsidiary’s business. Each of the Company and each Subsidiary takes reasonable measures to
ensure that such information is protected against unauthorized access, use, modification, or other misuse, except for those that
would not have a Material Adverse Effect.

 

    8 

     

    

 

(v)       Environmental
Laws. Each of the Company and each Subsidiary is in compliance with all foreign, federal, state and local rules, laws, regulations
and permits relating to the use, treatment, storage, disposal or release of hazardous or toxic substances or wastes or protection
of health and safety or the environment (“Environmental Laws”) which are applicable to the Company or its Subsidiaries
or their respective businesses or properties, except where the failure to comply would not, singularly or in the aggregate, have
a Material Adverse Effect. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission,
or release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any Subsidiary
(or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or any Subsidiary is or may otherwise
be liable) upon any of the property now or previously owned or leased by the Company or any Subsidiary, or upon any other property,
in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law,
statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or in the aggregate with all such violations and liabilities,
a Material Adverse Effect; and there has been no disposal, discharge, emission or release of any kind onto such property or into
the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the
Company has knowledge, except for any such disposal, discharge, emission, or release of any kind which would not have, singularly
or in the aggregate with all such disposals, discharges, emissions and releases, a Material Adverse Effect. There are no costs
or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, any related constraints on operating activities and
any potential liabilities or fines to third parties, including governmental authorities) which would, singularly or in the aggregate,
have a Material Adverse Effect.

 

(w)      Accurate
Disclosure. The statements in the General Disclosure Package and the Final Prospectus under the headings “Description
of Securities that May Be Offered”, insofar as such statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings and present the
information required to be shown.

 

    9 

     

    

 

(x)       No
Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would
cause the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act which would require
the registration of any such securities under the Securities Act.

 

(y)       Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in either the General Disclosure Package or the Final Prospectus has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.

 

(z)       FINRA.
Neither the Company nor any Subsidiary nor any of their affiliates (within the meaning of FINRA’s Conduct Rule 5121(f)(1))
directly or indirectly controls, is controlled by, or is under common control with, or is an associated person (within the meaning
of Article I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.

 

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

 

(bb)     Statistical and Market-Related
Data. Any third-party statistical and market-related data included or incorporated by reference in a Registration Statement,
a Statutory Prospectus or the General Disclosure Package are based on or derived from sources that the Company believes to be reliable
and accurate.

 

(cc)     Internal Controls and
Compliance with the Sarbanes-Oxley Act. Each of the Company and each Subsidiary maintains a system of internal accounting and
other 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
conformity with generally accepted accounting principles in the United States (“GAAP”) and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. Except as described in the General Disclosure Package and the Final Prospectus, since the
end of the Company’s most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting. The Company is in compliance with all applicable provisions of Sarbanes-Oxley and all applicable rules and
regulations promulgated thereunder or implementing the provisions thereof that are presently in effect and is actively taking steps
to ensure that it will be in compliance with other applicable provisions of Sarbanes-Oxley not currently in effect upon it and
at all times after the effectiveness of such provisions.

 

    10 

     

    

 

(dd)     Litigation. Except
as set forth in the General Disclosure Package and the Final Prospectus, there is no legal or governmental action, suit, claim
or proceeding pending to which the Company or any Subsidiary is a party or of which any property or assets of the Company or any
Subsidiary is the subject which is required to be described in the Registration Statement, the General Disclosure Package or the
Final Prospectus or a document incorporated by reference therein and is not described therein, or which, singularly or in the aggregate,
if determined adversely to the Company or any Subsidiary, could have a Material Adverse Effect or prevent the consummation of the
transactions contemplated hereby; and to the best of the Company’s knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.

 

(ee)     Financial Statements.
The financial statements, together with the related notes and schedules, included or incorporated by reference in the General Disclosure
Package, the Final Prospectus and in each Registration Statement fairly present the financial position and the results of operations
and changes in financial position of the Company and its Subsidiary at the respective dates or for the respective periods therein
specified. Such statements and related notes and schedules have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved except as may be set forth in the related notes included or incorporated by reference in the General
Disclosure Package. The financial statements, together with the related notes and schedules, included or incorporated by reference
in the General Disclosure Package and the Final Prospectus comply in all material respects with the Securities Act, the Exchange
Act, and the Rules and Regulations and the rules and regulations under the Exchange Act. No other financial statements or supporting
schedules or exhibits are required by the Securities Act or the Rules and Regulations to be described, or included or incorporated
by reference in the Registration Statement, the General Disclosure Package or the Prospectus. There is no pro forma or as adjusted
financial information which is required to be included or incorporated by reference in the Registration Statement, the General
Disclosure Package, or and the Final Prospectus in accordance with the Securities Act and the Rules and Regulations which has not
been included or incorporated as so required. The pro forma and pro forma as adjusted financial information and the related notes,
if any, included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Final Prospectus
have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Rules and
Regulations and present fairly the information shown therein, and the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.

 

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(ff)      No Material Adverse
Change in Business. Neither the Company nor any Subsidiary has sustained, since the date of the latest audited financial statements
included or incorporated by reference in the General Disclosure Package, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the General Disclosure Package; and, since such date, there
has not been any material change in the capital stock or long-term debt of the Company or any Subsidiary, or any material adverse
changes, or any development involving a prospective material adverse change, in or affecting the business, assets, general affairs,
management, financial position, prospects, stockholders’ equity or results of operations of the Company or any Subsidiary
otherwise than as set forth or contemplated in the General Disclosure Package and the Final Prospectus.

 

(gg)     Investment Company
Act. Neither the Company nor any Subsidiary is or, after giving effect to the offering of the Securities and the application
of the proceeds thereof as described in the General Disclosure Package and the Final Prospectus, will become an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.

 

(hh)     Ratings. No “nationally
recognized statistical rating organization” as such term is defined is defined in Section 3(a)(62) of the Exchange Act (i)
has imposed (or has informed the Company that it is considering imposing) any condition (financial or otherwise) on the Company’s
retaining any rating assigned to the Company or any securities of the Company or (ii) has indicated to the Company that it is considering
any of the actions described in Section 7(c)(ii) hereof.

 

(ii)       Taxes.
Each of the Company and each Subsidiary (i) has timely filed all necessary federal, state, local and foreign tax returns or has
duly obtained extensions of time for the filing thereof, and all such returns were true, complete and correct, (ii) has paid all
federal, state, local and foreign taxes, assessments, governmental or other charges due and payable for which it is liable, including,
without limitation, all sales and use taxes and all taxes which the Company or any Subsidiary is obligated to withhold from amounts
owing to employees, creditors and third parties, and (iii) does not have any tax deficiency or claims outstanding or assessed or,
to the best of its knowledge, proposed against any of them, except those, in each of the cases described in clauses (i), (ii) and
(iii) of this paragraph, that would not, singularly or in the aggregate, have a Material Adverse Effect. Each of the Company and
each Subsidiary has not engaged in any transaction which is a corporate tax shelter or which could be characterized as such by
the Internal Revenue Service or any other taxing authority. The accruals and reserves on the books and records of the Company and
each Subsidiary in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments
and related liabilities for any such period, and since inception each of the Company and each Subsidiary has not incurred any liability
for taxes other than in the ordinary course.

 

(jj)       PFIC Status. The
Company was not a “passive foreign investment company” (“PFIC”) as defined in Section 1297 of the
United States Internal Revenue Code of 1986, as amended (the “Code”), for its most recently completed taxable
year and, based on the Company’s current projected income, assets and activities, the Company does not expect to be classified
as a PFIC for any subsequent taxable year.

 

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(kk)     ERISA. No “prohibited
transaction” (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code
of 1986, as amended from time to time (the “Code”)) or “accumulated funding deficiency” (as
defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to
which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably be expected
to occur with respect to any employee benefit plan of the Company or any Subsidiary which could, singularly or in the aggregate,
have a Material Adverse Effect. Each employee benefit plan of the Company or any Subsidiary is in compliance in all material respects
with applicable law, including ERISA and the Code. Each of the Company and each Subsidiary has not incurred and could not reasonably
be expected to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan
(as defined in ERISA). Each pension plan for which the Company and each Subsidiary would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or by failure to act,
which could, singularly or in the aggregate, cause the loss of such qualification.

 

(ll)       FCPA. Neither the
Company nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company is aware of or
has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder; and the Company and, to the knowledge of the Company, its affiliates
have instituted and maintain policies and procedures reasonably designed to ensure continued compliance therewith.

 

(mm)   Office of Foreign Assets
Control. Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the
Company 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 of the Securities
contemplated hereby, 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.

 

(nn)    No Unlawful Payments.
Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or
any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; or (iii) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

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(oo)    Margin
Securities. Neither the Company nor any Subsidiary owns any “margin securities” as that term is defined in Regulation
U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds
of the sale of the Securities will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security,
for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security
or for any other purpose which might cause any of the Securities to be considered a “purpose credit” within the meanings
of Regulation T, U or X of the Federal Reserve Board.

 

(pp)     Anti-Money Laundering.
The operations of the Company are and have been conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any governmental 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 or non-governmental
authority involving the Company with respect to the Money Laundering Laws is pending or, to the Company’s knowledge, threatened.

 

(qq)     Intentionally Omitted.

 

(rr)      Insurance. Each
of the Company and each Subsidiary carries, or is covered by, insurance provided by recognized, financially sound and reputable
institutions with policies in such amounts and covering such risks as is adequate for the conduct of its business and the value
of its properties and as is customary for companies engaged in similar businesses in similar industries. The Company has no reason
to believe that it or any Subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire
or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not result in a Material Adverse Effect.

 

(ss)     Outstanding Loans.
There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees
or indebtedness by the Company or any Subsidiary to or for the benefit of any of the officers or directors of the Company, any
Subsidiary or any of their respective family members, except as disclosed in the Registration Statement, the General Disclosure
Package and the Final Prospectus. All transactions by the Company with office holders or control persons of the Company have been
duly approved by the board of directors of the Company, or duly appointed committees or officers thereof.

 

(tt)       XBRL Language.
The interactive data in eXtensible Business Reporting Language included as an exhibit to any document incorporated by reference
into the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance
with the Commission’s rules and guidelines applicable thereto.

 

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

 

3.             Agreement
to Act as Placement Agents.

 

(a)       On
the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, the Company
engages the Placement Agents, on a commercially reasonable efforts basis, to act as its exclusive placement agents and the Representative,
as the representative of the Placement Agents in connection with the offer and sale, by the Company, of the Securities to the Purchasers.
The Placement Agents may retain other brokers or dealers to act as sub-agents on their respective behalf in connection with the
offering and sale of the Securities. Until the earlier of the Closing Date (as defined in Section 4 hereof) or the termination
of this Agreement, the Company shall not, without the prior consent of the Representative on behalf of the Placement Agents, solicit
or accept offers to purchase the Securities otherwise than through the Placement Agents.

 

(b)       The
Company expressly acknowledges and agrees that the Placement Agents’ obligations hereunder are on a commercially reasonable
efforts basis, and this Agreement shall not give rise to any commitment by the Placement Agents or any of their affiliates to underwrite
or purchase any of the Securities or otherwise provide any financing. No Placement Agent shall have authority to bind the Company
in respect of the sale of any Securities. The sale of the Securities may be made pursuant to the Subscription Agreements or Final
Prospectus.

 

(c)       Each
Placement Agent shall make commercially reasonable efforts to assist the Company in obtaining performance by each Purchaser whose
offer to purchase Securities has been solicited by such Placement Agent and accepted by the Company, but the Placement Agents shall
not, except as otherwise provided in this Agreement, be obligated to disclose the identity of any potential Purchaser or have any
liability to the Company in the event any such purchase is not consummated for any reason. Under no circumstances will any Placement
Agent be obligated to purchase any Securities for its own account and, in soliciting purchases of Securities, the Placement Agents
shall act solely as the Company’s agent and not as a principal. Notwithstanding the foregoing and except as otherwise provided
in Section 3(d), it is understood and agreed that each Placement Agent (or its affiliates) may, solely at its discretion and without
any obligation to do so, purchase Securities as a principal; provided, however, that any such purchases by such Placement Agent
(or its affiliates) shall be fully disclosed to the Company (including the identity of such Investors) and approved by the Company
in accordance with Section 3(d).

 

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(d)       Subject
to the provisions of this Section 3, offers for the purchase of Securities may be solicited by any Placement Agent as agent for
the Company at such times and in such amounts as such Placement Agent deems advisable. Each Placement Agent shall communicate to
the Company, orally or in writing, each reasonable offer to purchase Securities received by it as agent of the Company. The Company
shall have the sole right to accept offers to purchase Securities and may reject any such offer, in whole or in part. Each Placement
Agent shall have the right, in its discretion, subject to providing prior notice to the Company, to reject any offer to purchase
Securities received by it, in whole or in part, and any such rejection shall not be deemed a breach of its agreement contained
herein.

 

(e)       As
compensation for services rendered, on the Closing Date, the Company shall pay to the Placement Agents by wire transfer of immediately
available funds to an account or accounts designated by the Placement Agents, an aggregate amount based on a certain percentage
of the gross proceeds received by the Company from the sale of Securities on the Closing Date as set forth on Schedule A hereto
(the “Agency Fee”). Each Placement Agent agrees that the foregoing compensation, together with any expense reimbursement
payable hereunder, constitutes all of the compensation that such Placement Agent shall be entitled to receive in connection with
the offering contemplated hereby; such compensation shall supersede, in all respects, any and all prior agreements or understandings
relating to compensation to be received by such Placement Agent from the Company in connection with the offering contemplated hereby.

 

(f)        No
Securities which the Company has agreed to sell pursuant to this Agreement shall be deemed to have been purchased and paid for,
or sold by the Company, until such Securities shall have been delivered to the Purchaser thereof against payment by such Purchaser.
If the Company shall default in its obligations to deliver Securities to a Purchaser whose offer it has accepted and from whom
subscription proceeds have been received, the Company shall indemnify and hold the Placement Agents harmless against any loss,
claim or damage arising from or as a result of such default by the Company.

 

4.            Payment
and Delivery. Subject to the terms and conditions hereof, payment of the purchase price for, and delivery of the Securities
shall be made at the offices of Sheppard, Mullin, Richter & Hampton LLP (or at such other place as shall be agreed upon by
the parties), by 5:00 P.M., New York City time, on March 19, 2018 (unless another time shall be agreed to by the parties, such
time herein referred to as the “Closing Date”). Subject to the terms and conditions hereof, payment of the purchase
price for the Securities shall be made to the Company in the manner set forth below by Federal Funds wire transfer, against delivery
of the Securities to such persons, and shall be registered in such name or names and shall be in such denominations, as the Representative
may request at least one business day before the Closing Date. Electronic transfer of the Securities shall be made on the Closing
Date in such names and in such denominations as the Representative shall specify. Deliveries of the documents with respect to the
purchase of the Securities, if any, shall be made at the offices of counsel to the Representative. All actions taken on the Closing
Date shall be deemed to have occurred simultaneously.

 

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5.            Certain
Agreements of the Company. The Company agrees with the several Placement Agents that:

 

(a)       Filing
of Prospectuses. The Company has filed or will file each Statutory Prospectus (including the Final Prospectus) pursuant to
and in accordance with Rule 424(b)(2) (or, if applicable and consented to by the Representative, subparagraph (5)) not later than
the second business day following the earlier of the date it is first used or the execution and delivery of this Agreement. The
Company has complied and will comply with Rule 433 to the extent applicable.

 

(b)       Filing
of Amendments; Response to Commission Requests. The Company will promptly advise the Representative of any proposal to amend
or supplement the Registration Statement or any Statutory Prospectus at any time, will offer the Representative a reasonable opportunity
to comment on any such amendment or supplement and will not file any such proposed amendment or supplement to which you reasonably
object; and the Company will also advise the Representative promptly of (i) the filing of any such amendment or supplement, (ii)
any request by the Commission or its staff for any amendment to the Registration Statement, for any supplement to any Statutory
Prospectus or for any additional information, (iii) the institution by the Commission of any stop order proceedings in respect
of the Registration Statement or the threatening of any proceeding for that purpose, and (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the Securities in any jurisdiction or the institution or threatening
of any proceedings for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop
order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.

 

(c)       Continued
Compliance with Securities Laws. If, at any time when a prospectus relating to the Securities is (or but for the exemption
in Rule 172 would be) required to be delivered under the Act, any event occurs as a result of which the Final Prospectus as then
amended or supplemented would include an 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 is necessary at
any time to amend the Registration Statement or supplement the Final Prospectus to comply with the Act, the Company will promptly
notify the Representative of such event so that any use of the General Disclosure Package may cease until it is amended or supplemented
and will promptly prepare and file with the Commission and furnish, at its own expense, to the Placement Agents and the dealers
and any other dealers in such quantities as the Representative may reasonably request, an amendment or supplement which will correct
such statement or omission or an amendment which will effect such compliance. Neither the Representative’s consent to, nor
the Placement Agents’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 7 hereof.

 

(d)       Rule
158. As soon as practicable, but not later than 16 months, after the date of this Agreement, the Company will make generally
available to its securityholders an earnings statement covering a period of at least 12 months beginning after the date of this
Agreement and satisfying the provisions of Section 11(a) of the Act and Rule 158.

 

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(e)       Furnishing
of Prospectuses. The Company will furnish to the Representative copies of the Registration Statement, including all exhibits,
any Statutory Prospectus, the Final Prospectus and all amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Representative reasonably requests. The Company will pay the expenses of printing and distributing
to the Placement Agents all such documents.

 

(f)        Blue
Sky Qualifications. The Company will arrange for the qualification of the Securities for sale under the laws of such jurisdictions
as the Representative designates and will continue such qualifications in effect so long as required for the distribution.

 

(g)       Reporting
Requirements. During the period of 3 years hereafter, the Company will furnish to the Representative and, upon request, to
each of the other Placement Agents, as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders
for such year; and the Company will furnish to the Representative (i) as soon as available, a copy of each report and any definitive
proxy statement of the Company filed with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as the Representative may reasonably request. However, so long as the Company
is subject to the reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is timely filing reports
with the Commission on its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”), it is not required
to furnish such reports or statements to the Placement Agents.

 

(h)       Payment
of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including
but not limited all expenses incident to the performance of the obligations of the Company under this Agreement, including, but
not limited to: (a) all filing fees relating to the registration of the
Shares to be sold in the Offering with the Commission; (b) all actual FINRA Public Offering System filing fees associated with
the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Shares on the NASDAQ Capital Market
(d) [Intentionally omitted.] ; (e) all fees, expenses and disbursements relating to the registration, qualification or exemption
of such Shares under the securities laws of such foreign jurisdictions as the Representative may reasonably designate with advance
notice to and consent from the Company; (f) the costs of all mailing and printing of the underwriting documents (including, without
limitation, the Placement Agency Agreement, any Blue Sky Surveys and, if appropriate, any Selected Dealers’ Agreement, and
Placement Agents’ Questionnaire), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto
and as many final Prospectuses as the Representative may reasonably deem necessary; (g) the costs of preparing, printing and delivering
certificates representing the Shares; (h) fees and expenses of the transfer agent for the Common Stock; (i) stock transfer and/or
stamp taxes, if any, payable upon the transfer of securities from the Company to the Representative; (j) the fees and expenses
of the Company’s accountants; and (k) the fees and expenses of the Company’s legal counsel and other agents and representatives.
The Representative may deduct from the net proceeds of the Offering payable to the Company at Closing the actual and accountable
out-of-pocket expenses, subject to a cap on such actual and accountable
out-of-pocket expenses of $60,000 in the aggregate (the “Cap”), to be paid by the Company to the Placement
Agents, less the Advance (as such term is defined in Section 9 hereof), provided, however, that in the event that the Offering
is terminated, the Company agrees to reimburse the Placement Agents pursuant to Section 9 hereof.

 

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(i)        Use
of Proceeds. The Company will use the net proceeds received in connection with this offering in the manner described in the
“Use of Proceeds” section of the General Disclosure Package and, except as disclosed in the General Disclosure Package
and the Final Prospectus, the Company does not intend to use any of the proceeds from the sale of the Securities hereunder to repay
any outstanding debt owed to any affiliate of any Placement Agent.

 

(j)        Absence
of Manipulation. Neither the Company, nor any Subsidiary nor, to the Company’s knowledge, any of the Company’s
or any Subsidiary’s officers, directors or affiliates has taken or will take, directly or indirectly, any action designed
or intended to stabilize or manipulate the price of any security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company.

 

(k)       Restriction
on Sale of Securities. For the period specified below (the “Lock-Up Period”), neither the Company nor any
officer or director will, directly or indirectly, take any of the following actions with respect to the Common Stock or any securities
convertible into or exchangeable or exercisable for any shares of Common Stock (“Lock-Up Securities”): (i) offer,
sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up Securities, (ii) offer, sell, issue, contract to sell, contract
to purchase or grant any option, right or warrant to purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other
agreement that transfers, in whole or in part, the economic consequences of ownership of Lock-Up Securities, (iv) establish or
increase a put equivalent position or liquidate or decrease a call equivalent position in Lock-Up Securities within the meaning
of Section 16 of the Exchange Act or (v) file with the Commission a registration statement under the Act relating to Lock-Up Securities,
or publicly disclose the intention to take any such action, without the prior written consent of the Representative. The restrictions
set forth in this Section (k) shall not apply to (A) the sale of the Securities to the Purchasers; (B) the issuance of restricted
Common Stock or options to acquire Common Stock pursuant to the Company’s employee benefit plans, qualified stock option
plans or other employee compensation plans as such plans are in existence on the date hereof and described in the Pricing Disclosure
Package and Final Prospectus, (C) the issuance of Common Stock pursuant to valid exercises of options, warrants or rights outstanding
on the date hereof, (D) the issuance by the Company of any Common Stock or securities convertible into or exchangeable for Common
Stock as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring after the dates
of this Agreement; provided that each recipient of Common Stock pursuant to this clause (D) agrees that all such shares remain
subject to restrictions substantially similar to those contained in this paragraph (k); or (E) the purchase or sale of the Company’s
securities pursuant to a plan, contract or instruction that satisfies the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect
prior to the date hereof. The Lock-Up Period will commence on the date hereof and continue for two months after the date hereof
or such earlier date that the Representative consents to in writing.

 

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6.            Free
Writing Prospectuses. The Company represents and agrees that, unless it obtains the prior consent of the Representative, and
each Placement Agent 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 Securities that would constitute an Issuer Free Writing Prospectus, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the
Commission. Any such free writing prospectus consented to by the Company and the Representative is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company represents that it has treated and agrees that it will treat
each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied
and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely
Commission filing where required, legending and record keeping.

 

7.            Conditions
of the Obligations of the Placement Agents. The obligations of the Placement Agents hereunder will be subject to the accuracy
of the representations and warranties of the Company herein (as though made as of the Applicable Time and on the Closing Date),
to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder and to the following additional conditions precedent:

 

(a)       Intentionally
Omitted.

 

(b)       Filing
of Prospectus. The Final Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof. No stop order suspending the effectiveness of the Registration Statement or of any part thereof shall
have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or any Placement
Agent, shall be contemplated by the Commission.

 

    20 

     

    

 

(c)       No
Material Adverse Change. Subsequent to the execution and delivery of this Agreement, there shall not have occurred any of the
following: (i) trading in securities generally on the New York Stock Exchange, Nasdaq or the NYSE Amex or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended
or materially limited, or minimum or maximum prices or maximum range for prices shall have been established on any such exchange
or such market by the Commission, by such exchange or market or by any other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, (iii) the United States shall have become engaged
in hostilities, or the subject of an act of terrorism, or there shall have been an outbreak of or escalation in hostilities involving
the United States, or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall
have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Representative, impracticable
or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated in the General
Disclosure Package and the Final Prospectus. Since the date of the latest audited financial statements included in the General
Disclosure Package and the Final Prospectus or incorporated by reference in the General Disclosure Package and Final Prospectus
as of the date hereof, (i) neither the Company nor any Subsidiary shall have sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth in the General Disclosure Package and the Final Prospectus, and (ii) there
shall not have been any change in the capital stock or long-term debt of the Company nor any Subsidiary, or any change, or any
development involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders’
equity or results of operations of the Company and any Subsidiary, otherwise than as set forth in the General Disclosure Package
and Final Prospectus, the effect of which, in any such case described in clause (i) or (ii) of this sentence, is, in the judgment
of the Representative, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery
of the Stock on the terms and in the manner contemplated in the General Disclosure Package and the Final Prospectus. No action
shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental
agency or body which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially materially
and adversely affect the business or operations of the Company or any Subsidiary; and no injunction, restraining order or order
of any other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance
or sale of the Securities or materially and adversely affect or potentially materially and adversely affect the business or operations
of the Company or any Subsidiary.

 

(d)       Opinion
of Counsel for Company. The Representative shall have received an opinion and 10b-5 negative assurance letter, each dated the
Closing Date, of Ellenoff, Grossman & Schole LLP, counsel for the Company, in the form set forth on Exhibit B.

 

(e)       Opinion
of IP Counsel for Company. The Representative shall have received an opinion letter, dated as of the applicable Closing Date,
of Terry Fokas, intellectual property counsel for the Company, in form and substance reasonably acceptable to the Representative
with respect to statements in the General Disclosure Package and the Prospectus regarding the Intellectual Property of the Company.

 

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(f)        Officer’s
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date, of its Chairman
of the Board, its President or a Vice President and its Chief Financial Officer stating that (i) such officers have carefully examined
the Registration Statement, the General Disclosure Package, any Permitted Free Writing Prospectus and the Final Prospectus and,
in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the date of this Agreement
and as of the Closing Date did not include any untrue statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading, and the General Disclosure Package, as of the
Applicable Time and as of the Closing Date, any Permitted Free Writing Prospectus as of its date and as of the Closing Date, the
Final Prospectus, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material
fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which
should have been set forth in a supplement or amendment to the Registration Statement, the General Disclosure Package or the Final
Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and (iv) there has not been,
subsequent to the date of the most recent audited financial statements included or incorporated by reference in the General Disclosure
Package and the Final Prospectus, any material adverse change in the financial position or results of operations of the Company
or any Subsidiary, or any change or development that, singularly or in the aggregate, would involve a material adverse change or
a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations, business,
assets or prospects of the Company or any Subsidiary, except as set forth in General Disclosure Package and the Final Prospectus.

 

(g)       Listing.
The Company shall have submitted an application to Nasdaq to approve the listing of the Securities.

 

(h)       No
Objection. FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the
placement agency terms and arrangements relating to the offering of the Securities.

 

The Company will furnish the Representative with such conformed
copies of such opinions, certificates, letters and documents as the Representative reasonably requests. The Representative may
in its sole discretion waive on behalf of the Placement Agents compliance with any conditions to the obligations of the Placement
Agents hereunder.

 

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8.            Indemnification
and Contribution.

 

(a)       Indemnification
of Placement Agents. The Company will indemnify and hold harmless each Placement Agent, its partners, members, directors, officers,
employees, agents, affiliates and each person, if any, who controls such Placement Agent within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act (each, an “Indemnified Party”), against any and all losses, claims, damages
or liabilities, joint or several, to which such Indemnified Party may become subject, under the Act, the Exchange Act, other federal
or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in
any part of the Registration Statement at any time, any Statutory Prospectus as of any time, the Final Prospectus or any Issuer
Free Writing Prospectus or (ii) the omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action,
litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened
or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished to the Company by any Placement Agent through the
Representative specifically for use therein, it being understood and agreed that the only such information furnished by any Placement
Agent consists of the information described as such in subsection (b) below.

 

(b)       Indemnification
of Company. Each Placement Agent will severally and not jointly indemnify and hold harmless the Company, each of its directors
and each of its officers who signs a Registration Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act (each, a “Placement Agent Indemnified Party”), against
any losses, claims, damages or liabilities to which such Placement Agent Indemnified Party may become subject, under the Act, the
Exchange Act, other federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in any part of the Registration Statement at any time, any Statutory Prospectus as of any time, the Final Prospectus,
or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or the alleged omission of 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 reliance upon
and in conformity with written information furnished to the Company by such Placement Agent through the Representative specifically
for use therein, and will reimburse any legal or other expenses reasonably incurred by such Placement Agent Indemnified Party in
connection with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or
proceeding whatsoever (whether or not such Placement Agent Indemnified Party is a party thereto), whether threatened or commenced,
based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred,
it being understood and agreed that the only such information furnished by any Placement Agent consists of the following information
in the Final Prospectus furnished on behalf of each Placement Agent: the paragraph entitled “Passive Market Making”
under the caption “Plan of Distribution”.

 

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(c)       Actions
against Parties; Notification. Promptly after receipt by an indemnified party under this Section of notice of the commencement
of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection
(a) or (b) above, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall
not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to
notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof except as set forth below. Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ
one separate counsel (and one local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying party. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless
such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject
matter of such action 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 an indemnified party.

 

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(d)       Contribution.
If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Placement Agents on the other from the offering
of the Securities; provided, however, that in no case shall any Placement Agent be responsible for any contribution in an amount
in excess of the placement agent fees and commissions applicable to the Securities purchased by the Purchasers hereunder. If the
allocation provided above 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 Placement Agents on the other in
connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the Company on the one hand and the Placement Agents on the
other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total placement agent fees and commissions received by the Placement Agents. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the Company or the Placement Agents and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence
of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the subject of this subsection (d). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Placement Agents’ obligations in this subsection (d) to contribute
are several in proportion to their respective placement agent obligations and not joint. The Company and the Placement Agents agree
that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even
if the Placement Agents 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 in this Section 8(d).

 

9.            Termination.
The term of the Placement Agent’s exclusive engagement will be until the earlier of the completion of the offer and sale,
by the Company, of the Securities to the Purchasers and March 21, 2018. The Representative may terminate this Agreement by notice
given to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on, or by, as the case may be, on the New York Stock Exchange or the NASDAQ Global
Select Market, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred,
(iv) any moratorium on commercial banking activities shall have been declared by the United States Federal Government or New York
State, or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets, currency
exchange rates or controls or any calamity or crisis that, in the Representative’s judgment, is material and adverse and
which, singly or together with any other event specified in this clause (v), makes it, in the Representative’s judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the manner contemplated
in the General Disclosure Package. Notwithstanding anything to the contrary in this Agreement in the event that this Agreement
shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the
terms herein, the Company shall be obligated to pay to the Placement Agents their actual and accountable out-of-pocket expenses
related to the transactions contemplated herein then due and payable (including the fees and disbursements of counsel), and upon
demand the Company shall pay the full amount thereof, subject to the Cap, to the Representative on behalf of the Placement Agents;
provided, however, that any payment in accordance with this Section shall
in no way limit or impair the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing,
any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance
with FINRA Rule 5110(f)(2)(C).

 

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10.          Survival
of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements
of the Company or its officers and of the several Placement Agents set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any
Placement Agent, the Company or any of their respective representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Securities. If the sale of the Securities provided for herein is not consummated for any
reason other than solely by reason of a default by any of the Placement Agents, the Company will reimburse the Placement Agents
for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Securities, and the respective obligations of the Company and the Placement Agents pursuant to Section 8 hereof
shall remain in effect. In addition, if any Securities have been purchased hereunder, the representations and warranties in Section
2 and all obligations under Section 5 shall also remain in effect.

 

11.          Notices.
All communications hereunder will be in writing and, if sent to the Placement Agents, will be mailed, delivered or telegraphed
and confirmed to the Representative at Laidlaw & Company (UK) Ltd., 546 Fifth Avenue, 5th Floor, New York, NY 10036,
(fax: 212-297-0670), Attention: Investment Banking, or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at One Rockefeller Plaza, New York, New York 10020 Attention: Anthony Hayes, Chief Executive Officer, e-mail: anthonyhayes@me.com;
provided, however, that any notice to an Placement Agent pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed
to such Placement Agent.

 

12.          Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other person will have any right or obligation hereunder.

 

13.          Representation
of Placement Agents. The Representative will act for the several Placement Agents in connection with this financing, and any
action under this Agreement taken by the Representative will be binding upon all the Placement Agents.

 

14.          Waiver
of Jury Trial. The Company hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right
to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby

 

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15.          Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same Agreement.

 

16.          Absence
of Fiduciary Relationship. The Company acknowledges and agrees that:

 

(a)       No
Other Relationship. The Placement Agents have been retained solely to act as placement agents in connection with the sale of
Securities and that no fiduciary, advisory or agency relationship between the Company and the Placement Agents have been created
in respect of any of the transactions contemplated by this Agreement or the Final Prospectus, irrespective of whether the Placement
Agents have advised or are advising the Company on other matters;

 

(b)       Arms’
Length Negotiations. The price of the Securities set forth in this Agreement was established by the Company following discussions
and arms-length negotiations with the Placement Agents and the Company is capable of evaluating and understanding and understands
and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;

 

(c)       Absence
of Obligation to Disclose. The Company has been advised that the Placement Agents and their affiliates are engaged in a broad
range of transactions which may involve interests that differ from those of the Company and that the Placement Agents have no obligation
to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and

 

(d)       Waiver.
The Company waives, to the fullest extent permitted by law, any claims it may have against the Placement Agents for breach of fiduciary
duty or alleged breach of fiduciary duty and agrees that the Placement Agents shall have no liability (whether direct or indirect)
to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Company, including stockholders, employees or creditors of the Company.

 

17.          Headings.
The section headings in this Agreement are for the convenience of the parties only and will not affect the construction or interpretation
of this Agreement.

 

    27 

     

    

 

18.          Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced
in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to
such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 11 hereof. Such mailing shall be deemed personal service and shall be legal
and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating
to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.

 

[REMAINDER OF PAGE INTENTIONALLY OMITTED]

 

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If the foregoing is in accordance with
the Placement Agents’ understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several Placement Agents in accordance with its terms.

 

	 	Very truly yours,
	 	 
	 	
        SPHERIX INCORPORATED

	 	 
	 	By:	  /s/ Anthony Hayes
	 	 	Name: Anthony Hayes
	 	 	Title: Chief Executive Officer

 

	
        The foregoing Placement
Agency Agreement is hereby confirmed and accepted as of the date first above written.
	 
	 	 
	LAIDLAW & CO. (UK) LTD.	 
	 	 
	By:	  /s/ Hugh Regan	 
	 	Name: Hugh Regan	 
	 	Title: Executive Director	 
	 	 	 
	 	 Acting on behalf of itself and as the Representative of the several Placement
Agents.	 

 

 

    29

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