Document:

Exhibit

EXHIBIT 10.1
    

BUYING AGENCY AGREEMENT
Dated July 11, 2016
between
LANDS’ END, INC.
and 
INTERNATIONAL SOURCING & LOGISTICS LIMITED

BUYING AGENCY AGREEMENT
Date: July 11, 2016
This Buying Agency Agreement (“Agreement”) is entered between LANDS’ END, INC., a Delaware corporation (“LE”) and INTERNATIONAL SOURCING & LOGISTICS LIMITED, a Hong Kong corporation (“Agent). Agent and LE each are sometimes referred to as a “Party” and together sometimes are referred to as the “Parties.”
1.DEFINITIONS.  Certain terms are defined where they are first used below; while others are defined in Appendix #1 (Glossary). 

2.TERM.

(a)Initial Term.  The initial term of this Agreement (the “Initial Term”) will begin on July 11, 2016 (the “Effective Date”) and will end, unless terminated earlier or extended in accordance with Section 3, on March 31, 2017 (the “Expiration Date”). 

(b)Renewal Rights. 

i.Renewal Length. If LE achieves the Renewal Criteria set forth below, and LE gives written notice of its intention to extend the Agreement to Agent at least 90 days prior to the then current Expiration Date, the Expiration Date of this Agreement will extend for a one-year renewal period. LE may extend the Expiration Date for a maximum of three renewal periods (the “First Renewal Period” ending March 31, 2018; the “Second Renewal Period” ending March 31, 2019; and the “Third Renewal Period” ending March 31, 2020) as provided for above. The Initial Term, as extended or renewed as provided for in this Agreement, is referred to as the “Term.”

ii.Renewal Criteria. In order to extend the Expiration Date, LE must (collectively, the “Renewal Criteria”):

		
	A.
	Have earned and paid, for the year or pro-rated year prior to the deadline for providing the notice of intention to renew, the total Minimum Commission for that year or pro-rated year; and 

		
	B.
	Not be in breach of this Agreement.

3.TERMINATION.

(a)Termination for Cause.  Either LE or Agent may terminate this Agreement in the event of a material breach of this Agreement by the other party. If the breach is curable by the breaching party and the breaching party fails to cure the breach within 30 days following its receipt of written notice of the breach from the non-breaching party, then Termination is effective 30 days following the receipt of the notice of breach. If the breach is not curable by the breaching party, then Termination is effective upon the non-breaching party’s delivery of notice to the breaching party.

(b)Obligations upon Expiration or Termination.  Upon expiration or termination of this Agreement for any reason all amounts owed to Agent by LE will become due and payable per the terms of this Agreement.

4.APPOINTMENT.

(a)Appointment and Acceptance.  LE hereby appoints Agent to be its non-exclusive buying agent for the purchase of the Merchandise throughout the Territory, upon the terms and conditions contained in this Agreement, and Agent hereby accepts such appointment.

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(b)Agent Limitations.  During the course of its performance under this Agreement, Agent shall not represent itself as the legal representative of LE, or its Affiliates, for any purpose whatsoever. Agent acknowledges and understands that LE reserves the right to employ other agents to purchase Merchandise on its behalf and that LE may purchase the same or similar Merchandise directly from any Seller without utilizing Agent’s services. Agent further acknowledges and understands that: (i) Subject to its obligation to pay the Minimum Commission, LE is not obligated to purchase any quantity of Merchandise from any Seller identified by Agent and (ii) LE has the right to reject any Seller and restrict Agent’s dealing with those Sellers deemed acceptable to LE to the extent it involves procurement of Merchandise for LE under this Agreement. 

(c)Scope of Appointment.  Nothing in this Agreement prevents Agent from acting as a buying agent or performing the Services or similar services for any third-party, including Agent Affiliates. In accepting the appointment, Agent expressly disclaims any fiduciary obligations it has as an agent for LE and its only duty to LE is to perform the Services consistent with the standard of care outlined in Section 6(b).

5.BUYING AGENT SERVICES. 

(a)Service Description.  Agent shall perform the services detailed on Appendix #2 (Services) on behalf and at the direction of LE to the extent not prohibited by Applicable Law (the “Services”). Except as expressly stated on Appendix #2 (Services), in the event of any conflict or inconsistency between this Agreement and Appendix #2, this Agreement will control. Unless otherwise agreed in writing by the Parties, the Services to be provided by Agent under this Agreement are limited to those expressly stated herein.

(b)Modification of Services. This Agreement, and the Services, Commission and Expenses hereunder, may only be modified by a written amendment which must be signed by both parties to be effective. LE acknowledges that modifications to this Agreement will require certain internal approvals by Agent and therefore absent a signed written amendment LE will not rely (and any such reliance would be unreasonable) upon any proposed amendment or course of dealing by the parties. If a Party identifies a service that was previously provided by Agent that is not described in this Agreement but such Party believes that services should be included in this Agreement, it will notify the other party’s Contact Person and the Parties will work together to Good Faith to determine whether they wish to have such service added to this Agreement; any such addition will require a written amendment signed by both Parties to be effective. The Parties will include in such an amendment, if they agree to execute one, a description of the service, any modification to the Commissions, and allocation of Expenses for such Service.

(c)Limitation on Services.   Without LE’s express written consent, Agent shall at no time:

i.place an order for Merchandise to be produced by a Seller (all orders shall be placed directly by LE and any alteration from this requirement will require a written amendment to this Agreement, which must be signed by both parties to be effective);

ii.take or claim legal or equitable title to any Merchandise purchased by LE; 

iii.furnish to any Seller dies, molds, patterns, materials, artwork, engineering work, financial assistance, or any other assistance required for the production of Merchandise ordered by LE without the advance written approval of LE; or

iv.act in any other capacity for LE other than as a buying agent under the terms of this Agreement. 

(d)Disclosure of Contracting Entity.  In performance of its duties under this Agreement, 

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Agent shall act at all times at the direction of LE and shall identify LE to all parties with whom Agent deals. Agent shall also identify in writing to LE all parties to any transactions involving LE and their respective roles, including sub-agents of Agent, trading companies or representatives of trading companies, and Sellers (including their selling agents). 

(e)Related Party Transactions.   In any transaction where Agent and the Seller are related parties (as that term is defined in U.S. customs law), Agent shall provide documentation sufficient to establish that Agent is working as a buying agent on behalf of LE, and not as a selling agent on behalf of the Seller. For example, the documentation should demonstrate that (i) the terms of the transaction are similar to transactions involving unrelated Sellers, (ii) Agent is not taking title to the goods, (iii) Agent is performing the same services on behalf of LE for a transaction between LE and the related Seller as Agent would perform on behalf of LE for a transaction between LE and an unrelated Seller, (iv) the values charged are arm’s length and comparable to transactions involving unrelated Sellers, and (v) no portion of the price LE pays the related Seller inures to the benefit of Agent other than the Buying Commission attributable to the transaction. 

(f)Staffing.  Agent will assign sufficient numbers (in terms of head count and skill types) of personnel who will be performing Services for LE’s account (collectively, “LE Services Personnel”).  Except as may be approved by LE, each of the Key Personnel will be dedicated to the LE account.  Each of the LE Services Personnel will possess suitable competence, ability, education, training and other qualifications for the roles that Agent assigns to them in providing the Services. Upon request by LE, Agent shall identify by name all LE Services Personnel. Agent will use Good Faith efforts to minimize the turnover rate of LE Services Personnel, and if requested by LE, Agent will report to LE such turnover rate each month. 

(g)Key Personnel.  Agent shall fill the following positions (“Key Personnel”) with LE Services Personnel approved by LE in accordance with this Section 5(g): Color Manager, Senior Manager, Director, Senior Director, and Managing Director or, in each case, a person performing similar functions.   Agent will not at any time during the term of this Agreement designate other Key Personnel without LE’s prior written consent. Agent will provide LE with the resumes of prospective and deployed Key Personnel when requested by LE to enable LE to verify that each individual possesses the requisite skill levels appropriate to his or her proposed assignment. LE will have the right, but not the obligation, to interview, as LE deems necessary, and participate in the selection of, all prospective and deployed Key Personnel prior to being assigned to the LE account. Except in the event of termination, voluntary resignation, promotion, death, or disability, Agent will not reassign, transfer or remove any Key Personnel from involvement in the Services without obtaining the prior written approval of LE.  If any of the Key Personnel becomes unable to perform the functions or responsibilities assigned to him or her, or is no longer employed by Agent or an affiliate, Agent will identify, within two (2) months, and obtain LE’s approval of a qualified replacement for such Key Personnel.  If Agent desires to reassign, transfer or remove (for any reason) any Key Personnel from involvement of the Services, Agent will: (i) give LE as much advance notice as practicable, but in no event less than thirty (30) days’ notice, of such proposed reassignment, transfer or removal; and (ii) promptly identify and obtain LE’s approval of suitable replacement Key Personnel in a timely manner to allow adequate time (except in cases of removal due to termination, resignation without notice, death, or emergency disability leave) for appropriate training for such replacement and for an appropriate overlap period between the reassigned Key Personnel and his or her replacement.   Replacements for Key Personnel will also be deemed “Key Personnel.”

(h)Non-Hire.    During the term of the Agreement, LE will not, without the approval of Agent, solicit or hire Agent's employees; provided that such restriction: (i) will only apply to Agent's employees who have worked on LE's account within the previous two months, and (ii) will not apply to Agent's employees who have left Agent's employment before being offered a position by LE.   This provision, however, will not apply if Agent ceases to substantially perform its obligations under this Agreement, without regard to any cure period stated in Section 3(a).  In any event, any employee of Agent shall be 

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excused from the terms of any non-compete agreement if the employee accepts employment at LE.

		
	6.
	QUANTITY AND NATURE OF SERVICE.

(a)Quantity and Nature of Service.  Except as otherwise provided in Section 5 or this Section 6(a), there will be no material increase in the scope or level of, or use by, LE of Services during the Term (including changes requiring the hiring or training of additional employees by Agent) without the mutual written agreement of the parties and adjustments, if any, to the charges for such Services; provided, however, Agent may make changes from time to time in the manner of performing Services, subject to the other terms of this Agreement. The preceding sentence does not limit LE’s ability to adjust order volume, subject to its obligation for the Minimum Commission. LE will not resell any Services, provide the Services to any joint-venture or non-wholly owned subsidiary, or otherwise use the Services in any way other than in connection with the conduct of LE’s internal business. 

(b)Standard of Care.  Except as otherwise set forth in this Agreement, Agent does not assume any responsibility under this Agreement other than to render the Services in Good Faith, without willful misconduct or gross negligence, and will comply with all Applicable Laws in the performance of the Services. AGENT MAKES NO OTHER GUARANTEE, REPRESENTATION, OR WARRANTY OF ANY KIND (WHETHER EXPRESS OR IMPLIED) REGARDING ANY OF THE SERVICES PROVIDED HEREUNDER, AND EXPRESSLY DISCLAIMS ALL OTHER GUARANTEES, REPRESENTATIONS, AND WARRANTIES OF ANY NATURE WHATSOEVER, WHETHER STATUTORY, ORAL, WRITTEN, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. AGENT WILL ONLY BE OBLIGATED TO PROVIDE SERVICES IN A MANNER CONSISTENT WITH PRACTICES IN EFFECT IMMEDIATELY PRIOR TO THE EFFECTIVE DATE. 

(c)Responsibility For Errors; Delays. Agent’s sole responsibility to LE for errors or omissions in Services caused by will be to furnish correct information, payment or adjustment in the Services, and if such errors or omissions are solely or primarily caused by Agent, Agent will promptly furnish such corrections at no additional cost or expense to LE if LE promptly advises Agent of such error or omission. 

(d)Good Faith Cooperation; Alternatives. Agent and LE will use Good Faith efforts to cooperate with each other in all matters relating to the provision and receipt of the Services. If Agent reasonably believes it is unable to provide any Service because of a failure to obtain third-party contractor consents or because of impracticability, Agent will notify LE promptly after Agent becomes aware of such fact and the Parties will cooperate to determine the best alternative approach.

(e)Use of Third Parties. Agent may use any Affiliate or any unaffiliated third-party contractor to provide the Services; provided, however, that Agent shall at all times remain responsible for the third parties’ performance under this Agreement. Agent will use reasonable efforts to provide advance written notice to LE of unaffiliated third-party contractor that Agent will be using to perform factory visits or product testing of the Merchandise.

(f)Assets of LE.  During the Term, (i) Agent and its Affiliates and third-party contractors may use, at no charge, all of the software and other assets, tangible and intangible, of LE (together, the “Assets”) to the extent necessary to perform the Services, and (ii) LE will consult with Agent prior to upgrading or replacing any of the Assets that are necessary for Agent to provide the Services. The Parties will discuss whether Agent wishes to continue to provide the Services after such upgrade or replacement and the cost (to be borne by LE) for Agent to do so. Any agreement by the parties to such upgrade or replacement must be documented via an Amendment hereto, prior to it moving forward. Agent will continue to support at its own cost the Agent information systems necessary to access the Assets. If LE makes a change to the Assets that 

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prevent Agent from being able to access the Assets from Agent existing information systems, then Agent may suspend the Services.

(g)Ownership of Data and Other Assets.  Neither party will acquire any right, title or interest in any Asset that is owned or licensed by the other and used to provide the Services. All data provided by or on behalf of a party to the other party for the purpose of providing the Services will remain the property of the providing party. To the extent the provision of any Service involves intellectual property, including software or patented or copyrighted material, or material constituting trade secrets, neither party will copy, modify, reverse engineer, decompile or in any way alter any of such material, or otherwise use such material in a manner inconsistent with the terms and provisions of this Agreement, without the express written consent of the other party. All specifications, tapes, software, programs, services, manuals, materials, and documentation developed or provided by Agent and utilized in performing this Agreement, will be and remain the property of LE; however, they may not be sold, transferred, disseminated, or conveyed by LE to any other entity or used other than in performance of this Agreement without the express written permission of Agent. 

(h)LE Standards. Prior to the Effective Date, Agent and LE have collaborated on and jointly contributed to certain information, data, processes, procedures, standards and protocols, including but not limited to those standard operating procedures, testing protocols and all other Seller requirements available on LE’s Global Sourcing vendor website or as otherwise routinely provided by LE to its vendors (collectively, the “LE Standards”). LE shall own such LE Standards (and any modifications thereto made by the Parties), without an obligation to account to Agent.     

(i)Contact Person.  Each party will appoint a contact person (each, a “Contact Person”) to facilitate communications and performance under this Agreement. The initial Contact Person of each Party is set forth on Appendix #3 (Contact Persons). Each Party will have the right at any time and from time to time to replace its Contact Person by written notice to the other Party. 

7.OPERATIONAL OBLIGATIONS.

(a)Budget Development.  LE shall consult with Agent to jointly develop an annual budget for the Services, including allocation of Agent personnel and identification of “Key Personnel” as defined in Section 5(g), above, which allocation of personnel shall include the identification of  Key Personnel, travel expectations, and FOB forecast consistent with practices in effect immediately prior to the Effective Date.  To achieve this budget, LE shall supply Agent with such forecasting, and Agent shall develop a proposed budget for LE’s review within fifteen days of submission of the forecast.  LE and Agent shall meet quarterly to review (i) LE’s reporting information and (ii) Agent’s monthly actual shipment report submitted to LE, and shall adjust the budget as necessary for the following quarter(s).   As part of this process, the Parties will align on the allocation of Agent personnel primarily designated to perform the Services; and after receiving the written consent of LE, Agent may use any excess capacity of such designated personnel to perform the Services for non-LE projects, provided, however, that in no event shall the designated personnel be used for projects for any Business Competitor of LE.

(b)Merchandise Responsibility. LE will be the importer of record for all Merchandise purchased under this Agreement.  LE is responsible for duties, insurance, shipping and carriage costs, and all other charges related to the purchase of the Merchandise. LE will be solely responsible for (a) issuing all POs to Sellers, (b) all Merchandise acquired by LE, and (c) working with the Vendors to resolve any problems related to such Merchandise except for problems caused by Agent’s failure to properly perform the Services; provided, however that Agent’s responsibility for problems related to Merchandise acquired by LE for problems caused by Agent’s failure to properly perform the Services is limited to two times the amount of the Buying Commission earned by Agent on such Merchandise, For example, if LE places a purchase order for $30,000 of Merchandise that is defective and LE placed that order in reliance on an improperly performed Service, Agent would be responsible to cover $1,200  in expenses related to that 

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Merchandise. 

8.COMMISSIONS. 

(a)Commission. For the rendering of Services under this Agreement, LE shall pay Agent the greater of the (i) Buying Commission or (ii) the Minimum Commission set forth in Section 8(c). LE shall calculate the payments due under this Section on a monthly basis (the “Payment Period”) and shall pay the Commission as stated in Section 9(c). 

		
	i.
	All Commissions paid by LE are a non-dutiable buying agency commission under the customs laws of the United States of America.  Agent represents and warrants that Agent is familiar with the criteria considered by the U.S. Customs Service in determining whether commission compensation is subject to U.S. Customs duties.  Agent will endeavor  to  not intentionally function in any manner which will result in Agent being characterized as a selling agent or independent contractor for LE (as contrasted to a buying agent) and to that end:

		
	•
	Agent will not sell merchandise for Agent’s own account to LE or to any manufacturers or suppliers from whom Agent will purchase Products for LE;

		
	•
	Neither Agent nor any of Agent’s owners or employees shall have any financial or ownership interest in, or control of, any manufacturer or supplier from whom Agent will purchase Products for LE without first disclosing the nature of said interest to LE in writing and obtaining LE’s written approval;

		
	•
	No manufacturer or supplier providing products to be used in the manufacture of Products purchased for LE will have any controlling ownership interest in Agent;

		
	•
	Agent will not sell, for Agent’s own account, any raw materials to any manufacturer or supplier of Products purchased for LE, nor will Agent guarantee the cost of any raw materials which may be used in such manufacturing; and

		
	•
	Except as directed to by LE, Agent will not provide any dies, molds, patterns, artwork, printing plates, financial assistance, nor will Agent otherwise assist in the manufacture of Products purchased for LE, so that the cost of such items may be properly disclosed on the commercial invoices covering the Products and declared to the U.S. Customs Service as an assist.

		
	ii.
	Should LE be required to Return Goods to any Vendor or Destroy goods for failures to meet quality, compliance, or safety standards, or for substantial failure to meet stated requirements for the goods, LE shall be permitted to assess a credit to the Commission related to those goods, and shall advise Agent in writing of its intention to do so and the amount of the credit.

(b)Calculation of the Buying Commission. The “Buying Commission” is calculated by multiplying the F.O.B. invoice price of all Merchandise ordered by LE with the assistance of Agent (regardless of the system used to order Merchandise), net of (i) export duties, levies, taxes, insurance, shipping and similar charges, and (ii) the price of Merchandise rejected or returned to a Seller as non-compliant or non-certified, by a commission rate of 2.3% from the Effective Date through July 31, 2016 and thereafter by a commission rate of 3.5%.  The Buying Commission will be calculated at time of receipt of the Merchandise consistent with practices in effect immediately prior to the Effective Date (i.e., for 

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Merchandise for the LE Shops at Sears, as of receipt at the F.O.B. point (foreign port) and for all other Merchandise, at LE’s U.S. distribution facility).  For avoidance of doubt, Landed Duty Paid and domestic purchases shall not be included in any calculation of Buying Commission.

(c)Minimum Commission. The annual minimum commission (the “Minimum Commission”) for each Contract Year is set forth below. Termination by Agent under Section 3 will not relieve LE of its obligation to pay the Minimum Commission for the then current Term.
	
		
	Contract Year
	Annual Minimum Commission

	2016*
	$7,500,000

	2017
	$7,500,000 

	2018**
	To be negotiated.

	2019**
	To be negotiated.

	 
	 

*The annual Minimum Commission for the First Contract Year (i) takes into account the two different commission rates defined under Section 8(b); and (ii) shall be reduced by the amount of commissions earned by Sears Holdings Global Sourcing Ltd. (“SHGS”) subsequent to January 31, 2016 pursuant to the Buying Agency Agreement between SHGS and LE dated as of April 4, 2014, as amended.
**Minimum Commission applies to this Contract Year only if this Agreement is extended under Section 2(b) if based on the services outlined in this contract.
9.PAYMENT AND REPORTING.

(a)Invoice Reporting. 

i.Payment Period Invoices. Agent shall provide to LE, on a monthly basis, an invoice for the Commission earned or due for the Payment Period (the “Commission Invoice”), including any Expenses (as defined in Section 9.(b), below, and Exhibit #4 hereto) incurred in the performance of the Services for the Payment Period. For each Payment Period, the Commission Invoice will detail the Buying Commission earned for that Payment Period. 

ii. For the invoice period ending March 31 of each year, Agent shall compare the amount of Buying Commission earned by Agent for the Contract Year (or pro-rated portion) to the Minimum Commission due for that Contract Year as shown in the chart in Section 8(c). If the Minimum Commission for that Contract Year is greater than the Buying Commission earned in that Contract Year, Agent shall invoice LE for the difference between the Buying Commission earned and the amount of the Minimum Commission attributable to that Contract Year.  Buying Commission earned in any Contract Year may only be credited against that Contract Year’s Minimum Commission and may not be used as a credit against any other Contract Year’s annual Minimum Commission.

(b)Expenses.  In addition to the Commission, LE will reimburse Agent for all other reasonable out-of-pocket expenses actually incurred in its performance of the Services in accordance with Appendix #4 (“Expenses”). To the extent reasonably practicable, Agent will provide LE with notice of such Expenses prior to incurring them. If directed by Agent, LE will pay directly any or all third-party contractors providing Services to or for the benefit of LE.

(c)Payment of Commission Invoices.

i.Ancillary Agreement Payment Reconciliation. LE will pay Agent the Commissions, Expenses, and Transaction Taxes in accordance with Sections 8, 9(b), and 9(f) and with the 

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payment terms set forth in Section 14.19 of the Separation Agreement. Unless otherwise mutually agreed in writing, all amounts payable under this Agreement will be reconciled monthly and the Parties will after netting amounts due under the other Ancillary Agreements; make payments (to the Party who is owed the net amount) by electronic transfer of immediately available funds to a bank account designated by such Party from time to time. All amounts remaining unpaid for more than 15 days after their respective due date(s) will accrue interest as set forth in Section 14.19 (Payment Terms) of the Separation Agreement, until paid in full.

ii.Compensation for Services. Unless otherwise agreed to in writing by LE, the Commission payable under Section 8 represents Agent’s entire compensation for the Services performed on LE’s behalf.

(d)Payment of Merchandise Invoices.  LE is responsible for arranging payments to Seller for all Merchandise pursuant to the terms of LE’s Merchandise purchase agreements with those Sellers. All Merchandise credit facilities or payment terms to Sellers are the sole responsibility of LE.

(e)Rights of Recoupment and Setoff.  Agent has the right to invoice LE for any liability or obligation that LE may owe to Agent or its Affiliates. LE shall pay the amounts of such invoice as specified in Section 9(c). If LE does not pay such invoices, Agent may reduce, withhold or setoff against any payment due LE from Agent or its Affiliates. Agent’s rights to recoupment and set-off shall be senior to any claim asserted by any other party against the payment.

(f)Taxes.  Commissions do not include applicable taxes. LE will be responsible for the payment of all taxes, duties, and tariffs payable on the provision of the Services including sales, use, excise, value-added, business, service, goods and services, consumption, and other similar taxes or duties, including taxes incurred on transactions between and among Agent, its Affiliates, and third-party contractors, along with any related interest and penalties (“Transaction Taxes”). LE will reimburse Agent for any deficiency relating to Transaction Taxes that are LE’s responsibility under this Agreement. Notwithstanding anything in this Section to the contrary, each party will be responsible for its own income and franchise taxes, employment taxes, withholding, and property  taxes. The Parties will cooperate in Good Faith to minimize Transaction Taxes to the extent legally permissible. Each party will provide to the other party any resale exemption, multiple points of use certificates, treaty certification and other exemption information reasonably requested by the other Party.

		
	10.
	SHIPPING AND HANDLING; RISK OF LOSS.

(a)Shipping Guidelines. Agent shall employ commercially reasonable efforts to ensure that Merchandise is shipped to LE in accordance with the routing guidelines attached to LE’s purchase orders and letters of credit (where applicable), and by LE’s carrier of choice.

(b)Shipping Charges. LE will be responsible for all shipping and forwarding charges in accordance with terms of sale negotiated with Seller. LE will reimburse Agent for any authorized shipping or forwarding charges or fees Agent incurs on LE’s behalf.

(c)Risk of Loss.  Agent will not take title or assume the risk of loss to any Merchandise ordered on behalf of LE, including any damaged or defective goods and orders cancelled by LE. Title and risk of loss shall be borne by LE or Seller pursuant to the parties’ terms of sale and the terms of LE’s Merchandise purchase agreements with those Sellers.

11.SUB-AGENTS.

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LE acknowledges and agrees that Agent may engage sub-agents to perform some or all Agent’s services hereunder, provided, however, that in no event shall the relationship between the Agent and sub-agent result in either party becoming a buyer or seller of Merchandise procured or to be procured under this Agreement from the other. Agent shall advise LE in writing in advance of the appointment of any sub-agents who may perform services under this Agreement, and LE shall have three business days to accept or reject such sub-agent. If LE does not provide notice of acceptance or rejection during such time, the sub-agent shall be deemed accepted.  Agent shall be solely responsible to ensure that its sub-agents strictly adhere to the terms and conditions of this Agreement and to pay all remuneration payable to its sub-agents.
12.DEFENSE AND INDEMNITY; LIMITATION OF LIABILITY. 

(a)Indemnification by LE. LE will defend, indemnify, and hold harmless Agent and its Affiliates and their respective Representatives from and against any and all costs, liabilities, losses, penalties, expenses and damages (including reasonable attorneys’ fees) of every kind and nature arising from third-party claims, demands, litigation, and suits related to or arising out of this Agreement (together “LE Claims”), except to the extent that such LE Claims are found by a final judgment or opinion of an arbitrator or a court of appropriate jurisdiction to be caused by: (i) a breach of any provision of this Agreement by Agent; or (ii) any negligent act or omission, or willful misconduct of Agent, its Affiliates, or their respective Representatives in performance of this Agreement. 

(b)Indemnification by Agent.  Agent will defend, indemnify, and hold harmless LE and its Affiliates, and their respective Representatives, from and against any and all costs, liabilities, losses, penalties, expenses and damages (including reasonable attorneys’ fees) of every kind and nature arising from third-party claims, demands, litigation, and suits, that: (i) relate to bodily injury or death of any person or damage to real and/or tangible personal property directly caused by the negligence or willful misconduct of Agent or its Affiliates during the performance of the Services, or (ii) relate to the intentional infringement of any copyright or trade secret by an Asset owned by Agent or its Affiliates and used by Agent in the performance of the Services (together, “Agent Claims”). Notwithstanding the obligations set forth above in this Section, Agent will not defend or indemnify LE, its Affiliates, or their respective Representatives to the extent that such Agent Claims are found by a final judgment or opinion of an arbitrator or a court of appropriate jurisdiction to be caused by: (x) a breach of any provision of this Agreement by LE; (y) any negligent act or omission, or willful misconduct of LE, its Affiliates, or their respective Representatives in performance of this Agreement; or (z) with respect to infringement claims: (I) LE’s use of the Services in combination with any product or information not provided by Agent; (II) LE’s distribution, marketing or use for the benefit of third parties of the Services; (III) LE’s use of the Services other than as contemplated by this Agreement; or (IV) information, direction, specification or materials provided by or on behalf of LE. LE Claims and Agent Claims are each individually referred to as a “Claim.”

(c)Procedure.  In the event of a Claim, the indemnified Party will give the indemnifying Party prompt notice in writing of the Claim; but the failure to provide such notice will not release the indemnifying Party from any of its obligations under this Article except to the extent the indemnifying Party is materially prejudiced by such failure. Upon receipt of such notice the indemnifying Party will assume and will be entitled to control the defense of the Claim at its expense and through counsel of its choice, and will give notice of its intention to do so to the indemnified Party within 20 business days of the receipt of such notice from the indemnified Party. The indemnifying Party will not, without the prior written consent of the indemnified Party, (i) settle or compromise any Claim or consent to the entry of any judgment that does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the indemnified Party of a written release from all liability in respect of the Claim or (ii) settle or compromise any Claim in any manner that may adversely affect the Indemnified Party other than as a result of money damages or other monetary payments that are indemnified hereunder. The indemnified Party will have the right at its own cost and expense to employ separate counsel and participate in the defense of any Claim.

(d)Joint Claims.  If a third-party claim, demand, litigation, or suit involves allegations for 

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which both Parties may invoke the obligation of the other Party to defend them under this Agreement (“Mixed Claims”); then LE shall defend both Parties and their Representatives from such Mixed Claims, at LE’s sole reasonable expense, provided that Agent may elect to take on the defense of such Mixed Claims.

(e)Independent Obligation.  The obligations of each Party to defend, indemnify and hold harmless, the other Parties’ Indemnified Parties under this Section are independent of each other and any other obligation of the Parties under this Agreement.

(f)Limitation of Liability.  EXCEPT FOR (I) EACH PARTY’S OBLIGATIONS WITH RESPECT TO THE OWNERSHIP OF DATA AND OTHER ASSETS OF THE OTHER PARTY AS SET FORTH IN SECTION 6(g), (II) EACH PARTY’S INDEMNITY AND DEFENSE OBLIGATIONS AS SET FORTH IN SECTIONS 12(a), 12(b), AND 12(c), AND (III) A PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS, IN NO EVENT WILL EITHER PARTY, NOR ITS AFFILIATES, CONTRACTORS OR AGENTS BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES, LOSSES OR EXPENSES (INCLUDING BUSINESS INTERRUPTION, LOST BUSINESS, LOST PROFITS, LOST DATA, OR LOST SAVINGS, DAMAGES TO SOFTWARE OR FIRMWARE, OR COST OF PROCURING OR TRANSITIONING TO SUBSTITUTE SERVICES), REGARDLESS OF THE LEGAL THEORY UNDER WHICH SUCH LIABILITY IS ASSERTED, AND REGARDLESS OF WHETHER A PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITY. THE SOLE LIABILITY OF AGENT AND ITS AFFILIATES FOR ANY ERRORS AND OMISSIONS IN THE SERVICES ARE LIMITED TO THE PAYMENT OF DIRECT DAMAGES, NOT TO EXCEED (FOR ALL CLAIMS IN THE AGGREGATE) THE COMMISSIONS RECEIVED BY AGENT UNDER THIS AGREEMENT DURING THE PRIOR SIX (6) MONTHS PRIOR TO THE DATE SUCH CLAIM AROSE.

13.AUDIT

(a)Retention of Records.  LE shall keep and preserve accurate records of all transactions relating to this Agreement including records of inventory purchased and delivered for the longer of: (i) the minimum period required by Applicable Law, and (ii) the Term plus two years after the Termination of this Agreement. Agent, with reasonable notice to LE, may conduct audits of the books and records of LE to determine compliance with the accounting of Commissions provisions of this Agreement (each, an “Audit”). Except as provided below, Audits will occur no more than twice per calendar year and may be conducted by Agent through itself or its authorized agents who agree to treat any information gained from such Audits as confidential in accordance with Section 14 (Confidentiality.) or terms substantially equivalent thereto. 

(b)Number of Audits.  In the event that an Audit or other information demonstrates that LE has underpaid Commissions by more than 5% in two or more Payment Periods, Agent has the right to conduct Audits on a quarterly basis (unless such discrepancy was a result of incorrect information provided by Agent or its Affiliates), until such time as LE has properly paid Commissions for three consecutive Audits, after which time Agent will revert to auditing LE no more than twice per calendar year.

(c)Allocation of Audit Costs.  Agent shall pay for all Audits; provided that if any Audit shows a 5% or greater discrepancy in the amount of the Commission paid by LE for the applicable Payment Period(s), then LE shall pay for that Audit and any subsequent Audits for a period of one year; unless such discrepancy was a result of incorrect information provided by Agent or its Affiliates.

(d)Late Payment.  In the event that an Audit or other information demonstrates that LE has underpaid Commissions (unless such discrepancy was a result of incorrect information provided by Agent or its Affiliates), LE shall remit to Agent the amount of the underpayment, together with interest computed as set forth in Section 14.19 of the Separation Agreement from the date payment of the unpaid Commissions was originally due to the date of payment. Any late payment under this Section 13(d) is due 

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10 days after LE receives notice of the underpayment of Commissions.

14.CONFIDENTIALITY

(a)Confidential Information.  “Confidential Information” means all information, whether disclosed in oral, written, visual, electronic or other form, that (i) one Party (the “Disclosing Party”), its Affiliates or its Personnel discloses to the other Party (the “Receiving Party”), its Affiliates or its Personnel, (ii) relates to or is disclosed in connection with this Agreement or a Party’s or a Party’s Affiliate’s business, and (iii) is or reasonably should be understood by the Receiving Party to be confidential or proprietary to the Disclosing Party (whether or not such information is marked “Confidential” or “Proprietary”). The Disclosing Party’s sales, pricing, costs, inventory, operations, employees, current and potential customers, financial performance and forecasts, and business plans, strategies, forecasts and analyses, as well as information as to which the Securities and Exchange Commission has granted confidential treatment pursuant to its Rule 406 of Regulation C (the “CTR Information”), are Confidential Information.

(b)Treatment of Confidential Information.  The Receiving Party will use Confidential Information only in connection with this Agreement and, except as expressly permitted by this Agreement and subject to the next sentence, will not disclose any Confidential Information for three years from the date of receipt of the Confidential Information. Neither Party will disclose the CTR Information for a period of ten years from the date or receipt. 

i.Limitations. The Receiving Party will (A) restrict disclosure of the Confidential Information to its and its Affiliates’ Personnel with a need to know the Confidential Information for purposes of performing the Receiving Party’s responsibilities or exercising the Receiving Party’s rights under this Agreement, (B) advise those Personnel of the obligation not to disclose the Confidential Information or use the Confidential Information in a manner prohibited by this Agreement, (C) copy the Confidential Information only as necessary for those Personnel who need it for performing the Receiving Party’s responsibilities under this Agreement, and ensure that confidentiality is maintained in the copying process; and (D) protect the Confidential Information, and require those Personnel to protect it, using the same degree of care as the Receiving Party uses with its own Confidential Information, but no less than reasonable care.

ii.Liability for Unauthorized Use. The Receiving Party will be liable to the Disclosing Party for any unauthorized disclosure or use of Confidential Information in violation of this Agreement by its Affiliates and any of its and its Affiliates’ current or former Personnel.

iii.Destruction. Without limiting the foregoing, when any Confidential Information is no longer needed for the purposes contemplated by this Agreement the Receiving Party will, promptly after request of the Disclosing Party, either return such Confidential Information in tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the other Party that it has destroyed such Confidential Information (other than electronic copies residing in automatic backup systems and copies retained to the extent required by Applicable Law, regulation or a bona fide document retention policy). 

(c)Exceptions to Confidential Treatment. The obligations under this Section 14 do not apply to any Confidential Information that the Receiving Party can demonstrate (i) was previously known to the Receiving Party without any obligation owed to the Disclosing Party or its Affiliates to hold it in confidence, (ii) is disclosed to third parties by the Disclosing Party or its Affiliates without an obligation of confidentiality to the Disclosing Party or its Affiliate, as applicable, (iii) is or becomes available to any member of the public other than by unauthorized disclosure by the Receiving Party, its Affiliates or its or their Personnel, (iv) was or is independently developed by the Receiving Party or its Affiliates or Personnel without use of the Confidential Information, (v) legal counsel’s advice is that the Confidential Information 

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is required to be disclosed by Applicable Law or the rules and regulations of any applicable Governmental Authority and the Receiving Party has complied with Section 14(d) (Protective Arrangement), or (vi) legal counsel’s advice is that the Confidential Information is required to be disclosed in response to a valid subpoena or order of a court or other governmental body of competent jurisdiction or other valid legal process and the Receiving Party has complied with Section 14(d) (Protective Arrangement).

(d)Protective Arrangement. If the Receiving Party determines that the exceptions under Sections 14(c)(v) or (vi) apply, the Receiving Party shall give the Disclosing Party, to the extent legally permitted and reasonably practicable, prompt prior notice of such disclosure and an opportunity to contest such disclosure and shall use commercially reasonable efforts to cooperate, at the expense of the Receiving Party, in seeking any reasonable protective arrangements requested by the Disclosing Party. In the event that such appropriate protective order or other remedy is not obtained, the Receiving Party may furnish, or cause to be furnished, only that portion of such Confidential Information that the Receiving Party is advised by legal counsel is legally required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Confidential Information. 

(e)Ownership of Information.  Except as otherwise provided in this Agreement, all Confidential Information provided by or on behalf of a Party (or its Affiliates) that is provided to the other Party or its Personnel shall remain the property of the disclosing entity and nothing herein shall be construed as granting or conferring rights of license or otherwise in any such Confidential Information

15.MISCELLANEOUS

(a)Third Party Agreements.  The Parties anticipate that Agent will be relying upon its and its Affiliates existing agreements with third parties to provide certain of the Services described herein (“Third Party Agreements”) and that the Parties have assumed that Agent’s and/or its Affiliates’ counterparty under each such Third Party Agreement (the “Third Party Vendor”) will permit Agent and/or its Affiliates to procure goods, services and/or license software, as applicable under such Third Party Agreement, on behalf of LE, at no additional cost, as if LE were an affiliate of Agent and/or its Affiliates under such Third Party Agreement. If: (i) Agent’s or its Affiliates’ costs, fees, or expenses increase under the terms of such Third Party Agreements, or (ii) the Third Party Vendor demands or is entitled to additional costs, fees, or expenses now or in the future, as a result of LE receiving benefits under such Agreement, then, in addition to all other amounts due hereunder, LE shall be liable for its proportionate share of all increased amounts under subsection (i) and all of the increased amounts under subjection (ii), in each case as such amounts are determined by Agent in Good Faith. Agent will notify LE once it learns of any increased amounts due under the immediately foregoing sentence, and will work with the Third Party Vendor to try to mitigate such cost increase. To the extent any such Third Party Agreement includes early termination fees (or similar charges, “Termination Fees”), LE will be solely responsible for any such Termination Fees Agent or its Affiliates incur as a result of the Separation of LE and/or LE ceasing to use the Services under this Agreement.

(b)Computer Access.  If either Party, its Affiliates or its Personnel are given access, whether on-site or through remote facilities, to any communications, computer, or electronic data storage systems of the other Party, its Affiliates or its Personnel (each an “Electronic Resource”), in connection with this Agreement, then the Party on behalf of whom such access is given will ensure that its Personnel’s use of such access shall be solely limited to performance or exercise of, such Party’s duties and rights under this Agreement, and that such Personnel will not attempt to access any Electronic Resource other than those specifically required for the performance of such duties and/or exercise of such rights. The Party given access will limit such access to those of its and its Affiliates’ Personnel who need to have such access in connection with this Agreement, will advise the other Party in writing of the name of each of such Personnel who will be granted such access, and will strictly follow all security rules and procedures for use of such Electronic Resources. All user identification numbers and passwords disclosed to a Party’s Personnel and any information obtained by such Party’s Personnel as a result of its access to, and use of the other Party’s, its Affiliates’ or its Personnel’s Electronic Resources will be deemed to be, and will be treated 

12

as, Confidential Information of the Party on behalf of whom such access is granted. Each Party will reasonably cooperate with the other Party in the investigation of any apparent unauthorized access by the other Party, its Affiliates, or its Personnel to any Electronic Resources or unauthorized release of Confidential Information. Each Party will promptly notify the other Party of any actual or suspected unauthorized access or disclosure of any Electronic Resource of the other Party, its Affiliates, or its Personnel.

(c)Amendment; No Waiver.  The terms, covenants and conditions of this Agreement may be amended, modified or waived only by a written instrument signed by both Parties, or in the event of a waiver, by the Party waiving such compliance. Any Party’s failure at any time to require performance of any provision will not affect that Party’s right to enforce that or any other provision at a later date. No waiver of any condition or breach of any provision, term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances will be deemed to be or construed as a further or continuing waiver of that or any other condition or of the breach of that or another provision, term or covenant of this Agreement.

(d)Assignment. Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party, which consent may be withheld in the other Party’s absolute discretion. A Stockholding Change will constitute an assignment of this Agreement by either Party for which assignment the other Party’s prior written consent will be required.  Such assignment will relieve the assigning Party of its obligations and liabilities hereunder incurred or accrued prior to the date of the assignment. This Agreement will be binding on, and will inure to the benefit of, the permitted successors and assigns of the Parties.

(e)Notices.  All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement must be in writing and will be deemed to have been duly given (i) when delivered by hand, (ii) three (3) Business Days after it is mailed, certified or registered mail, return receipt requested, with postage prepaid, (iii) on the same Business Day when sent by facsimile or electronic mail (return receipt requested) if the transmission is completed before 5:00 p.m. recipient’s time, or one (1) Business Day after the facsimile or email is sent, if the transmission is completed on or after 5:00 p.m. recipient’s time or (iv) one (1) Business Day after it is sent by Express Mail, Federal Express or other courier service specifying same day or next day delivery, as follows (or at such other address for a Party as shall be specified in a notice given in accordance with this Section): 

If to Agent, to:        International Sourcing & Logistics Limited
51/F, Office Tower, Langham Place
8 Argyle Street
Mongkok, Kowloon, Hong Kong 
Attn.: Head of International Sourcing, SHGS

With a Copy To:    Sears Holdings Corporation 
3333 Beverly Road 
Hoffman Estates, Illinois 60179 
Attn.: General Counsel 
Facsimile: (847) 286-2471 
Email: Kristin.Coleman@searshc.com 

If to LE, to:         Lands’ End, Inc.
5 Lands’ End Lane
Dodgeville, Wisconsin 53595
Attn.: VP, Global Sourcing 
Facsimile: (608) 935-4913
Email: Mary.Keenan@landsend.com

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With a Copy To:    Lands’ End, Inc.
5 Lands’ End Lane
Dodgeville, Wisconsin 53595
Attn.: General Counsel 
Facsimile: (608) 935-6550
Email: lawdepartment@landsend.com
(f)Publicity. All publicity regarding this Agreement shall be mutually agreed in writing in advance by the Parties and the parties hereto shall consult with each other prior to issuing, and shall, subject to the requirements of Section 14, above, provide the other party the opportunity to review and comment upon any proposed press releases and other public statements in connection with the Services provided or any relationship entered into pursuant to this Agreement.

(g)Survival.  Each term of this Agreement that would, by its nature, survive the termination or expiration of this Agreement will so survive, including the obligation of either Party to pay all amounts accrued hereunder and including the provisions of Sections 8 and 9.

(h)No Third Party Rights. Except for the indemnification rights under this Agreement of any Agent or LE indemnitee in their respective capacities as such, this Agreement is intended to be solely for the benefit of the Parties and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the Parties.

(i)Severability. If any provision of this Agreement is declared by any court of competent jurisdiction to be illegal, invalid, void or unenforceable, such provision will (to the extent permitted under Applicable Law) be construed by modifying or limiting it so as to be legal, valid and enforceable to the maximum extent compatible with Applicable Law, and all other provisions of this Agreement will not be affected and will remain in full force and effect.

(j)Entire Agreement.  This Agreement (including the Exhibits, Appendixes and Schedules hereto) constitutes the entire agreement between the Parties hereto and supersedes all prior agreements and understandings, oral and written, between the Parties hereto with respect to the subject matter hereof.

(k)No Legal Service/Advice. Notwithstanding anything herein to the contrary, Agent shall not provide any legal services or legal advice to LE, LE is not entitled to rely on Agent for legal advice and counsel, nor shall Agent’s advice be construed as legal advice.

(l)Equitable Relief.  Each Party acknowledges that any breach by a Party of Section 14 (Confidential Information) of this Agreement may cause the non-breaching Party and its Affiliates irreparable harm for which the non-breaching Party and its Affiliates have no adequate remedies at law. Accordingly, in the event of any actual or threatened default in, or breach of the foregoing provisions, each Party and its Affiliates are entitled to seek equitable relief, including specific performance, and injunctive relief; in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. A Party seeking such equitable relief is not obligated to comply with Section 15(r) (Dispute Resolution) and may seek such relief regardless of any cure rights for such actual or threatened breach. Each Party waives all claims for damages by reason of the wrongful issuance of an injunction and acknowledges that its only remedy in that case is the dissolution of that injunction. Any requirements for the securing or posting of any bond with such remedy are waived.

(m)Force Majeure.  Neither Party will be responsible to the other for any delay in or failure of performance of its obligations under this Agreement, to the extent such delay or failure is attributable to any act of God, act of terrorism, fire, accident, war, embargo or other governmental act, or riot; provided, however, that the Party affected thereby gives the other Party prompt written notice of the occurrence of any event which is likely to cause (or has caused) any delay or failure setting forth its best estimate of the length 

14

of any delay and any possibility that it will be unable to resume performance; provided, further, that said affected Party will use its commercially reasonable efforts to expeditiously overcome the effects of that event and resume performance.  During such time that the performance of obligations is suspended or delayed, if Agent is not able to provide the Buying Agency Services as described in Section 5 hereof, LE may suspend payment of the Commission in proportion to the duration of the suspension or delay, and if the suspension or delay extends more than five (5) business days the Minimum Commission may be reduced in proportion to the suspension or delay.

(n)Fair Construction.  This Agreement will be deemed to be the joint work product of the Parties without regard to the identity of the draftsperson, and any rule of construction that a document will be interpreted or construed against the drafting Party will not be applicable.

(o)Independent Contractors.  Nothing in this Agreement creates a relationship of, partnership, or employer/employee between Agent and LE and it is the intent and desire of the Parties that the relationship be and be construed as that of independent contracting parties and not as, partners, joint venturers or a relationship of employer/employee.

(p)Construction and Interpretation.  In this Agreement (1) “include,” “includes,” and “including” are inclusive and mean, respectively, “include without limitation,” “includes without limitation,” and “including without limitation,” (2) “or” is disjunctive but not necessarily exclusive, (3) “will” and “shall” expresses an imperative, an obligation, and a requirement, (4) numbered “Section” references refer to sections of this Agreement unless otherwise specified, (5) section headings are for convenience only and will have no interpretive value, (6) unless otherwise indicated all references to a number of days mean calendar (and not business) days and all references to months or years mean calendar months or years, (7) references to $ or Dollars mean U.S. Dollars, and (8) hereof,” “herein” and “herewith” and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement. 

(q)Condition Precedent to the Effectiveness of this Agreement.  This Agreement will not become effective until it has been approved by the Audit Committee of the SHC Board.

(r)Dispute Resolution. Except as provided for in Section 15(l) (Equitable Relief), all Disputes related to this Agreement are subject to Article XI (Dispute Resolution) of the Separation Agreement. 

(s)Governing Law; Jurisdiction. 

i.Governing Law. This Agreement (and all claims, controversies or causes of action, whether in contract, tort or otherwise, that may be based upon, arise out of or relate to this Agreement or the negotiation, execution, termination, performance or nonperformance of this Agreement (including any claim, controversy or cause of action based upon, arising out of or relating to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement)) shall be governed by, and construed and enforced in accordance with, the federal laws of the United States, including the Lanham Act, and the internal laws of the State of Illinois, without regard to any choice or conflict of law provision or rule (whether of the State of Illinois or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Illinois. This Agreement will not be subject to any of the provisions of the United Nations Convention on Contracts for the International Sale of Goods.

ii.Jurisdiction. Each of the Parties hereto irrevocably agrees that all proceedings arising out of or relating to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns shall be brought, heard and 

15

determined exclusively in any federal or state court sitting in Cook County, Illinois. Consistent with the preceding sentence, each of the Parties hereto hereby (a) submits to the exclusive jurisdiction of any federal or state court sitting in Cook County, Illinois for the purpose of any proceeding arising out of or relating to this Agreement or the rights and obligations arising hereunder brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense, counterclaim, or otherwise, in any such proceeding, any claim that it or its property is not subject personally to the jurisdiction of the above-named courts, that the proceeding is brought in an inconvenient forum, that the venue of the proceeding is improper, or that this Agreement or any of the other transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts. Each Party agrees that service of process upon such party in any such action or Proceeding shall be effective if notice is given in accordance with Section 15(e). 

(t)Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 

(u)Counterparts.  This Agreement may be executed and delivered (including by facsimile or other electronic transmission (e.g., .pdf file) in counterparts, and by the Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement effective as of the Effective Date.
	
		
	AGENT:

INTERNATIONAL SOURCING & LOGISTICS LIMITED

 

By: /s/ Laurent Madelaine
Name: Laurent Madelaine
Its: Head of International Sourcing
	LE:

LANDS’ END, INC.

By: /s/ Mary E. Keenan
Name: Mary E. Keenan
Its: Vice President

17

Appendix #1

Glossary

“Affiliate” means (solely for purposes of this Agreement and for no other purpose) (i) with respect to LE, its Subsidiaries, and (ii) with respect to Agent, SHC and its Subsidiaries; provided, however, that except where the context indicates otherwise, for purposes of this Agreement and for no other purpose, from and after the Effective Time (1) no SHC Entity shall be deemed to be an Affiliate of any LE Entity and (2) no LE Entity shall be deemed to be an Affiliate of any SHC Entity.
“Ancillary Agreements” has the meaning ascribed to it in the Separation Agreement. 
“Applicable Law” means all applicable common law, laws, ordinances, regulations, rules, and court and administrative orders and decrees of all national, regional, state, local and other governmental units that have jurisdiction in the given circumstances.
“Business Competitor” of LE shall be any of the companies or organizations provided by LE on a list to Agent, which list shall be updated from time to time by LE.“Business Day” means any day that is not a Saturday, a Sunday or any other day on which banks are required or authorized by Applicable Law to be closed in New York, New York. 
“Commission” means both the Buying Commission and the Minimum Commission. 
“Competitor Affiliates” has the meaning ascribed to it in the Separation Agreement. 
“Competitor” has the meaning ascribed to it in the Separation Agreement.
“Contract Year” means each April 1st through March 31st during the Term, except that the first contract year (the “First Contract Year”) begins with the Effective Date and continues through March 31, 2017.
 “Good Faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing in accordance with Applicable Law.
“LE Entities” means LE; Lands’ End Direct Merchants, Inc., a Delaware corporation; Lands’ End International, Inc., a Delaware corporation; Lands’ End Publishing, LLC, a Delaware limited liability company; Lands’ End Japan KK, a Japanese corporation; Lands’ End Japan Inc., a Delaware corporation; Lands’ End Europe Limited, a company organized under the laws of England and Wales; Lands’ End GmbH, a corporation with limited liability organized under the laws of the Federal Republic of Germany; Lands’ End Canada Outfitters ULC, a corporation organized under the laws of British Columbia, Canada; LEGC, LLC, a Virginia limited liability company; and all other Persons that are or hereafter become a Subsidiary of LE.
“Merchandise” means the apparel, home goods, shoes, apparel accessories and other products purchased by Agent on the instructions of LE for LE’s account.
“Personnel” means the officers, directors, employees, agents, suppliers, licensors, licensees, contractors, subcontractors, advisors (including attorneys, accountants, technical consultants or investment bankers) and other representatives, from time to time, of a Party and its Affiliates; provided that the Personnel of the LE Entities shall not be deemed Personnel of the SHC Entities and the Personnel of the SHC Entities shall not be deemed Personnel of the LE Entities.
“Representatives” means Personnel, partners, shareholders, and members.

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“Sellers” means the third-party suppliers, vendors, and manufacturers (or their respective selling agents) of the Merchandise.
“Separation Agreement” shall mean the Separation and Distribution Agreement by and between Sears Holdings Corporation and Lands’ End, Inc., dated as of April 4, 2014.
“SHC Board” has the meaning ascribed to it in the Separation Agreement.
“SHC Entities” has the meaning ascribed to it in the Separation Agreement.
“SHC” means Sears Holdings Corporation.
“Stockholding Change” has the meaning ascribed to it in the Separation Agreement.
“Subsidiaries” has the meaning ascribed to it in the Separation Agreement.
“Termination” means expiration (without renewal or extension) or termination of this Agreement for any reason.
“Territory” means anywhere in the world.
[End of Appendix #1]

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Appendix #2
Services
	
		
	Sourcing Services
	•Provide market intelligence regarding potential suppliers, manufacturers, research and evaluation of factory capability, and new vendor setup (including vendor and factory documentation).Work directly with vendors on new product development and manage vendor communications
•Provide current and timely information on commodity pricing, country specific market intelligence, labor/wage rates by country and changes in political situation.
•Manage costing quote submissions, assist LE with cost analysis, and conduct vendor negotiations Assist LE with vendor selection, price, quality, packaging and delivery negotiation
•Assist LE with sourcing new fabric and fabric development, approval of production for fabric and colors
•Review fabric standard operating procedures periodically
•Identify potential issues and provide technical expertise to problems of fabric, prints, technical design & fits, colors and product delivery
•Support LE on fitting/patterns and quality issues under Technical Design
•Pre-screen fit approvals, track fit sampling, and support proto sample fitting
•Assist LE with mill and vendor strategy in alignment with LE, including LE   •Standard Operating Procedures (SOP’s). Identify and qualify new mills.          •Support fabric development and bulk submits and fabric approvals.
•Assist LE with obtaining timely execution of Purchase Order Terms and           •Conditions and any other required documents. 
•Provide follow up on production and purchase order status when required, inclusive of work in progress (WIP) reporting, alerting LE of any potential delays or non-compliance. 
•Facilitate communication between LE and Sellers, when necessary, acting as translator for LE in vendor meetings and with potential vendors.
•Educate staff, vendors and mills on LE SOP’s, quality, labor compliance and purchasing requirements, as listed on LE Vendor Website.
•Responsible for Sample Management, including development, production, fit and photo samples.
•Manage color approvals and support. Train and educate mills on color SOPs, tools and expectations. 
•Provide technical design support; assist in block creation and grading, along with counter-sourcing support. 
•Provide ideas for new grading and sizing; build fabric platform; provide support to re-engineer and enhance fabric and trim library
•Validate, when requested, vendors are purchasing trims and packaging product from designated suppliers.
•Facilitate the resolution of export document discrepancies as requested. 
•Monitor bookings and on-time shipment

	Marketing Services
	•Act as a bridge to communicate with vendors, suppliers, and business partners of LE developments and Brand strategy as dictated by LE.

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	Quality Control Services
	•Setup LE quality standard, certified auditor program, product safety, testing protocols, standard operation procedures and on-going training and technical support to vendors
•Evaluate new production facilities and conduct evaluation and approval, prior to production.
•Conduct production facility evaluation and approval, regular quality review, manage corrective actions to vendors to ensure LE quality standard are met
•Designate 3rd party testing partners and fee negotiation, and ensure lab test results are in compliance, Agent Lab Testing added services and leverage of new contract pricing. Third party designee subject to LE written approval.
•Assist in negotiation with any claims for damaged / non-conforming goods, or rejected product.
•Use commercially reasonable efforts to ensure no transshipment and that the services provided by Agent comply with all currently Applicable Laws and currently applicable LE business codes
•Disclose any Labor Compliance violations, evidence of any transshipment or other apparent violation of law or Seller’s contractual obligations as witnessed during Quality Audits at factory or made known to Agent.
•Facilitate the de-identification requirements of any LE product rejected by LE.
•Ensure LE has access to vendor facilities, at any time.
•Conduct Final Shipment Audits at Vendors / Factories that have been decertified from the Lands'  End Certified Auditor Program for poor product quality performance or other reasons, until Certification can be re-established, or vendor exited.
•Provide Final Audits for Vendor / Factories that may be unsuitable to participate in the LE Certified Auditor Program
•Provide support for new factories starting up, with Final Audit coverage of initial shipments until full Certified Auditor status is established
•Conduct preproduction and pilot run inspections of priority new styles
•Agent not required to Travel to a separate country or region than regions in which Agent has personnel or to any location which Agent deems unsafe.

	PO Contract Support Services
	•Purchase order contract support not provided by Agent.

	IT and Software 
	•Continue existing IT infrastructure support

	Access to Facilities
	•Provide occasional working and meeting facilities as needed and as available

	LE Business Knowledge
	•Familiarize itself and remain current with LE policies and requirements. (reference LE vendor website and social compliance).

	Claim resolution
	•Assist in resolution of claims with vendor, mill and service provider negotiations, as needed.

	Returns
	•Facilitate the collection of Lands’ End returns in the region, as currently provided (centralized in Hong Kong).

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Appendix #3

Contact Persons

	
		
	AGENT:
	Laurent Madelaine

	LE:
	Mary Keenan

22

 Appendix #4

Included Expenses

The following travel and other expenses are included in the calculation of the Commissions and will not be billed separately under Section 9(b):
		
	•
	Reasonable travel expenses for travel to and from inspection sites that are (i) less than 50km from, and (ii) within the same country as the location of Agent personnel conducting the inspection.

		
	•
	Reasonable travel expenses for travel to and from LE’s corporate office for meetings, orientations or for enhancement of communication, up to four times a calendar year.

The following expenses are examples of Expenses which will be billed separately under Section 9(b): 
		
	•
	All expenses incurred for Vendor Summit functions specifically requested by LE to be organized in Hong Kong or in other countries.    

		
	•
	Requests for travel that are outside the scope of the mutually agreed upon annual budget (+ or minus 15%) (based upon past practices) and travel for duties beyond those set forth in this Agreement. 

		
	•
	Investments in fixed assets, software licenses, or other equipment required by LE (beyond what Agent currently provides for its associates that support LE). 

Lands’ End’s Expense Reimbursement Guidelines
for Third Party Service Providers

PURPOSE 
This establishes Lands' End’s minimum requirements and guidelines for reimbursement of third party out-of-pocket expenses. This applies to consultants, contractors and other service providers who submit expenses to Lands’ End. Future reference to these individuals is made collectively as “service providers.” 

GENERAL REQUIREMENTS 
A. Contract. A contract for services specified in this policy must be on file and signed by the service provider and the authorized Lands’ End, Inc. (“Lands’ End”) representative. 
B. Responsibility for Billing. All service provider employees are expected to be reasonable and responsible in all billing practices. The service provider must ensure that invoices submitted to Lands’ End contain only those hours and expenses that are reasonably necessary to obtain the best results for Lands’ End. The service provider’s billing person who is actually in charge of a matter must review each statement to ensure the accuracy of hours and expenses prior to submission. 
C. Multiple Employee Representation. If Lands’ End is charged by individual rather than by project (pursuant to the terms of the contract), Lands’ End should be billed for representation of only one service provider employee at any meeting, client conference, presentation, or the like. When the service provider believes that participation by more than one representative is needed, the written approval of the Lands’ End Project Manager responsible for the matter must be obtained. 

23

ITEMIZED EXPENSES 
A. Costs and Expenses Without Overhead. The service provider should not bill for photocopy, fax or telephone costs incurred while working on-site at Lands’ End, since Lands’ End is already paying these expenses. 
B. Photocopying. Charges for photocopying in the service provider's offices are not allowed, and are expected to be borne by the service provider as part of general office overhead. 
C. Facsimile Transmissions. Charges for facsimile transmissions in the service provider's offices are not allowed, and are expected to be borne by the service provider as part of general office overhead 
D. Mail and Overnight Couriers. Overnight express delivery services should not be used except when a compelling reason exists. When used, the service provider should always use the most cost efficient overnight or second day service. 
E. Consultants and Similar Supplier Expenses. The Lands’ End Project Manager responsible for the Statement of Work must approve payment and reimbursement of all third party supplier expenses. The service providers may not incur any expense over $500 to be billed to Lands’ End for hiring an expert or other consultant for transcripts or other outside reports, without the prior approval of the Lands’ End Project Manager responsible for the matter. 
F. Cellular Telephone Charges. The service provider will not charge Lands’ End for cellular calls (except while on out of town production work). 
G. Research Firms. The service provider will not charge Lands’ End for research services if the provider is billed on a flat monthly or yearly (versus by-the-minute or by-the-search) rate.

Third Party Travel Expense

PURPOSE 
This establishes Lands’ End’s minimum requirements for reimbursement of third party out-of-pocket travel expenses, where required by contractual agreement.  This applies to consultants, contractors and other service providers who submit authorized, reimbursable travel expenses to Lands’ End.  Future reference to these individuals is made collectively as “service providers”.

All service providers who require travel and lodging have the responsibility to ensure that their travel expenses are appropriate, reasonable, and documented.  All expenses are subject to Lands’ Ends’ approval.  

A. Invoice Processing
Prior to submitting any invoice for payment, regardless of the invoice payment processing arrangements set forth in the agreement, a summary report with line item detail must be sent to the Lands’ Ends’ business contact for the project for their review and approval.

B. Receipt Requirements
Individual receipts for air, hotel, car rental, taxi, meals, etc. must be available upon request should the Land’s End business project contact have any inquiries.  All individual receipts submitted for payment to Lands’ End must be retained by the supplier (hard copy or scanned image) for a period up to three years following the end of the project term.

24

C. Reimbursable/Not Reimbursable Expenses
	
		
	Reimbursable
	Not Reimbursable

	Air Travel

	Economy Class Travel
Business Class travel over 12 flight hours
	First Class Travel
Airline Upgrade Charges
Airline offerings, i.e. purchase miles, seats, etc.

	Lodging

	Hotel expense & taxes at moderately-priced hotels, such as Hampton Inn, Holiday Inn Express, Fairfield Inn
	Luxury/premium hotel expenses
Personal incidentals i.e. in-room movies
No show charges

	Ground Transportation

	Taxi or shared limousine to/from the airport
Compact rental car is required unless the size of group requires a larger vehicle
Vehicle damage insurance and liability insurance on international rentals only
Rental car refueling prior to returning the vehicle
Mileage allowance beyond normal daily commute will be reimbursed at the current LANDS’ END rate
	Private car limousine or limousine service rented on an hourly or hourly-plus basis
Luxury/Premium rental cars
Rental car insurance on domestic rentals
Convenience refueling when returning rental car
Mileage for normal daily commute

	Meals

	Meals while on overnight travel status
Meal expenses up to $30 per day plus gratuity
Meal expenses up to $50 per day plus gratuity in Boston, Chicago (downtown only), Honolulu, Los Angeles, New York, San Diego, San Francisco, Seattle, Washington, D.C., all international destinations
	Meals for day trips
Meals in excess of daily limits
Meals for local staff

	Miscellaneous
	 

	Airport parking - Long term
Lands’ End business related telephone expenses
Internet service fees (e.g., hotel/airport wireless, Hot Spot) required for business - up to $10 per day
	Personal travel insurance
Personal entertainment i.e. movies
Health club
Theft or loss of personal property
Laundry or dry cleaning
Valet service
Any unreasonable, unaccounted for, or unexplained expenses

D. Reservation Process
LANDS’ END may require the use of their online travel reservation system, depending on variables such as the amount of travel on LANDS’ END business, type of travel required, etc.  This will be determined on an individual service provider basis.

 E. Air Transportation
		
	•
	When possible, travelers should plan business trips at least 14 days in advance to secure reduced fares.

		
	•
	Travelers are strongly encouraged to accept the lowest priced flight available within a 2 hour window.  This includes alternate airports, connections, one-stop flights, etc.  If lowest fares are not utilized,   reimbursement may be subject to further review, resulting in partial reimbursement.

		
	•
	When non-refundable tickets are the least expensive airfare, they should be utilized.

		
	•
	If a trip is cancelled or postponed, airline tickets must be cancelled before the time of departure.

		
	•
	Additional airfares, and other fees due to changes, will be reimbursed only if the change was requested by Lands’ End, and the additional expense was approved in advance by Lands’ End. 

		
	•
	Only a reasonable number of travelers will be reimbursed.  This is subject to pre-approval.

25

F. Ground Transportation
		
	•
	Travelers should use courtesy or other scheduled services provided by the hotel (if available) for travel between the hotel and airport.  

		
	•
	Economy or compact cars should be rented unless the size of the group makes them impractical.   Rental cars should be shared whenever feasible.

G. Lodging
		
	•
	If a reserved room will not be used, it is the traveler’s responsibility to notify the hotel directly, prior to the hotel’s cancellation deadline.  Failure to cancel a hotel reservation will result in a “no-show” charge that will not be reimbursed.

H. Meals
		
	•
	Meal expense limits:

		
	◦
	$30 per day, plus gratuity

		
	▪
	Individual meal limit of $5 breakfast, $9 lunch and $16 dinner applies when the travel schedule includes partial travel days.

		
	•
	Exceptions:

		
	◦
	$50 per day, plus gratuity - Boston, Chicago (Downtown only), Honolulu, Los Angeles, New York, San Diego, San Francisco, Seattle, Washington,   D. C., and International destinations including Puerto Rico and Canada

		
	▪
	Individual meal limit of $7 breakfast, $13 lunch and $30 dinner applies when the travel schedule includes partial travel days.

		
	•
	Fifteen percent (15%) is the recommended guideline for gratuities.

STATEMENTS AND PAYMENTS 
A. Statement Period. 
Invoices with supporting documentation shall be submitted monthly to the appropriate Lands’ End Project Manager. Two copies of each invoice should be submitted. 

B. Timing of Bills, Payment.
 Monthly invoices with supporting documentation should be received by the Land’s End Project Manager before the end of the succeeding month. Billing statements for all December charges should be received by Lands’ End before the 15th of January. All bills must be examined for accuracy and completeness prior to submission to Lands’ End. 

C. Invoice Format Requirements. 
Each invoice must include the complete name of the project or Statement of Work, Lands’ End project/job number if appropriate, and the name of the Lands’ End Project Manager. 

Fees and expenses must be itemized by period, activity performed, hours per activity and include the expenses and billing rate of each individual providing service. 

The service provider should indicate the amount of time charged for special services or conferences separately from other daily service activities on the billing statement. The service provider staff should indicate the amount of time charged in preparation for attendance at special services or conferences separately from the amount of time charged for attendance at the event. 
Invoices must be accompanied by a separate page containing a summary of fees and expenses charged by each worker in a spreadsheet format. 

Where more than one service is performed under a SOW and both are covered by a single invoice, the invoice should have a summary sheet of all services billed that month, with a list of separate service totals. 
Detailed description of activities performed for each service should follow the summary on separate pages, with a new page for each separate billed service. 

26

D. Final Invoices. 
Lands’ End must receive the final invoice for a service within 90 days after the Statement of Work is completed. The final invoice must include all costs and expenses incurred in such service not previously billed. The service provider shall not incur any additional costs or billable hours after submission of the final invoice without the express prior written approval of Lands’ End. 

E. Unpaid Balances. 
Do not add any unpaid balances to current charges. Any statements representing unpaid services must be resubmitted with supporting documentation, excluding any claimed interest. Send inquiries regarding any unpaid balances to the Lands’ End Project Manager.

27Exhibit 4.18

 

[●] Shares

 

PROTEA
BIOSCIENCES GROUP, INC.

 

Common Stock

 

UNDERWRITING
AGREEMENT

 

[●], 2016

 

Laidlaw & Company (UK) Ltd.

as Representative of the several

Underwriters named in Schedule I hereto

 

c/o Laidlaw & Company (UK) Ltd.

546 Fifth Avenue, 5th Floor

New York, New York 10036

 

Ladies and Gentlemen:

 

Protea Biosciences
Group, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions contained
in this agreement (this “Agreement”), to sell to you and the other underwriters named on Schedule
I hereto (collectively, the “Underwriters”), for whom you are acting as Representative (the “Representative”),
an aggregate of [●] shares (the “Firm Shares”) of the Company’s common stock, $0.0001 par
value per share (which, after giving effect to the Stock Split (as defined in Section 2(r) of this Agreement) is hereinafter referred
to as the “Common Stock”). The respective amounts of the Firm Shares to be purchased by each of the
several Underwriters are set forth opposite their names on Schedule I hereto. In addition, the Company proposes to grant
to the Underwriters an option to purchase up to an additional [●] shares (the “Option Shares”)
of Common Stock from the Company for the purpose of covering over-allotments in connection with the sale of the Firm Shares. The
Firm Shares and the Option Shares are collectively referred to herein as the “Shares.”

 

The Company has prepared
and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of
1933, as amended (the “Securities Act”), and the published rules and regulations thereunder (the “Rules”)
adopted by the Commission, a Registration Statement (as hereinafter defined) on Form S-1 (No. 333-211674), including a Preliminary
Prospectus (as hereinafter defined), and such amendments thereof as may have been required to the date of this Agreement. Copies
of such Registration Statement (including all amendments thereof) and of the related Preliminary Prospectus have heretofore been
delivered by the Company to you. The term “Preliminary Prospectus” means any preliminary prospectus
included at any time as a part of the Registration Statement or filed with the Commission by the Company pursuant to Rule 424(a)
of the Rules. The term “Registration Statement” as used in this Agreement means the initial registration
statement (including all exhibits, financial schedules and all documents and information deemed to be a part of the Registration
Statement), as amended at the time and on the date it becomes effective (the “Effective Date”), including
the information (if any) contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules
and deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of the Rules. If the Company has filed an abbreviated
registration statement to register additional Shares pursuant to Rule 462(b) under the Rules (the “462(b) Registration
Statement”), then any reference herein to the Registration Statement shall also be deemed to include such 462(b)
Registration Statement. The term “Prospectus” as used in this Agreement means the prospectus in the
form included in the Registration Statement at the time of effectiveness or, if Rule 430A of the Rules is relied on, the term
Prospectus shall also include the final prospectus filed with the Commission pursuant to and within the time limits described
in Rule 424(b) of the Rules.

 

     

     

    

 

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

 

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

 

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

 

(b)          The
Company hereby grants to the Representative an option to purchase, severally and not jointly, all or any part of the Option Shares
at the Initial Price. Such option may be exercised only to cover over-allotments in the sales of the Firm Shares by the Underwriters
and may be exercised in whole or in part at any time and from time to time within 45 days after the date of this Agreement, in
each case upon written, facsimile transmission or e-mail notice, or verbal or telephonic notice confirmed by written, facsimile
transmission or e-mail notice, by the Representative to the Company no later than 12:00 noon, New York City time, on the business
day before the Firm Shares Closing Date (as hereinafter defined) or at least two business days before the Option Shares Closing
Date (as hereinafter defined), in each case for Option Shares to be delivered on such date, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm Shares Closing Date) of such purchase.

 

(c)          Payment
of the purchase price for, and delivery of the Firm Shares in accordance with Section 1(e), shall be made at the offices
of Laidlaw & Company (UK) Ltd., 546 Fifth Avenue, 5th Floor, New York, New York 10036, at 10:00 a.m., New York
City time, on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day following
the date of this Agreement or at such time on such other date, not later than five business days after the date of this Agreement
(unless postponed in accordance with the provisions of Section 8), as shall be agreed upon by the Company and the Representative
(such time and date of delivery and payment are called the “Firm Shares Closing Date”). In addition,
in the event that any or all of the Option Shares are purchased by the Underwriters, payment of the purchase price, and delivery
of the Option Shares in accordance with Section 1(e) shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Representative and the Company, on each date of delivery as specified in the notice from the Representative
to the Company (such time and date of delivery and payment are called the “Option Shares Closing Date”).
The Firm Shares Closing Date and any Option Shares Closing Date are called, individually, a “Closing Date”
and, together, the “Closing Dates.”

 

    	 	2	 

     

    

 

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

 

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

 

(f)          The
Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Firm Shares Closing Date a warrant
to purchase an aggregate of [●] shares of Common Stock, representing 5% of the Firm Shares (excluding the Option Shares),
for an aggregate purchase price of $100.00 (the “Representative’s Warrant”). The Representative’s
Warrant, in the form attached hereto as Exhibit C, shall be exercisable, in whole or in part, commencing on the date
that is six months after the effective date of the Registration Statement and expiring on the five-year anniversary of the effective
date of the Registration Statement at an initial exercise price per share of Common Stock of $[●], which is equal to 100%
of the Initial Price. The Representative’s Warrant and the shares of Common Stock issuable upon exercise thereof are hereinafter
referred to together as the “Representative’s Securities”. The Representative understands and
agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Securities
during the 180 days after the effective date of the Registration Statement and by its acceptance thereof shall agree that it will
not sell, transfer, assign, pledge or hypothecate the Representative’s Securities, or any portion thereof, or be the subject
of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the
Representative’s Securities for a period of 180 days following the effective date of the Registration Statement to anyone
other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of
the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up
restrictions. The Representative’s Warrant shall be issued in the name or names and in such authorized denominations as
the Representative may request.

 

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

 

    	 	3	 

     

    

 

(a)          On
the Effective Date, the Registration Statement complied, and on the date of the Prospectus, the date any post-effective amendment
to the Registration Statement becomes effective, the date any supplement or amendment to the Prospectus is filed with the Commission
and each Closing Date, the Registration Statement and the Prospectus (and any amendment thereof or supplement thereto) will comply,
in all material respects, with the requirements of the Securities Act and the Rules and the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the rules and regulations of the Commission thereunder. The Registration
Statement did not, as of the Effective Date, contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements therein not misleading; and on the Effective Date and
the other dates referred to above, neither the Registration Statement nor the Prospectus, nor any amendment thereof or supplement
thereto, will contain any untrue statement of a material fact or will omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. When any Preliminary Prospectus was first filed with the
Commission (whether filed as part of the Registration Statement or any amendment thereto or pursuant to Rule 424(a) of the Rules)
and when any amendment thereof or supplement thereto was first filed with the Commission, such Preliminary Prospectus as amended
or supplemented complied in all material respects with the applicable provisions of the Securities Act and the Rules and did not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading. If applicable, each Preliminary Prospectus and the Prospectus delivered
to the Underwriters for use in connection with the offering of the Shares was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to the Commission’s Electronic Data Gathering, Analysis and Retrieval system
(“EDGAR”), except to the extent permitted by Regulation S-T. Notwithstanding the foregoing, none of
the representations and warranties in this Section 2(a) shall apply to statements in, or omissions from, the Registration
Statement, any Preliminary Prospectus or the Prospectus made in reliance upon, and in conformity with, information herein or otherwise
furnished in writing by the Representative on behalf of the several Underwriters specifically for use in the Registration Statement,
any Preliminary Prospectus or the Prospectus, as the case may be. With respect to the preceding sentence, the Company acknowledges
that the only information furnished in writing by the Representative on behalf of the several Underwriters for use in the Registration
Statement, any Preliminary Prospectus or the Prospectus consists of the following information: (i) the names of the several Underwriters,
[(ii) the statements contained under the subcaptions entitled (A) “Stabilization, Short Positions and Penalty Bids”
and (B) “Electronic Distribution” under the caption “Underwriting” in the Prospectus, (iii) the concession
and reallowance figures appearing in the first paragraph under the subcaption “Commissions and Discounts” under the
caption “Underwriting” in the Prospectus; (collectively, the “Underwriter Information”).

 

(b)          As
of the Applicable Time (as hereinafter defined), none of (i) the information set forth on Schedule II hereto and the Statutory
Prospectus, all considered together (collectively, the “General Disclosure Package”), (ii) any individual
Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, and (iii) any individual Written
Testing-the -Waters Communication (as hereinafter defined), when considered together with the General Disclosure Package, included
or includes as of their dates any untrue statement of a material fact or omitted, omits or will omit to state any material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements
in or omissions in the General Disclosure Package made in reliance upon and in conformity with written information furnished to
the Company through the Representative by or on behalf of any Underwriter specifically for inclusion therein, which information
the parties hereto agree is limited to the Underwriter Information.

 

    	 	4	 

     

    

 

Each Issuer Free Writing
Prospectus, including any electronic road show (including without limitation any “bona fide electronic road show”
as defined in Rule 433(h)(5) under the Securities Act) (each, a “Road Show”) (i) is identified in Schedule
III hereto, and (ii) complied when issued, and complies, in all material respects with the requirements of the Securities
Act, the Rules and the Exchange Act and the rules and regulations of the Commission thereunder. The Company has made at least
one version of the Road Show available without restriction by means of graphic communication to any person, including any potential
investor in the Shares (and if there is more than one version of a Road Show for the offering that is a written communication,
the version available without restriction was made available no later than the other versions).

 

As used in this Section
and elsewhere in this Agreement:

 

“Applicable
Time” means [●]:00 [a.m.]/[p.m.] (Eastern time) on the date of this Agreement.

 

“Statutory
Prospectus” as of any time means the Preliminary Prospectus relating to the Shares that is included in the Registration
Statement immediately prior to the Applicable Time.

 

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

 

(c)          The
Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of any Preliminary Prospectus, the Prospectus or any “free writing
prospectus”, as defined in Rule 405 under the Rules, has been issued by the Commission and no proceedings for that purpose
have been instituted or are threatened under the Securities Act. Any required filing of any Preliminary Prospectus and/or the
Prospectus and any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and within the
time period required by such Rule 424(b). The Company has not, directly or indirectly, distributed and will not distribute any
offering material in connection with the offering and sale of the Shares other than any Preliminary Prospectus, the Prospectus
and other materials, if any, permitted under the Securities Act and consistent with Section 4(a) below. Any material required
to be filed by the Company pursuant to Rule 433(d) or Rule 163(b)(2) of the Rules has been or will be made in the manner and within
the time period required by such Rules.

 

(d)          Each
Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent times through the completion of the public
offer and sale of the Shares or until any earlier date that the Company notified or notifies the Representative, as described
in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, the Statutory Prospectus or the Prospectus.

 

    	 	5	 

     

    

 

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

 

(e)          The
financial statements of the Company (including all notes and schedules thereto) included in the Registration Statement, the Statutory
Prospectus and Prospectus present fairly the financial position of the Company at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company for the periods specified; and such financial statements and related
schedules and notes thereto, and the unaudited financial information filed with the Commission as part of the Registration Statement,
have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”),
consistently applied throughout the periods involved. No other financial statements or supporting schedules or exhibits are required
by Regulation S-X to be described or included in the Registration Statement, the General Disclosure Package or the Prospectus.
The summary and selected financial data included in the Statutory Prospectus and Prospectus present fairly the information shown
therein as at the respective dates and for the respective periods specified and have been presented on a basis consistent with
the consolidated financial statements set forth in the Prospectus and other financial information. The pro forma financial information
included in the Registration Statement, the Statutory Prospectus and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial information
and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All
disclosures contained in the Registration Statement, the General Disclosure Package or the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation
G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration
Statement, the General Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements,
obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons
that may have a material current or, to the Company’s knowledge, future effect on the Company’s financial condition,
results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, (i) the Company has not
incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in
the ordinary course of business, (ii) the Company has not declared or paid any dividends or made any distribution of any kind
with respect to its capital stock, (iii) there has not been any change in the capital stock of the Company, or, other than in
the ordinary course of business, any grants under any stock compensation plan, and (iv) there has not been any Material Adverse
Change in the Company’s long-term or short-term debt.

 

    	 	6	 

     

    

 

(f)          Schneider
Downs & Co., Inc. (the “Auditor”) whose reports are filed with the Commission as a part of the Registration
Statement, are and, during the periods covered by their reports, were independent public accountants as required by the Securities
Act and the Rules.

 

(g)          The
Company is duly organized, validly existing and in good standing under the laws of the State of Delaware, and the Company has
all requisite corporate power and authority to carry on its business as is currently being conducted as described in the Statutory
Prospectus and the Prospectus, and to own, lease and operate its properties. The Company holds no equity interest in any other
corporation, partnership, joint venture, association or other business organization. The Company is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by it or location
of the assets or properties owned, leased or licensed by it requires such qualification, except for such jurisdictions where the
failure to so qualify individually or in the aggregate would not have a material adverse effect on the assets, properties, condition,
financial or otherwise, or in the results of operations, business affairs or business prospects of the Company (a “Material
Adverse Effect”); and to the Company’s knowledge, no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification.

 

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

 

(i)          (i)
At the time of filing the Registration Statement and (ii) at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 of the Rules.

 

    	 	7	 

     

    

 

(j)          Except
as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus, the Company
owns or possess adequate rights to use all patents, patent applications, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures),
trademarks, trademark registrations, service marks, service mark registrations, trade names, mask work rights and other intellectual
property necessary to carry on the business now operated by it or proposed to be operated by it as described in the Registration
Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus (collectively, the “Intellectual
Property”). Except as disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus
and the Prospectus, there is no litigation or other proceeding pending or, to the Company’s knowledge, threatened and no
claims are presently being asserted by any third party challenging or questioning the ownership, validity, or enforceability of
the Company’s right to use or own any Intellectual Property or asserting that the use of the Intellectual Property by the
Company or the operation of the Company’s business infringes upon or misappropriates any asserted rights of a third party,
and to the Company’s knowledge, there are no facts which would form a reasonable basis for any such claim. The Company has
not received a notice (written or otherwise) that any of the Intellectual Property has expired, been terminated or abandoned.
To the Company’s knowledge, there is no infringement of or conflict with asserted rights of others with respect to any of
the Company’s Intellectual Property or the operation of the Company’s business. To the Company’s knowledge,
there are no facts or circumstances which would render any of the Company’s Intellectual Property invalid or inadequate
to protect the interests of the Company therein, or with respect to the patent applications contained in the Intellectual Property,
unpatentable. Except as would not, individually or in the aggregate, have a Material Adverse Effect, to the Company’s knowledge,
(i) there is no infringement by third parties engaged in commercial activity of any Intellectual Property of the Company relating
to the Company’s business, and (ii) there are no non-commercial activities being performed by any third parties which, upon
commercialization thereof, would reasonably be expected to infringe on the Intellectual Property of the Company. The Company has
taken all steps reasonably necessary to perfect its ownership of and interest in the Intellectual Property. All licenses for the
use of the Company’s Intellectual Property described in the General Disclosure Package and the Prospectus are valid, binding,
and enforceable, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to or affecting creditors’ rights and remedies generally, and subject, as to enforceability,
to general principles of equity and, with respect to equitable relief, the discretion of the court before which any proceeding
therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity), and with respect to
indemnification thereunder, except as rights may be limited by applicable law or policies underlying such law. The Company 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 to any
Intellectual Property license. The Company has taken all reasonable actions to obtain ownership of all works of authorship and
inventions made by its employees, consultants and contractors during the time they were employed by or under contract with the
Company and which relate to the Company’s business. All key employees have signed confidentiality and invention assignment
agreements with the Company.

 

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

 

    	 	8	 

     

    

 

(l)          Since
the date of the most recent financial statements of the Company included in the Registration Statement, the General Disclosure
Package, the Statutory Prospectus and the Prospectus: (i) there has not been any event which would have a Material Adverse Effect;
(ii) the Company has not sustained any material loss or interference with its assets, businesses or properties (whether owned
or leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree; and (iii) the Company has not (A) issued any securities
or incurred any liability or obligation, direct or contingent, for borrowed money, except such liabilities or obligations incurred
in the ordinary course of business, (B) entered into any transaction not in the ordinary course of business, or (C) declared or
paid any dividend or made any distribution on any shares of its stock, except in each case as disclosed in the Registration Statement,
the General Disclosure Package, the Statutory Prospectus and the Prospectus.

 

(m)          There
is no document, contract or other agreement required to be described in the Registration Statement, the Statutory Prospectus or
the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required by the Securities
Act or Rules. Each description of a contract, document or other agreement in the Registration Statement, the Statutory Prospectus
or the Prospectus accurately reflects in all material respects the terms of the underlying contract, document or other agreement.
Each contract, document or other agreement described in the Registration Statement, the Statutory Prospectus or the Prospectus
or listed in the exhibits to the Registration Statement to which the Company is a party or to which its assets are bound is in
full force and effect and is valid and enforceable by and against the Company in accordance with its terms except as enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating
to or affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity
and, with respect to equitable relief, the discretion of the court before which any proceeding therefor may be brought (regardless
of whether enforcement is sought in a proceeding at law or in equity), and with respect to indemnification thereunder, except
as rights may be limited by applicable law or policies underlying such law. The Company is not and, to the Company’s knowledge,
no other party is, in material default in the observance or performance of any term or obligation to be performed by it under
any such agreement, and no event has occurred which with notice or lapse of time or both would constitute such a material default.
No material default exists, and no event has occurred which with notice or lapse of time or both would constitute a material default,
in the due performance and observance of any term, covenant or condition, by the Company of any other agreement or instrument
to which the Company is a party or by which the Company or its properties or business may be bound or affected.

 

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

 

(o)          The
Company is not (i) in violation of its certificate of incorporation, by-laws or other organizational documents, (ii) in default
under, and no event has occurred which, with notice or lapse of time, or both, would constitute a default under, or result in
the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity,
trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever, upon, any property or assets
of the Company pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, or (iii) in
violation of any statute, law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or
other legal or governmental agency or body, foreign or domestic, except (in the case of clauses (ii) and (iii) above) for violations
or defaults that would not have a Material Adverse Effect.

 

    	 	9	 

     

    

 

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

 

(q)          Neither
the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the Stock Split (as defined below) and the issuance and sale by the Company of the Shares)
will (i) give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in
the breach of any term or provision of, or constitute a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the execution or imposition of any lien, charge or encumbrance upon any properties or
assets of the Company pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which
the Company is a party or by which the Company or any of its properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the Company, except in each case as would not have a Material
Adverse Effect; or (ii) violate any provision of the charter or by-laws of the Company.

 

(r)          Upon
completion of the reverse stock split as described under “Reverse Stock Split” in the General Disclosure Package,
the Statutory Prospectus and the Prospectus (the “Stock Split”), the Company has authorized and outstanding
capital stock as set forth under the captions “Capitalization” in the Statutory Prospectus and the Prospectus. All
of the issued and outstanding shares of Common Stock have been duly and validly issued, are fully paid and nonassessable and are
not subject to any statutory preemptive or other similar rights that have not been duly waived or satisfied. The Shares, when
issued and paid for by the Underwriters pursuant to this Agreement, will be duly and validly issued, fully paid and nonassessable
and none of them will be issued in violation of any preemptive or other similar right. The shares of Common Stock issuable upon
exercise of the Representative’s Warrant will be, upon issuance of the Representative’s Warrant, duly authorized and
validly reserved for issuance upon exercise of the Representative’s Warrant in a number sufficient to meet the exercise
requirement thereunder and, when paid for and issued in accordance with the terms of the Representative’s Warrant, such
shares of Common Stock will be duly and validly issued, fully paid and nonassessable. The Shares and Representative’s Securities
conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. Except as disclosed in or expressly contemplated by the Registration Statement, the General Disclosure
Package, the Statutory Prospectus and the Prospectus, there is no outstanding option, warrant or other right calling for the issuance
of, and there is no commitment, plan or arrangement to issue, any share of stock of the Company or any security convertible into,
or exercisable or exchangeable for, such stock. All grants of options to acquire Common Stock outstanding as of the date hereof
(each, a “Company Stock Option”) were validly issued and properly approved by the Board of Directors
of the Company in compliance in all material respects with all applicable laws and the terms of the plans under which such Company
Stock Options were issued and were recorded on the Company’s financial statements, in accordance with GAAP. The Common Stock
and the Shares conform in all material respects to all statements in relation thereto contained in the Registration Statement,
the Statutory Prospectus and the Prospectus.

 

    	 	10	 

     

    

 

(s)          Except
as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, no holder of any security of the Company
has any right, which has not been waived, to have any security owned by such holder included in the Registration Statement or
to demand registration of any security owned by such holder for a period of 180 days after the date of this Agreement.

 

(t)          Except
as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, there is no legal or governmental proceeding
to which the Company is a party or of which any property or assets of the Company is the subject, including any proceeding before
the FDA or comparable federal, state, local or foreign governmental bodies (it being understood that the interaction between the
Company and the FDA and such comparable governmental bodies relating to the clinical development and product approval process
shall not be deemed proceedings for purposes of this representation), which is required to be described in the Registration Statement,
the General Disclosure Package or the Prospectus and is not described therein, or which, singularly or in the aggregate, if determined
adversely to the Company, would have a Material Adverse Effect; and to the Company’s knowledge, no such proceedings are
threatened, by governmental authorities or others.

 

(u)          All
necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance
of this Agreement by the Company and the issuance and sale of the Shares and the Representative’s Warrant (including the
shares of Common Stock issuable upon exercise of the Representative’s Warrant) by the Company.

 

(v)         The
Company is not involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened, which dispute
would have a Material Adverse Effect. To the Company’s knowledge, there is no existing or imminent labor disturbance by
the employees of any of its principal suppliers or contractors which would have a Material Adverse Effect. To the Company’s
knowledge, there is no threatened or pending litigation between the Company and any of its executive officers which, if adversely
determined, would have a Material Adverse Effect and has no reason to believe that such officers will not remain in the employment
of the Company.

 

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

 

(x)          The
Company has not taken, directly or indirectly, any action designed to or which might reasonably be expected to cause or result
in the stabilization or manipulation of the price of the Common Stock to facilitate the sale of any of the Shares.

 

    	 	11	 

     

    

 

(y)          The
Company has filed all Federal, state, local and foreign tax returns which are required to be filed through the date hereof, or
has received timely extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the
extent that the same are material and have become due, except assessments against which appeals have been or will be promptly
taken and as to which adequate reserves in conformity with GAAP have been provided and except as would not have a Material Adverse
Effect. There are no tax audits or investigations pending, which if adversely determined would have a Material Adverse Effect;
nor are there any material proposed additional tax assessments against the Company. The accruals and reserves on the books and
records of the Company 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.

 

(z)          The
Shares have been approved for listing on the Nasdaq Capital Market, subject to official notice of issuance. A registration statement
has been filed on Form 8-A pursuant to Section 12(b) of the Exchange Act, which registration statement complies in all material
respects with the Exchange Act.

 

(aa)         The
books, records and accounts of the Company accurately and fairly reflect the transactions in, and dispositions of, the assets
of, and the results of operations of, the Company. The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization,
and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

 

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

 

(cc)         Except
as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, based on the evaluation of its disclosure
controls and procedures, to the Company’s knowledge, there is no (i) material weakness or significant deficiency in the
design or operation of internal controls which would adversely affect the Company’s ability to record, process, summarize
and report financial data or any material weaknesses in internal controls; or (ii) fraud, whether or not material, that involves
management or other employees who have a role in the Company’s internal controls.  Since
the end of the latest audited fiscal year, there has been no change in the Company’s internal control over financing reporting
that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial
reporting.

 

    	 	12	 

     

    

 

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

 

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

 

(ff)         Effective
upon the consummation of the offering of the Firm Shares as contemplated hereby, the Company’s Board of Directors has validly
appointed an audit committee whose composition satisfies the requirements of Rule 5605 of the NASDAQ Stock Market and the Board
of Directors and/or the audit committee has adopted a charter that satisfies the requirements of Rule 5605 of the NASDAQ Stock
Market.

 

(gg)         The
Company is actively taking steps to ensure that it will be in compliance with all applicable provisions of the Sarbanes-Oxley
Act of 2002, as amended (the “Sarbanes-Oxley Act”), any related rules and regulations promulgated by
the Commission and corporate governance requirements under applicable regulations of The Nasdaq Stock Market LLC (“Nasdaq”)
upon the effectiveness of such provisions and has no reason to believe that it will not comply with such provisions at the time
of effectiveness. There is and has been no failure on the part of the Company or any of its directors or officers, in their capacities
as such, to comply with any provision of the Sarbanes-Oxley Act, including, without limitation, Section 402 related to loans and
Sections 302 and 906 related to certifications.

 

(hh)         The
Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are
customary in the businesses in which they are engaged or propose to engage after giving effect to the transactions described in
the Statutory Prospectus and the Prospectus; and the Company has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as
may be necessary to continue its business. All policies of insurance owned by the Company
are, to the Company’s knowledge, in full force and effect and the Company is in compliance in all material respects with
the terms of such policies.  The Company has not been denied any insurance coverage
which it has sought or for which it has applied.

 

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

 

    	 	13	 

     

    

 

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

 

(kk)         (i)
The Company is in compliance in all material respects with all rules, laws and regulations relating to the use, treatment, storage
and disposal of toxic substances and protection of health or the environment (“Environmental Laws”)
which are applicable to its business; (ii) the Company has not received any notice from any governmental authority or third party
of an asserted claim under Environmental Laws; (iii) the Company has received all permits, licenses or other approvals required
of it under applicable Environmental Laws to conduct its business and is in compliance in all material respects with all terms
and conditions of any such permit, license or approval; and (iv) to the Company’s knowledge, no facts currently exist that
will require the Company to make future material capital expenditures to comply with Environmental Laws.

 

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

 

(mm)         Neither
the Company nor, to the Company’s knowledge, any other person associated with or acting on behalf of the Company including,
without limitation, any director, officer, agent or employee of the Company, has not, directly or indirectly, while acting on
behalf of the Company (i) used any Company funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended; or (iv) made any other unlawful payment.

 

(nn)         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 involving
the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(oo)         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, 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.

 

    	 	14	 

     

    

 

(pp)         The
Company has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the U.S. Employee Retirement
Income Security Act of 1974 (“ERISA”) and the regulations and published interpretations thereunder with
respect to each “plan” as defined in Section 3(3) of ERISA and such regulations and published interpretations in which
its employees are eligible to participate and each such plan is in compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations. No “Reportable Event” (as defined in 12 ERISA)
has occurred with respect to any “Pension Plan” (as defined in ERISA) for which the Company would have any liability.

 

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

 

(rr)         From
the time of initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on
which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication
(as hereinafter defined)) through the date hereof, the Company has been and is an “emerging growth company,” as defined
in Section 2(a) of the Securities Act (an “Emerging Growth Company”). For purposes of this Agreement,
“Testing-the-Waters Communication” means any oral or written communication with potential investors
undertaken in reliance on Section 5(d) of the Securities Act.

 

(ss)         The
Company (a) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the
consent of the Representative with entities that are qualified institutional buyers within the meaning of Rule 144 promulgated
under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act,
and (b) has not authorized anyone other than the Underwriters to engage in Testing-the-Waters Communications. The Company reconfirms
that the Underwriters have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company
has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule IV hereto. For purposes
of this Agreement, “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication
that is a written communication within the meaning of Rule 405 under the Securities Act.

 

(tt)         Except
as set forth in the Registration Statement, the Company has such permits, licenses, certificates, approvals, clearances, authorizations
or amendments thereto (the “Regulatory Permits”) issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business of the Company as described in the Registration Statement;
including, without limitation, any Investigational New Drug Application (“IND”) as required by the U.S.
Food and Drug Administration (the “FDA”) or other authorizations issued by federal, state, local or
foreign agencies or bodies engaged in the regulation of pharmaceuticals such as those being developed by the Company (collectively,
“Governmental Authorities,” and each, a “Governmental Authority”), except
for any of the foregoing that would not, individually or in the aggregate, have a Material Adverse Effect. The Company is in compliance
in all material respects with the requirements of the Regulatory Permits, and all of the Regulatory Permits are valid and in full
force and effect, in each case in all material respects; except as set forth in the Registration Statement, the Statutory Prospectus
and the Prospectus, the Company has not received any notice of proceedings relating to the revocation, termination, modification
or impairment of rights of any of the Regulatory Permits that, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would not have a Material Adverse Effect. The Company and, to the Company’s knowledge, its
respective directors, officers, employees or agents, are and have been in compliance in all material respects with applicable
federal, state, local and foreign health care regulatory laws, including, without limitation, laws related to fraud and abuse,
payment transparency, and privacy and security of protected health information (collectively, “Health Care Laws”).
The Company has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration
or other action from any court, arbitrator or governmental or regulatory authority or third party alleging that the Company or
its personnel has violated any applicable Health Care Law, nor to the Company’s knowledge has any such claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action been threatened.

 

    	 	15	 

     

    

 

(uu)         The
preclinical studies and clinical trials (collectively, the “Studies”) that are being conducted by or,
to the Company’s knowledge, on behalf of the Company, and which are described in the Registration Statement, or the results
of which are referred to in the Registration Statement, were and, if still pending, are being conducted in all material respects
in accordance with the protocols, procedures and controls designed and approved for such Studies and with standard medical and
scientific research procedures; each description of the results of such Studies contained in the Registration Statement is, to
the Company’s knowledge, accurate and complete in all material respects and fairly presents the data derived from such Studies,
and, except to the extent disclosed in the Registration Statement, the General Disclosure Package, the Statutory Prospectus, the
Prospectus and any individual Issuer Free Writing Prospectus, the Company has no knowledge of any other studies the results of
which the Company believes are inconsistent with, or otherwise reasonably call into question, the results described or referred
to in the Registration Statement; except as set forth in the Registration Statement, the General Disclosure Package, the Statutory
Prospectus and the Prospectus, the Company has not received any notice of, or correspondence from, any Governmental Authority
requiring the termination or suspension of any clinical trials or other Studies conducted by or on behalf of the Company that
are described or referred to in the Registration Statement, other than ordinary course communications with respect to modifications
in connection with the design and implementation of such Studies. Except as set forth in the Registration Statement, the Statutory
Prospectus and the Prospectus, the Company has complied in all material respects with all applicable laws and regulatory rules
or requirements, including, without limitation, the Health Insurance Portability and Accountability Act of 1996 and the rules
and regulations thereunder. 

 

(vv)         No
relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, stockholders
(or analogous interest holders), customers or suppliers of the Company or any of its affiliates on the other hand, which is required
to be described in the General Disclosure Package and the Prospectus and which is not so described.

 

(ww)         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 Prospectus has been made or reaffirmed without a reasonable basis or
has been disclosed other than in good faith.

 

    	 	16	 

     

    

 

(xx)        If
applicable, all of the information provided to the Underwriters or to counsel for the Underwriters by the Company, its officers
and directors in connection with letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rule 5110
or 5121 is, to the Company’s knowledge with respect to all other persons except for the Company, true, correct and complete
in all material respects as of the date hereof.

 

(yy)         There
are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective
family members, except as disclosed in the Registration Statement, the General Disclosure Package and the 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, if and to the extent required under U.S. law.

 

(zz)         Neither
the Company nor, to the Company’s knowledge, any of its affiliates (within the meaning of FINRA 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(ff) of the By-laws of FINRA) of, any of the Underwriters.

 

Any certificate signed
by or on behalf of the Company and delivered to the Representative or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters covered thereby.

 

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

 

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

 

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

 

    	 	17	 

     

    

 

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

 

(d)          The
Representative shall have received on each Closing Date a certificate, addressed to the Representative and dated such Closing
Date, of the chief executive officer or chief operating officer and the chief financial officer or chief accounting officer of
the Company, in such capacity, to the effect that: (i) the representations, warranties and agreements of the Company in this Agreement
were true and correct in all material respects when made and are true and correct as of such Closing Date; (ii) the Company has
performed all covenants and agreements and satisfied all conditions contained herein; (iii) such officers have examined the Registration
Statement, the Prospectus, the General Disclosure Package and any individual Issuer Free Writing Prospectus and, in their opinion,
since the Effective Date, no event has occurred which should have been set forth in a supplement or otherwise required an amendment
to the Registration Statement, the Statutory Prospectus or the Prospectus and which event is not described in the Registration
Statement, the Statutory Prospectus or the Prospectus; (iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and, to their knowledge, no proceedings for that purpose have been instituted or are pending under the Securities
Act; and (v) there has not occurred any Material Adverse Effect.

 

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

 

(f)          The
Representative shall have received on each Closing Date from CKR Law LLP, counsel for the Company, an opinion and written negative
assurances statement, addressed to the Representative and dated such Closing Date, in form and substance reasonably satisfactory
to the Representative and its legal counsel.

 

(g)          The
Representative shall have received on each Closing Date from Cohen & Grigsby, intellectual property counsel for the Company,
an opinion and written negative assurances statement, addressed to the Representative and dated such Closing Date, in form and
substance reasonably satisfactory to the Representative and their legal counsel.

 

    	 	18	 

     

    

 

(h)          The
Representative shall have received on each Closing Date from Sichenzia Ross Friedman Ference LLP, counsel for the Representative,
an opinion, addressed to the Representative and dated such Closing Date, with respect to such matters as the Representative may
reasonably require, and the Company shall have furnished or provided access to such counsel of such documents as they reasonably
request for enabling them to pass upon such matters.

 

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

 

(j)          The
Representative shall have received enforceable written lock-up agreements in the form attached to this Agreement as Exhibit
A attached hereto (“Lock-Up Agreement”) executed by all directors, officers and holders of more
than 5% of the outstanding equity securities of the Company.

 

(k)          The
Shares shall have been approved for listing on the Nasdaq Capital Market, subject only to official notice of issuance. A registration
statement shall have been filed on Form 8-A pursuant to Section 12 of the Exchange Act, which registration statement shall
comply in all material respects with the Exchange Act.

 

(l)          Since
the date of the most recent financial statements of the Company included in the Registration Statement, the General Disclosure
Package, the Statutory Prospectus and the Prospectus, (i) there shall not have been any material change in the capital stock of
the Company or any material change in the indebtedness (other than in the ordinary course of business) of the Company; (ii) except
as set forth or contemplated by the Registration Statement, the Statutory Prospectus, the General Disclosure Package or the Prospectus,
no material oral or written agreement or other transaction shall have been entered into by the Company that is not in the ordinary
course of business or that would reasonably be expected to result in a material reduction in the future earnings of the Company;
(iii) no loss or damage (whether or not insured) to the property of the Company shall have been sustained that would have a Material
Adverse Effect; (iv) no legal or governmental action, suit or proceeding affecting the Company or any of its properties that is
material to the Company or that materially affects or would reasonably be expected to materially affect the transactions contemplated
by this Agreement shall have been instituted or threatened; and (v) there shall not have been any material change in the assets,
properties, condition (financial or otherwise), or in the results of operations, business affairs or business prospects of the
Company that makes it impractical or inadvisable in the Representative’s reasonable judgment to proceed with the purchase
or offering of the Shares as contemplated hereby.

 

(m)          As
of the date hereof, FINRA shall have confirmed that it has not raised any unresolved objection with respect to the fairness and
reasonableness of the underwriting terms and agreements in connection with the offering of the Shares.

 

    	 	19	 

     

    

 

(n)          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 Stock or materially and adversely affect the business
or operations of the Company; 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 Stock or materially and adversely
affect the business or operations of the Company.

 

(o)          As
of each Closing Date, the Representative shall have received a certificate of the Company signed by the Secretary of the Company,
certifying: (i) that the Certificate of Incorporation and bylaws of the Company are true and complete, have not been modified
and are in full force and effect; (ii) that the resolutions relating to the Offering are in full force and effect and have not
been modified; and (iii) as to the incumbency of the officers of the Company to execute and deliver this Agreement and the Registration
Statement.

 

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

 

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

 

(a)          The
Company covenants and agrees as follows:

 

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

 

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

 

    	 	20	 

     

    

 

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

 

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

 

(v)         The
Company shall make generally available to its security holders and to the Representative as soon as practicable an earnings statement
(which need not be audited) of the Company, covering such 12-month period, which shall satisfy the provisions of Section 11(a)
of the Securities Act or Rule 158 of the Rules; provided that the Company will be deemed to have furnished such statements
to its security holders and the Representative to the extent they are filed on EDGAR.

 

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

 

    	 	21	 

     

    

 

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

 

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

 

(ix)         Without
the prior written consent of the Representative, for a period of 90 days after the date of this Agreement, the Company shall not
issue, sell or register with the Commission, or otherwise dispose of, directly or indirectly, any equity securities of the Company
(or any securities convertible into, or exercisable or exchangeable for, equity securities of the Company), except for (a) the
Shares to be sold hereunder; (b) any shares of capital stock of the Company issued upon the exercise of options granted under
the Company’s stock incentive plan described as outstanding in the Registration Statement, the General Disclosure Package,
the Statutory Prospectus and the Prospectus; (c) any options and other awards granted under a Company stock incentive plan described
in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus; (d) the filing by
the Company of any registration statement on Form S-8 or a successor form thereto relating to a Company stock incentive plan described
in the Registration Statement, the General Disclosure Package, the Statutory Prospectus and the Prospectus; (e) shares of capital
stock of the Company or other securities of the Company issued in connection with a transaction with an unaffiliated third party
that includes a bona fide commercial relationship (including joint ventures, marketing or distribution arrangements, collaboration
agreements or intellectual property license agreements) or any acquisition of assets or acquisition of not less than a majority
or controlling portion of the equity of another entity, provided that, the aggregate number of securities of the Company
issued pursuant to this subsection (e) shall not exceed 5% of the Company’s outstanding common stock as of the closing
of the offering of the Shares; and provided further that as a condition to any transfer pursuant to this subsection
(e), any recipient of such shares of capital stock shall first execute and deliver to the Representative an agreement substantially
in the form of the Lock-Up Agreement. In the event that during this period, (I) any shares are issued pursuant to the Company’s
stock incentive plan that are exercisable during such 180 day period or (II) any registration is effected on Form S-8 or on any
successor form relating to shares that are exercisable during such 180 day period, the Company shall obtain the written agreement
of such grantee, purchaser or holder of such registered securities that, for a period of 90 days after the date of this Agreement,
such person will not, without the prior written consent of the Representative, offer for sale, sell, distribute, grant any option
for the sale of, or otherwise dispose of, directly or indirectly, or exercise any registration rights with respect to, any shares
of Common Stock (or any securities convertible into, or exercisable or exchangeable for, any shares of Common Stock) owned by
such person. Notwithstanding the foregoing, the Company represents and warrants that each such grantee or purchaser or holder
of such registered securities shall be subject to similar lock-up restrictions as set forth on Exhibit A attached hereto
and the Company shall enforce such rights and impose stop-transfer restrictions on any such sale or other transfer or disposition
of such shares until the end of the applicable period.

 

    	 	22	 

     

    

 

(x)          If
the Representative agrees to release or waive the restrictions set forth in any Lock-Up Agreement for an officer or director of
the Company and provide the Company with notice of the impending release or waiver at least three business days before the effective
date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially
in the form of Exhibit B attached hereto through a major news service at least two business days before the effective date
of the release or waiver.

 

(xi)         On
or before completion of the offering of the Shares, the Company shall make all filings required under applicable securities laws
and by Nasdaq (including any required registration under the Exchange Act).

 

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

 

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

 

(xiv)      The
Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the
later of (a) completion of the distribution of the Shares within the meaning of the Securities Act and (b) completion of the 90-day
restricted period referred to in Section 4(a)(ix).

 

(xv)       If
at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development
as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly
amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement
or omission.

 

    	 	23	 

     

    

 

(xvi)      The
Company represents and agrees that, unless it obtains the prior consent of the Representative, and each Underwriter represents
and agrees that, unless it obtains the prior consent of the Company and the Representative, it has not made and will not, make
any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 of the Rules
and Regulations (each, a “Permitted Free Writing Prospectus”); provided that the prior
written consent of the Representative shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses included
in Schedule B hereto. The Company represents that it has treated and agrees that it will treat each Permitted
Free Writing Prospectus as an Issuer Free Writing Prospectus and comply with the requirements of Rules 164 and 433 of the Rules
and Regulations applicable to any Issuer Free Writing Prospectus, including the requirements relating to timely filing with the
Commission, legending and record keeping. The Company will satisfy the condition in Rule 433 of the Rules and Regulations to avoid
a requirement to file with the Commission any electronic road show.

 

(xvii)     For
a period of 2 years after the date of this Agreement, the Company shall use its commercially reasonable efforts to maintain the
registration of the shares of Common Stock on the Nasdaq Capital Market.

 

(xviii)    As
of the later of the Closing Dates, if requested by the Representative, the Company shall retain a financial public relations firm
reasonably acceptable to the Representative and the Company, which firm shall be experienced in assisting issuers in public offerings
of securities and in their relations with their security holders, and shall retain such firm or another firm reasonably acceptable
to the Representative for a period of not less than two (2) years after the date of this Agreement.

 

(xix)       Provided
that the Firm Shares are sold in accordance with the terms of this Agreement, the Representative shall have an irrevocable right
of first refusal (the “Right of First Refusal”), for a period of twelve (12) months after the date the Offering
is completed, to act as lead or managing underwriter, exclusive placement agent, exclusive financial advisor or in any other similar
capacity, on the Representative’s customary terms and conditions, in the event the Company or any Subsidiary retains or
otherwise uses (or seeks to retain or use) the services of an investment bank or similar financial advisor to pursue a registered,
underwritten public offering of securities (in addition to the Offering), a private placement of securities, a merger, acquisition
of another company or business, change of control, sale of substantially all assets or other similar transaction (regardless of
whether the Company would be considered an acquiring party, a selling party or neither in such transaction) (each, a “Subject
Transaction”). The Company shall notify the Representative of its intention to pursue a Subject Transaction, including
the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the
Representative.  If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction
within five (5) Business Days after the mailing of such written notice, then the Representative shall have no further claim or
right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise
its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative
shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subject Transaction.  
The terms and conditions of any such engagements shall be set forth in separate agreements and may be subject to, among other
things, satisfactory completion of due diligence by the Representative, market conditions, the absence of a material adverse change
to the Company’s business, financial condition and prospects, approval of the Representative’s internal committee
and any other conditions that the Representative may deem appropriate for transactions of such nature. Notwithstanding the foregoing,
in the event the Subject Transaction involves a public or private sale of securities, the Representative shall be entitled to
receive as its compensation at least 75% of the compensation payable to all underwriters, placement agents or agents in any Subject
Transaction.

 

    	 	24	 

     

    

 

(b)          The
Company agrees to pay, or reimburse if paid by the Representative, whether or not the transactions contemplated hereby are consummated
or this Agreement is terminated, all of the Company’s costs and expenses incident to the public offering of the Shares and
the performance of the obligations of the Company under this Agreement, including those relating to: (i) all filing fees relating
to the registration of the Shares to be sold in the Offering with the Commission; (ii) all actual Corporate Finance Filing System
filing fees associated with the review of the Offering by FINRA; (iii) all fees and expenses relating to the listing of the Shares
on the Nasdaq Capital Market; (iv) all actual fees, expenses and disbursements relating to background checks of the Company’s
officers and directors; (v) all actual fees, expenses and disbursements relating to the registration or qualification of the Shares
under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate
(including, without limitation, all filing and registration fees); (vi) all actual fees, expenses and disbursements relating to
the registration, qualification or exemption of the Shares under the securities laws of such foreign jurisdictions as the Representative
may reasonably designate; (vii) the costs of all mailing and printing of the underwriting documents (including, without limitation,
the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’
Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments,
supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary;
(viii) the costs of preparing, printing and delivering certificates representing the Shares; (ix) fees and expenses of the transfer
agent for the shares of Common Stock; (x) stock transfer and/or stamp taxes, if any, payable upon the transfer of Shares from
the Company to the Underwriters; (xi) the fees and expenses of the Company’s accountants; (xii) the fees and expenses of
the Company’s legal counsel and other agents and representatives; and (xiii) the fees and expenses of the Underwriters’
legal counsel, not to exceed [$120,000] in the aggregate. The Company further agrees that, in addition to the expenses payable
above, on the latest of the Closing Dates, it shall pay to the Representative, by deduction from the net proceeds of the Offering
contemplated herein, a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by the Company
from the sale of the Firm Shares (excluding the Option Shares). The Representative may deduct from the net proceeds of the Offering
payable to the Company on the Firm Shares Closing Date, or the Option Shares Closing Date, if any, the expenses set forth herein
to be paid by the Company to the Underwriters, less the advance contemplated by Section 7(b) hereof; provided, however,
that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 7(b) hereof.

 

    	 	25	 

     

    

 

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

 

5.          Indemnification.

 

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

 

    	 	26	 

     

    

 

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

 

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

 

    	 	27	 

     

    

 

6.          Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section
5(a) or 5(b) is due in accordance with its terms but for any reason is unavailable to or insufficient to hold harmless
an indemnified party in respect to any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate losses, liabilities, claims, damages and expenses (including any investigation, legal
and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding
or any claims asserted, but after deducting any contribution received by any person entitled hereunder to contribution from any
person who may be liable for contribution) incurred by such indemnified party, as incurred, in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering
of the Shares pursuant to this Agreement or, if such allocation is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to above but also the relative fault of the Company on the one hand and the
Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on
the one hand, and the Underwriters on the other, shall be deemed to be in the same respective proportions as the net proceeds
(before deducting expenses) received by the Company from the sale of the Shares and the total underwriting discounts and commissions
received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear
to the aggregate offering price of the Shares. The relative fault of the Company, on the one hand, and the Underwriters on the
other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement
or omission.

 

The Company and the
Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue
or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 6, no Underwriter
(except as may be provided in the Agreement Among Underwriters) shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 6, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, including any person who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of the Section 15 of the Securities Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution
may be made against another party or parties under this Section 6, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than
under this Section 6. No party shall be liable for contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriters’ obligations to contribute pursuant to this Section 6 are several in
proportion to their respective underwriting commitments and not joint.

 

    	 	28	 

     

    

 

7.          Termination.

 

(a)          This
Agreement may be terminated with respect to the Shares to be purchased on a Closing Date by the Representative by notifying the
Company at any time subsequent to the execution of this Agreement and at or before a Closing Date in the absolute discretion of
the Representative if: (i) there has occurred any material adverse change in the securities markets or any event, act or occurrence
that has materially disrupted the securities markets or there shall be such a material adverse change in general financial, political
or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make
it, in the reasonable judgment of the Representative, inadvisable or impracticable to market the Shares or enforce contracts for
the sale of the Shares; (ii) there has occurred any outbreak or material escalation of hostilities or acts of terrorism or other
calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the reasonable
judgment of the Representative, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares;
(iii) trading in the Shares or any securities of the Company has been suspended or materially limited by the Commission or trading
generally on the New York Stock Exchange, Inc. or Nasdaq has been suspended or materially limited, or minimum or maximum ranges
for prices for securities shall have been fixed, or maximum ranges for prices for securities have been required, by any of said
exchanges or by such system or by order of the Commission, FINRA or any other governmental or regulatory authority; (iv) a banking
moratorium has been declared by any state or Federal authority; or (v) in the reasonable judgment of the Representative, there
has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations,
business affairs or business prospects of the Company, whether or not arising in the ordinary course of business.

 

    	 	29	 

     

    

 

(b)          If
this Agreement is terminated pursuant to any of its provisions, the Company shall not be under any liability to any Underwriter,
and no Underwriter shall be under any liability to the Company, except that (i) if this Agreement is terminated by the Representative
or the Underwriters because of any failure, refusal or inability on the part of the Company to comply with the terms or to fulfill
any of the conditions of this Agreement, the Company will reimburse the Underwriters for all reasonable, actual and documented
expenses (including the reasonable, actual and documented fees and disbursements of their counsel) incurred by them in connection
with the proposed purchase and sale of the Shares or in contemplation of performing their obligations hereunder, in an aggregate
amount not to exceed $25,000, inclusive of the $25,000 advance for accountable expenses previously paid by the Company to the
Representative; provided that, it is understood that the Company shall not pay or reimburse any costs, fees or expenses
incurred by an Underwriter that defaults on its obligations to purchase the Shares; and (ii) no Underwriter who shall have failed
or refused to purchase the Shares agreed to be purchased by it under this Agreement, without some reason sufficient hereunder
to justify cancellation or termination of its obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal. Notwithstanding
the foregoing, such expense cap of $25,000 shall not limit or impair the indemnification and contribution provisions of this Agreement
and any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in
compliance with FINRA Rule 5110(f)(2)(C).

 

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

 

    	 	30	 

     

    

 

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

 

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

 

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

 

This Agreement constitutes
the entire agreement of the parties to this Agreement and supersedes all prior or contemporaneous written or oral agreements,
understandings, promises and negotiations with respect to the subject matter hereof. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.

 

The invalidity or
unenforceability of any section, paragraph, clause or provision of this Agreement shall not affect the validity or enforceability
of any other section, paragraph, clause or provision. If any term or provision of this Agreement or the performance thereof shall
be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable
any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.

 

All
notices, consents and other communications under this Agreement must be in writing and will be deemed given (i) upon delivery,
when delivered personally, (ii) on the fifth business day after being mailed by certified mail, return receipt requested, (iii)
the next business day after delivery to a recognized overnight courier, or (iv) upon transmission and confirmation of receipt
if sent by facsimile transmission or e-mail, to the parties at the following addresses or facsimile numbers (or to such other
address or facsimile number as such party may have specified by notice given to the other party pursuant to this provision): (a)
if to the Representative, (I) c/o Laidlaw & Company (UK) Ltd., 546 Fifth Avenue, 5th Floor, New York, New York
10036, Attention: Hugh Regan, Executive Director, Fax Number: (212) 297-0670, with a copy (which shall not constitute notice)
to Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New York, New York 10006, Attention: Richard A. Friedman,
Esq., e-mail: rfriedman@srff.com and (b) if to the Company, to its agent for service as such agent’s address
appears on the cover page of the Registration Statement with a copy (which shall not constitute notice) to CKR Law LLP, 1330 Avenue
of the Americas, 14th Floor, New York, New York 10019, Attention: Stephen A. Weiss, Esq., Fax Number: (212) 259-8200,
email: sweiss@ckrlaw.com.

 

    	 	31	 

     

    

 

This Agreement
shall be deemed to have been executed and delivered in New York City, New York, United States of America, and both this Agreement
and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other
respects by the laws of the State of New York, United States of America, without regard to the conflicts of laws principals thereof
(other than Section 5-1401 of The New York General Obligations Law).

 

Each of the Underwriters
and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the
transactions contemplated hereby shall be instituted exclusively in the Supreme Court of the State of New York, New York County,
or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may have now
or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the Supreme
Court of the State of New York, New York County, or the United States District Court for the Southern District of New York in
any such suit, action or proceeding. Each of the Underwriters and the Company further agrees to accept and acknowledge service
of any and all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York,
New York County, or in the United States District Court for the Southern District of New York and agrees that service of process
upon the Company mailed by certified mail to the Company’s address or delivered by Federal Express via overnight delivery
shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service
of process upon the Underwriters mailed by certified mail to the Underwriters’ address or delivered by Federal Express via
overnight delivery shall be deemed in every respect effective service process upon the Underwriter, in any such suit, action or
proceeding.

 

This Agreement may
be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original and all such counterparts shall together constitute one and the same instrument. Execution and delivery
of a signed counterpart of this Agreement by facsimile or e-mail/.pdf transmission shall constitute valid and sufficient execution
and delivery thereof.

 

The failure of any
of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a
waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of
any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance
or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed
by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance
or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

 

[Signature Page Follows]

 

    	 	32	 

     

    

 

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

 

	 	Very truly yours,
	 	 
	 	PROTEA BIOSCIENCES GROUP, INC.
	 	 	 
	 	By	 
	 	 	Name:
	 	 	Title:

 

	Confirmed:	 	 
	 	 	 
	Acting severally on behalf of itself	 	 
	and as Representative of the several	 	 
	Underwriters named in Schedule I	 	 
	annexed hereto.	 	 
	 	 	 
	LAIDLAW & COMPANY (UK) LTD.	 	 
	 	 	 
	By	 	 	 
	 	Name:	 	 
	 	Title:	 	 

 

[Signature Page to Underwriting Agreement]

 

     

     

    

 

SCHEDULE
I

 

	Name	 	Number of Firm Shares to Be	 	Number of Option Shares to
	 	 	Purchased	 	Be Purchased
	Laidlaw & Company (UK) Ltd.	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Total	 	 	 	 

 

     

     

    

 

SCHEDULE II

 

Pricing Information

 

The initial public offering price per
share for the Shares is $[●].

 

The number of Firm Shares to be purchased
by the Underwriters is [●].

 

The number of Option Shares to be purchased
by the Underwriters is [●].

 

The underwriting discount per share for
the Shares is $[●].

 

The settlement date is [●].

 

     

     

    

 

SCHEDULE III

 

Issuer Free Writing Prospectuses

 

[None]

 

     

     

    

 

SCHEDULE IV

 

Written Testing-the-Waters Communications

 

[●]

 

     

     

    

 

EXHIBIT A

 

Form of Lock-Up Agreement 

_________________, 2016

Laidlaw & Company (UK) Ltd.

As Representative of the Several Underwriters

c/o Laidlaw
& Company (UK) Ltd.

546 Fifth Avenue, 5th Floor

New York, New York 10036

 

		Re:	Public Offering of Protea Biosciences
                                         Group, Inc.

 

Ladies and Gentlemen:

 

The undersigned understands
that you, as Representative (the “Representative”) of the several underwriters, propose to enter into an Underwriting
Agreement (the “Underwriting Agreement”) with Protea Biosciences Group, Inc. (the “Company”),
providing for the public offering (the “Public Offering”) by the several Underwriters named in Schedule
I to the Underwriting Agreement (the “Underwriters”), of shares of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”).

 

In consideration of
the Underwriters’ agreement to enter into the Underwriting Agreement and to proceed with the Public Offering, and for other
good and valuable consideration, the receipt of which is hereby acknowledged, the undersigned hereby agrees for the benefit of
the Company, you and the other Underwriters that, without the prior written consent of the Representative on behalf of the Underwriters,
the undersigned will not, during the period ending 90 days (the “Lock-Up Period”) after the date of the final
prospectus relating to the Public Offering (the “Prospectus”), directly or indirectly (1) offer, pledge, assign,
encumber, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for Common Stock owned either of record or beneficially
(as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by the undersigned on
the date hereof or hereafter acquired (such shares, the “Beneficially Owned Shares”), (2) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Beneficially Owned
Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, or publicly announce an intention to do either of the foregoing, or (3) engage in any
short selling of the Common Stock. In addition, the undersigned agrees that, without the prior written consent of the Representative
on behalf of the Underwriters, the undersigned will not, during the period ending 90 days after the date of the Prospectus, make
any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock. Notwithstanding the foregoing, the undersigned may transfer securities of
the Company (i) as a bona fide gift or gifts; provided that the donee or donees thereof agree in writing to be bound
by the restrictions set forth herein, (ii) pursuant to a valid domestic order or divorce decree or settlement or by will, other
testamentary document or intestate succession upon the death of the undersigned; provided that the transferee agrees in
writing to be bound by the restrictions set forth herein, (iii) to any family member or any trust for the direct or indirect benefit
of the undersigned or the immediate family of the undersigned, provided that such family member or the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not
involve a disposition for value, (iv) if the undersigned is a corporation, limited liability company, partnership, trust or other
business entity, a transfer as part of a transfer or distribution by the undersigned to its stockholders, members, partners, beneficiaries
or other equity holders; provided that the transferee agrees in writing to be bound by the restrictions set forth herein,
and provided further that any such transfer or distribution shall not involve a disposition for value, (v) to the Company
pursuant to the vesting of or exercise by the undersigned of any equity incentive awards issued pursuant to the Company’s
stock option or incentive plans as disclosed in the Prospectus, on a “cashless” or “net exercise” basis
(which, for the avoidance of doubt shall not include “cashless” exercise programs involving a broker or third party);
provided that the Common Stock received upon such exercise shall remain subject to the restrictions set forth herein, (vi)
to the Company pursuant to any contractual arrangement that provides for the repurchase of the undersigned’s Common Stock
or such other securities by the Company or in connection with the termination of the undersigned’s employment or other service
relationship with the Company, or (vii) pursuant to a bona fide third party tender offer, merger, consolidation or other
similar transaction made to all holders of the Company’s capital stock involving a change of control of the Company, provided
that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the undersigned’s
Common Stock shall remain subject to the restrictions set forth herein, and provided further that the consideration per
share of Common Stock paid in such transaction shall be no less than the public offering price per share paid in the Public Offering.

 

    	 	A-1	 

     

    

 

In addition, the restrictions
set forth herein shall not prevent the undersigned from entering into a sales plan pursuant to Rule 10b5-1 under the Exchange
Act after the date hereof, provided that (i) a copy of such plan is provided to the Representative promptly upon entering
into the same and (ii) no sales or transfers may be made under such plan until the Lock-Up Period ends or this Agreement
is terminated in accordance with its terms.

 

If the undersigned
is an officer or director of the Company, the undersigned further agrees that the foregoing restrictions shall be equally applicable
to any issuer-directed shares of Common Stock the undersigned may purchase in the Public Offering.

 

If the undersigned
is an officer or director of the Company: (1) this letter agreement is being delivered in reliance on the agreement of the Representative
that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection
with a proposed transfer of shares of Common Stock by the undersigned, the Representative will notify the Company of the impending
release or waiver, and (2) the undersigned acknowledges that the Company has agreed in the Underwriting Agreement to announce
the impending release or waiver by press release through a major news service at least two business days before the effective
date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall
only be effective two business days after the publication date of such press release. The provisions of this paragraph will not
apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed
in writing to be bound by the same terms described in this letter agreement to the extent and for the duration that such terms
remain in effect at the time of the transfer.

 

    	 	A-2	 

     

    

 

In furtherance of
the foregoing, the Company and any duly appointed transfer agent for the registration or transfer of the securities of the Company
subject to this letter agreement are hereby authorized to decline to make any transfer of securities if such transfer would constitute
a violation or breach of this letter agreement.

 

The undersigned further
agrees that (i) it will not, during the Lock-Up Period, make any demand or request for or exercise any right with respect
to the registration under the Securities Act of 1933, as amended ( the “Securities Act”), of any shares of
Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable for Common Stock
or other Beneficially Owned Shares, and (ii) the Company may, with respect to any Common Stock or other Beneficially Owned
Shares or any securities convertible into or exercisable or exchangeable for Common Stock or other Beneficially Owned Shares owned
or held (of record or beneficially) by the undersigned, cause the transfer agent or other registrar to enter stop transfer instructions
and implement stop transfer procedures with respect to such securities during the Lock-Up Period (as the same may be extended
as described above).

 

The undersigned hereby
represents and warrants that the undersigned has full power and authority to enter into this letter agreement. All authority herein
conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the parent, successors, assigns,
heirs or personal Representative of the undersigned.

 

The undersigned understands
that, if (1) the Underwriting Agreement is not entered into on or prior to [September 30, 2016], (2) the Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery
of the Common Stock to be sold thereunder, (3) the Company submits or files and later withdraws the Registration Statement relating
to the Public Offering, or (4) the Representative, on the one hand, or the Company, on the other hand, informs the other, prior
to the execution of the Underwriting Agreement, that it has determined not to proceed with the Public Offering, the undersigned
shall be released immediately from all obligations under this letter agreement.

 

The undersigned, whether
or not participating in the Public Offering, understands that the Underwriters are entering into the Underwriting Agreement and
proceeding with the Public Offering in reliance upon this letter agreement.

 

[Signature Page Follows]

 

    	 	A-3	 

     

    

 

This letter agreement
shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws
principles thereof. Delivery of a signed copy of this letter agreement by facsimile or e-mail/.pdf transmission shall be effective
as delivery of the original hereof.

 

	 	Very truly yours,	 
	 	 	 
	 	FOR INDIVIDUALS:	 
	 	 	 
	 	 	 
	 	 	Name:	 
	 	 	 	 
	 	FOR ENTITIES:	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 

 

	 	Address:	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 	A-4	 

     

    

 

EXHIBIT B

 

FORM OF PRESS RELEASE

 

Protea Biosciences Group, Inc.

[Date]

 

Protea Biosciences Group, Inc. (the “Company”)
announced today that Laidlaw & Company (UK) Ltd., the sole book-running manager in the Company’s recent public sale
of _________ shares of common stock, is [waiving] [releasing] a lock-up restriction with respect to ____ shares of the Company’s
common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take
effect on ______________, 20__ , and the shares may be sold on or after such date.

 

This press release is not an offer for
sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may
not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities
Act of 1933, as amended.

 

    	 	B-1

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