KINGSWOOD CAPITAL MARKETS,
division of Benchmark Investments, Inc.,
as Representative of the Several Underwriters
COMSOVEREIGN HOLDING CORP.
UNDERWRITING AGREEMENT
New York, New York
January 21, 2021
Kingswood Capital Markets,
division of Benchmark Investments, Inc.
as Representative of the several Underwriters named on Schedule
1 attached hereto
17 Battery Place, Suite 625
New York, New York 10004
Ladies and Gentlemen:
The undersigned, ComSovereign
Holding Corp., a corporation formed under the laws of the State of Nevada (the “Company”), hereby confirms its
agreement (this “Agreement”) with Kingswood Capital Markets, division of Benchmark Investments, Inc. (hereinafter
referred to as “you” (including its correlatives) or the “Representative”), and with the other underwriters
named on Schedule 1 hereto for which the Representative is acting as representative (the Representative and such other
underwriters being collectively called the “Underwriters” or, individually, an “Underwriter”)
as follows:
1. Purchase
and Sale of Shares.
1.1 Firm Securities.
1.1.1. Nature
and Purchase of Firm Securities.
(i) On the basis of
the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to the several Underwriters, an aggregate of 3,855,422 shares (“Firm Shares”) of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”). For every one Firm Share issued and sold by
the Company, the Company shall issue and sell to the several Underwriters one warrant to purchase one share of Common Stock each
at an exercise price of $4.50 per share (approximately 108.4% of the public offering price per Firm Share in the Offering) (each,
a “Warrant” and collectively, the “Warrants”), or an aggregate of 3,855,422 Warrants to purchase
an aggregate of 3,855,422 shares of Common Stock (the “Firm Warrants” and together with the Firm Shares, the
“Firm Securities”). The Firm Shares and Firm Warrants shall be sold as a unit (a “Firm Unit”),
consisting of one Firm Share and one Firm Warrant.
(ii) The Underwriters,
severally and not jointly, agree to purchase from the Company the number of Firm Units set forth opposite their respective names
on Schedule 1 attached hereto and made a part hereof at a purchase price of $3.818 per Firm Unit (92% of the per Firm Unit
public offering price), and the purchase price of each Firm Unit shall be allocated as follows: (i) $4.14 per Firm Share and (ii)
$0.01 per Firm Warrant. The Firm Units are to be offered initially to the public at the offering price set forth on the cover page
of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2. Firm
Securities Payment and Delivery.
(i) Delivery and payment
for the Firm Securities shall be made at 10:00 a.m., Eastern time, on the second (2nd) Business Day following the effective
date (the “Effective Date”) of the Registration Statement (as defined in Section 2.1.1 below) (or the third
(3rd) Business Day following the Effective Date if the Registration Statement is declared effective after 4:01 p.m.,
Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Nelson Mullins
Riley & Scarborough LLP, 101 Constitution Avenue NW, Suite 900, Washington, DC 20001 (“Representative Counsel”),
or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative
and the Company. The hour and date of delivery and payment for the Firm Securities is called the “Closing Date.”
(ii) Payment for the
Firm Securities shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company
upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Securities (or
through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The Firm
Securities shall be registered in such name or names and in such authorized denominations as the Representative may request in
writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver the
Firm Securities except upon tender of payment by the Representative for all of the Firm Securities. The term “Business
Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized
or obligated by law to close in New York, New York.
1.2 Over-allotment
Option.
1.2.1. Option Securities.
For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Securities, the Company
hereby grants to the Underwriters an option to purchase up to 578,312 additional shares of Common Stock, representing fifteen percent
(15%) of the Firm Shares included in the Firm Units sold in the offering (the “Option Shares”) and/or up to
578,312 additional Warrants to purchase an additional 578,312 shares of Common Stock, representing fifteen percent (15%) of the
Firm Warrants included in the Firm Units sold in the offering (the “Option Warrants”), from the Company (the
“Over-allotment Option”). The purchase price to be paid per Option Share and Option Warrant shall be equal to
the portion of the purchase price per Firm Unit allotted to the Firm Shares and Firm Warrants, respectively. The Over-allotment
Option is, at the Underwriters’ sole discretion, for Option Shares and Option Warrants together, solely Option Shares, solely
Option Warrants, or any combination thereof (each, an “Option Security,” and, collectively, the “Option
Securities”). The Firm Securities and the Option Securities are collectively referred to as the “Securities.”
The Securities, the shares of Common Stock underlying the Firm Warrants and the shares of Common Stock underlying the Option Warrants
are referred to herein collectively as the “Public Securities.” The Firm Warrants and the Option Warrants, if
any, shall be issued pursuant to, and shall have the rights and privileges set forth in, a warrant agreement, dated on or before
the Closing Date, between the Company and ClearTrust, LLC, as warrant agent (the “Warrant Agreement”). The offering
and sale of the Public Securities is herein referred to as the “Offering.”
1.2.2. Exercise of
Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all
(at any time) or any part (from time to time) of the Option Shares and/or the Option Warrants, in any combination thereof, within
45 days after the Effective Date. The purchase price to be paid per Option Share shall be equal to the Firm Share purchase price.
The purchase price to be paid per Option Warrant shall be equal to the Firm Warrant purchase price. The Underwriters shall not
be under any obligation to purchase any Option Securities prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed
in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares and/or Option
Warrants to be purchased and the date and time for delivery of and payment for the Option Securities (the “Option Closing
Date”), which shall not be later than five (5) full Business Days after the date of the notice or such other time as
shall be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place (including
remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such
delivery and payment for the Option Securities does not occur on the Closing Date, the Option Closing Date will be as set forth
in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Securities, subject
to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of
Option Shares and/or Option Warrants specified in such notice and (ii) each of the Underwriters, acting severally and not jointly,
shall purchase that portion of the total number of Option Shares and Option Warrants then being purchased that the number of Firm
Units as set forth on Schedule 1 opposite the name of such Underwriter bears to the total number of Firm Units (except as
otherwise agreed to by the Underwriters).
1.2.3. Option Securities
Payment and Delivery. Payment for the Option Securities shall be made on the Option Closing Date by wire transfer in Federal
(same day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory
to the Underwriters) representing the Option Securities (or through the facilities of DTC) for the account of the Underwriters.
The Option Securities shall be registered in such name or names and in such authorized denominations as the Representative may
request in writing at least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to
sell or deliver the Option Securities except upon tender of payment by the Representative for applicable Option Securities.
1.3 Representative’s
Warrants.
1.3.1. Purchase Warrants.
The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date a warrant (“Representative’s
Warrant”) for the purchase of an aggregate of 154,216 shares of Common Stock, representing 4.0% of the Firm Shares, for
an aggregate purchase price of $100.00. The Representative’s Warrant agreement, in the form attached hereto as Exhibit A
(the “Representative’s Warrant Agreement”), shall be exercisable, in whole or in part, commencing on a
date which is six (6) months after the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial
exercise price per share of Common Stock of $5.1875, which is equal to 125.0% of the initial public offering price of the Firm
Shares. The Representative’s Warrant Agreement 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 Warrant and the
underlying shares of Common Stock during the one hundred eighty (180) day period after the Effective Date and by its acceptance
thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant, 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 such securities for a period of one hundred eighty (180) days following the Effective Date 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.
1.3.2. Delivery.
Delivery of the Representative’s Warrant Agreement shall be made on the Closing Date and 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 the Underwriters as of the Applicable Time (as defined below), as of the
Closing Date and as of the Option Closing Date, if any, as follows:
2.1 Filing of Registration
Statement.
2.1.1. Pursuant to
the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-248490), including any related prospectus
or prospectuses, for the registration of the Public Securities and the Representative’s Securities under the Securities Act
of 1933, as amended (the “Securities Act”), which registration statement and amendment or amendments have been
prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations
of the Commission under the Securities Act (the “Securities Act Regulations”) and will contain all material
statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except
as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration
statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements,
schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a
part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “Rule
430A Information”)), is referred to herein as the “Registration Statement.” If the Company files any
registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration
Statement” shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been
declared effective by the Commission on the date hereof.
Each prospectus used
prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used
after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary Prospectus.”
The Preliminary Prospectus, subject to completion, dated January 14, 2021, that was included in the Registration Statement immediately
prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final prospectus in the form
first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.” Any reference
to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus included
in the Registration Statement.
“Applicable
Time” means 7:00 p.m., Eastern time, on the date of this Agreement.
“Issuer Free
Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities
Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined
in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the
Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule
433(d)(5)(i) because it contains a description of the Public Securities or of the Offering that does not reflect the final terms,
in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g).
“Issuer General
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona Fide Electronic
Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer Limited
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
“Pricing Disclosure
Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing
Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant to
the Exchange Act. The Company has filed with the Commission a Form 8-A/A (File Number 001-39379) providing for the registration
pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the
Common Stock and Warrants. The registration of the shares of Common Stock and Warrants under the Exchange Act has been declared
effective by the Commission on or prior to the date hereof. The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the shares of Common Stock and Warrants under the Exchange Act, nor has the Company
received any notification that the Commission is contemplating terminating such registration.
2.2 Stock
Exchange Listing. The shares of Common Stock and Warrants have been approved for listing on The Nasdaq Capital Market (the
“Exchange”), subject only to official notice of issuance, and the Company has taken no action designed to, or
likely to have the effect of, delisting the shares of Common Stock and/or Warrants from the Exchange, nor has the Company received
any notification that the Exchange is contemplating terminating such listing except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus.
2.3 No Stop Orders,
etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any order preventing
or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the
Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with
each request (if any) from the Commission for additional information.
2.4 Disclosures
in Registration Statement.
2.4.1. Compliance
with Securities Act and 10b-5 Representation.
(i) Each of the
Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects
with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus
filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus,
at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and
the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering
and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant
to the Commission’s EDGAR filing system (“EDGAR”), except to the extent permitted by Regulation S-T promulgated
under the Securities Act (“Regulation S-T”).
(ii) Neither the Registration
Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any Option Closing
Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state
a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(iii) The Pricing Disclosure
Package, as of the Applicable Time, at the Closing Date and at any Option Closing Date (if any), did not, does not and will not
include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing Prospectus
hereto does not conflict in any material respect with the information contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented
by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made
or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the
Underwriters by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus or
any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of
any Underwriter consists solely of the following disclosure contained in the “Underwriting” section of the Prospectus:
(i) the table showing the number of securities to be purchased by each Underwriter, (ii) the fourth full paragraph, (iii) the second
and third sentences of the second paragraph under the heading “Discounts, Commissions and Reimbursement” and (iv) the
sub-sections titled “Discretionary Accounts,” “Electronic Offer, Sale and Distribution of Securities,”
“Stabilization” and “Passive Market Making” (the “Underwriters’ Information”).
(iv) Neither the Prospectus
nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with
the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include an
untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation
and warranty shall not apply to the Underwriters’ Information.
2.4.2. Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that
have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company
is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly
executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the
Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability
of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that
the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses
and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default
thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or
both, would constitute a default thereunder except for such defaults that would not reasonably be expected to result in a Material
Adverse Change (as defined in Section 2.5.1 below). To the best of the Company’s knowledge, performance by the Company of
the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental or regulatory agency, authority, body, entity or court, domestic or foreign,
having jurisdiction over the Company or any of its assets or businesses (each, a “Governmental Entity”), including,
without limitation, those relating to environmental laws and regulations.
2.4.3. Prior Securities
Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any
person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
2.4.4. Regulations.
The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal,
state, local and all foreign laws, rules and regulations relating to the Offering and the Company’s business as currently
conducted or contemplated are correct and complete in all material respects and no other such laws, rules or regulations are required
to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed.
2.4.5. No Other Distribution
of Offering Materials. The Company has not, directly or indirectly, distributed and will not distribute any offering material
in connection with the Offering other than any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus and other
materials, if any, permitted under the Securities Act and consistent with Section 3.2 below.
2.5 Changes After
Dates in Registration Statement.
2.5.1. No Material
Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change
in the financial position or results of operations of the Company or its Subsidiaries taken as a whole, nor to the Company’s
knowledge any change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective
material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects
of the Company or its Subsidiaries taken as a whole (a “Material Adverse Change”); (ii) there have been
no material transactions entered into by the Company or its Subsidiaries, other than as contemplated pursuant to this Agreement;
and (iii) no executive officer or director of the Company has resigned from any position with the Company.
2.5.2. Recent Securities
Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock.
2.6 Disclosures
in Commission Filings. None of the Company’s filings with, or other documents furnished to, the Commission contained
any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. Since January 1, 2020, the Company has made all filings
with the Commission required under the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the
“Exchange Act Regulations”).
2.7 Independent
Accountants. To the knowledge of the Company, Haskell & White LLP (the “Auditor”), whose report is filed
with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting
Oversight Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section
10A(g) of the Exchange Act.
2.8 Financial Statements,
etc. The financial statements, including the notes thereto and supporting schedules included in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, fairly present in all material respects the financial position and the results
of operations of the Company at the dates and for the periods stated therein; and such financial statements have been prepared
in conformity with U.S. generally accepted accounting principles (“GAAP”), consistently applied throughout the
periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected
to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules, if any, included
in the Registration Statement present fairly in all material respects the information required to be stated therein. Except as
included therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the
Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. The as adjusted financial
information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus
have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities
Act Regulations and present fairly in all material respects the information shown therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred
to therein. All disclosures contained in the Registration Statement, the Pricing 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 Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities
or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or
expenses. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) since the date
of the last balance sheet included in the Registration Statement, the Proxy Disclosure Package and the Prospectus, neither the
Company nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary”
and, collectively, the “Subsidiaries”), has incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid
any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the
capital stock of the Company or any of its Subsidiaries, or, other than in the ordinary course of business, any grants under any
stock compensation plan, and (d) there has not been any material adverse change in the Company’s long-term or short-term
debt. The Company represents that it has no direct or indirect subsidiaries other than those listed in Exhibit 21.1 to the Registration
Statement.
2.9 Authorized Capital;
Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the
adjusted capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing
Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option
Closing Date, there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued
shares of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the Company, or
any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.
2.10 Valid Issuance
of Securities, etc.
2.10.1. Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no contractual rights
of rescission or the ability to force the Company to repurchase such securities with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights, rights
of first refusal or rights of participation of any holders of any security of the Company or similar contractual rights granted
by the Company. The authorized shares of Common Stock conform in all material respects to all statements relating thereto contained
in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding shares
of Common Stock, options, warrants and other rights to purchase or exchange such securities for shares of the Common Stock were
at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky”
laws or, based in part on the representations and warranties of the purchasers of such shares of Common Stock, exempt from such
registration requirements. The description of the Company’s stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted thereunder, as described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, accurately and fairly present, in all material respects, the information required to be shown with respect
to such plans, arrangements, options and rights.
2.10.2. Securities
Sold Pursuant to this Agreement. The Public Securities and Representative’s Securities have been duly authorized for
issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are
not and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative’s
Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public
Securities and Representative’s Securities has been duly and validly taken. The Public Securities 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. All corporate action required to be taken for the authorization, issuance and sale
of the Warrants and the Representative’s Warrant has been duly and validly taken; the shares of Common Stock issuable upon
exercise of the Warrants and the Representative’s Warrant have been duly authorized and reserved for issuance by all necessary
corporate action on the part of the Company and when paid for and issued in accordance with the Warrants and Warrant Agreement
or the Representative’s Warrant Agreement, as applicable, such underlying shares of Common Stock will be validly issued,
fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such
holders; and such shares of Common Stock are not and will not be subject to the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the Company.
2.11 Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no holders of any securities of the Company or any options, warrants, rights or other securities exercisable for or convertible
or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company
under the Securities Act or to include any such securities in the Registration Statement or any other registration statement to
be filed by the Company.
2.12 Validity and
Binding Effect of Agreements. The execution, delivery and performance of this Agreement, the Warrants, the Warrant Agreement
and the Representative’s Warrant Agreement have been duly and validly authorized by the Company, and, when executed and delivered,
will constitute, the valid and binding agreements of the Company, enforceable against the Company in accordance with their respective
terms, except in each case: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision
may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
2.13 No Conflicts,
etc. The execution, delivery and performance by the Company of this Agreement, the Warrants, the Warrant Agreement and the
Representative’s Warrant Agreement and all ancillary documents, the consummation by the Company of the transactions herein
and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without
the giving of notice or the lapse of time or both: (i) result in a breach of, or conflict with, in any material respect any
of the terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or
imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or any other agreement or instrument to which the Company is a party or as to which any
property of the Company is a party; (ii) result in any violation of the provisions of the Company’s Articles of Incorporation
(as the same have been amended or restated from time to time, the “Charter”) or the bylaws of the Company (the
“Bylaws”); or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of
any Governmental Entity as of the date hereof.
2.14 No Defaults;
Violations. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no material
default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed
money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to
which any of the properties or assets of the Company is subject. The Company is not (i) in violation of any term or provision of
its Charter or Bylaws, or (ii) in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree
of any Governmental Entity, except for such violations that would not be reasonably expected to result in a Material Adverse Change.
2.15 Corporate Power;
Licenses; Consents.
2.15.1. Conduct of
Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
has all requisite corporate power and authority, and has all necessary consents, authorizations, approvals, licenses, certificates,
clearances, permits and orders and supplements and amendments thereto (collectively, “Authorizations”) of and
from all Governmental Entities that it needs as of the date hereof to conduct its business purpose as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, except for such Authorizations, the absence of which would not reasonably
be expected to have a Material Adverse Change.
2.15.2. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement, the Warrants, the Warrant
Agreement and the Representative’s Warrant Agreement and to carry out the provisions and conditions hereof and thereof, and
all Authorizations required in connection therewith have been obtained. No Authorization of, and no filing with, any Governmental
Entity, the Exchange or another body is required for the valid issuance, sale and delivery of the Public Securities and the Representative’s
Securities and the consummation of the transactions and agreements contemplated by this Agreement, the Warrants, the Warrant Agreement
and the Representative’s Warrant Agreement and as contemplated by the Registration Statement, the Pricing Disclosure Package
and the Prospectus, except with respect to applicable federal and state securities or blue-sky laws and the rules and regulations
of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.16 D&O Questionnaires.
To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”) completed
by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”) as
supplemented by all information concerning the Company’s directors and officers as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus provided to the Underwriters, is true and correct in all material respects and
the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become
materially inaccurate and incorrect.
2.17 Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, or in connection with the Company’s listing application for the listing of the Public Securities
on the Exchange, and is required to be disclosed therein.
2.18 Good Standing.
The Company has been duly incorporated and is validly existing as a corporation and is in good standing under the laws of the State
of Nevada as of the date hereof, and is duly qualified to do business and is in good standing as a foreign corporation in each
other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where
the failure to be so qualified or in good standing, singularly or in the aggregate, would not have or reasonably be expected to
result in a Material Adverse Change.
2.19 Insurance.
The Company carries or is entitled to the benefits of insurance (including, without limitation, as to directors and officers insurance
coverage), with reputable insurers, in such amounts and covering such risks which the Company believes are adequate, and all such
insurance is in full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary
or appropriate to conduct its business as now conducted and at a cost that would not reasonably be expected to result in a Material
Adverse Change.
2.20 Transactions
Affecting Disclosure to FINRA.
2.20.1. Finder’s
Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims,
payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee
by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements
or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.20.2. Payments Within
Twelve (12) Months. Except as disclosed in writing to the Representative or as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments in connection with the
Offering (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration
of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company;
(ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any
FINRA member, within the twelve (12) months prior to the Effective Date, other than the payment to the Underwriters as provided
hereunder in connection with the Offering.
2.20.3. Use of Proceeds.
None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except
as specifically authorized herein.
2.20.4. FINRA Affiliation.
There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, beneficial owner of 10% or more of any
class of the Company’s securities or (iii) to the Company’s knowledge, beneficial owner of the Company’s unregistered
equity securities who acquired any equity securities of the Company during the 180-day period immediately preceding the filing
of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined
in accordance with the rules and regulations of FINRA).
2.20.5. Information.
All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete
in all material respects.
2.21 Foreign Corrupt
Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries,
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any Governmental Entity (domestic or foreign) or any political party or candidate for office (domestic or foreign)
or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection
with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal
or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if
not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company has
taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977, as amended.
2.22 Compliance
with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”),
and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.23 Money Laundering
Laws. The operations of the Company and its Subsidiaries 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 applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively,
the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving
the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
2.24 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel on the Closing Date or the Option Closing Date shall be deemed a representation and warranty by the Company to the Underwriters
as to the matters covered thereby.
2.25 Lock-Up Agreements.
Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors and each owner of 5% or
more of the Company’s outstanding shares of Common Stock (or securities convertible or exercisable into shares of Common
Stock) (collectively, the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties to deliver
to the Representative an executed Lock-Up Agreement, in a form substantially similar to that attached hereto as Exhibit B
(the “Lock-Up Agreement”), prior to the execution of this Agreement.
2.26 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization
or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the
conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect on
the assets, business or operations of the Company taken as a whole. The Company’s ownership and control of each Subsidiary
is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.27 Related Party
Transactions. There are no business relationships or related party transactions involving the Company or any other person required
to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described as
required.
2.28 Board of Directors.
The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing Prospectus and the
Prospectus captioned “Management.” The qualifications of the persons serving as board members and the overall composition
of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated
thereunder (the “Sarbanes-Oxley Act”) applicable to the Company and the listing rules of the Exchange. At least
one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,”
as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons
serving on the Board of Directors qualify as “independent,” as defined under the listing rules of the Exchange.
2.29 Sarbanes-Oxley
Compliance.
2.29.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply in all material
respects with Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure
that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the
preparation of the Company’s Exchange Act filings and other public disclosure documents.
2.29.2. Compliance.
The Company is and at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley
Act applicable to it, and has implemented or will implement such programs and has taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions
of the Sarbanes-Oxley Act.
2.30 Accounting
Controls. The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as
defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply in all material respects with the requirements
of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited
to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses
in its internal controls. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been
advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial
reporting which are known to the Company’s management and that have adversely affected or are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud known to
the Company’s management, whether or not material, that involves management or other employees who have a significant role
in the Company’s internal controls over financial reporting.
2.31 No Investment
Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds thereof as
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register as
an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.32 No Labor Disputes.
No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent.
The Company is not aware that any key employee or significant group of employees of the Company plans to terminate employment with
the Company.
2.33 Intellectual
Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses,
inventions, trade secrets and similar rights (“Intellectual Property Rights”) described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus and necessary for the conduct of the business of the Company and each
of its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and
the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary for the conduct
of its business as currently carried on and as described in the Registration Statement and the Prospectus will involve or give
rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither the Company nor
any of its Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property
Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse
Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of
the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights,
and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in
the aggregate, together with any other claims in this Section 2.33, reasonably be expected to result in a Material Adverse Change;
(C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights
licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part,
and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.33, reasonably
be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property
Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate,
together with any other claims referred to in this Section 2.33, reasonably be expected to result in a Material Adverse Change;
and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect
of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of
such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed
with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To
the Company’s knowledge, all material technical information developed by and belonging to the Company which has not been
patented has been kept confidential. The Company is not a party to or bound by any options, licenses or agreements with respect
to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement,
the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure
Package and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence.
None of the technology employed by the Company has been obtained or is knowingly being used by the Company in violation of any
contractual obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or employees,
or otherwise in violation of the rights of any persons.
2.34 Taxes.
Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries
has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed
against the Company or such respective Subsidiary. The provisions for taxes payable, if any, shown on the financial statements
filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and
for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters,
(i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes
asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns
or collection of taxes have been given by or requested from the Company or its Subsidiaries. There are no tax liens against the
assets, properties or business of the Company or its Subsidiaries. The term “taxes” means all federal, state,
local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any
penalties, additions to tax or additional amounts with respect thereto. The term “returns” means all returns,
declarations, reports, statements and other documents required to be filed in respect to taxes.
2.35 ERISA Compliance.
The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974,
as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established
or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material respects
with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations described
in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company is a member. No “reportable event” (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained
by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company
or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded
benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably
expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee
benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established
or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which would cause
the loss of such qualification.
2.36 Compliance
with Laws. Each of the Company and each Subsidiary: (A) is and at all times has been in compliance with all statutes, rules,
or regulations applicable to the business of the Company as currently conducted (“Applicable Laws”), except
as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received
any warning letter, untitled letter or other correspondence or notice from any Governmental Entity alleging or asserting noncompliance
with any Applicable Laws or any Authorizations; (C) possesses all material Authorizations and such Authorizations are valid and
in full force and effect and are not in material violation of any term of any such Authorizations; (D) has not received notice
of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental
Entity or third party alleging that any activity conducted by the Company is in violation of any Applicable Laws or Authorizations
and has no knowledge that any such Governmental Entity or third party is considering any such claim, litigation, arbitration, action,
suit, investigation or proceeding; (E) has not received notice that any Governmental Entity has taken, is taking or intends to
take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Entity is considering
such action; and (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such
reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and
correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission).
2.37 Environmental
Laws. The Company is in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use,
treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment
which are applicable to their businesses (“Environmental Laws”), except where the failure to comply would not,
singularly or in the aggregate, result in a Material Adverse Change. There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances
by, due to, or caused by the Company (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company
is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company, or upon any other property,
in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law,
statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or in the aggregate with all such violations and liabilities,
a Material Adverse Change; and there has been no disposal, discharge, emission or other release of any kind onto such property
or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which
the Company has knowledge, except for any such disposal, discharge, emission, or other release of any kind which would not have,
singularly or in the aggregate with all such discharges and other releases, a Material Adverse Change. In the ordinary course
of business, the Company conducts periodic reviews of the effect of Environmental Laws on its business and assets, in the course
of which they identify and evaluate associated costs and liabilities (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental Laws or governmental permits issued thereunder, any
related constraints on operating activities and any potential liabilities to third parties). On the basis of such reviews,
the Company has reasonably concluded that such associated costs and liabilities would not have, singularly or in the aggregate,
a Material Adverse Change.
2.38 Title to Property.
Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company and its Subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal
property which are material to the business of the Company and its Subsidiaries taken as a whole, in each case free and clear of
all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the
value of such property and do not interfere with the use made and proposed to be made of such property by the Company or its Subsidiaries;
and all of the leases and subleases material to the business of the Company and its Subsidiaries, considered as one enterprise,
and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any notice of
any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or any Subsidiary to the continued
possession of the leased or subleased premises under any such lease or sublease.
2.39 Contracts Affecting
Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates
(as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including, but not limited
to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the
Company’s or its Subsidiaries’ liquidity or the availability of or requirements for their capital resources required
to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus which
have not been described or incorporated by reference as required.
2.40 Loans to Directors
or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course
of business) or guarantees or indebtedness by the Company or its Subsidiaries to or for the benefit of any of the officers or directors
of the Company, its Subsidiaries, or any of their respective family members, except as disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus.
2.41 Ineligible
Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the Effective Date
and at the time of any amendment thereto, at the earliest time thereafter that the Company or another offering participant made
a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities and at the
Effective Date, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account
of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible
issuer.
2.42 Smaller Reporting
Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting company,”
as defined in Rule 12b-2 of the Exchange Act Regulations.
2.43 Industry Data.
The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the
Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate
or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.44 Reverse Stock
Split. The Company has taken all necessary corporate action to effectuate a reverse stock split of its shares of Common Stock
on the basis of one (1) such share for each three (3) shares issued and outstanding shares thereof (the “Reverse Stock
Split”), such Reverse Stock Split to be effective no later than the first trading day of the Firm Shares following the
date hereof.
2.45 Electronic
Road Show. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of the
Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities
Act Regulations) is required in connection with the Offering.
2.46 Margin Securities.
The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal
Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the shares
of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve
Board.
2.47 Dividends and
Distributions. Except as disclosed in the Pricing Disclosure Package, Registration Statement and the Prospectus, no Subsidiary
of the Company is currently prohibited or restricted, directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary
from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary
of the Company.
2.48 Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without
a reasonable basis or has been disclosed other than in good faith.
2.49 Exchange Act
Reports. Except as disclosed in writing to the Representative, the Company has filed in a timely manner all reports required
to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the preceding 12 months (except to the extent
that Section 15(d) requires reports to be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall be governed
by the next clause of this sentence); and the Company has filed in a timely manner all reports required to be filed pursuant to
Sections 13(d) and 13(g) of the Exchange Act, except where the failure to timely file could not reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Change.
2.50 Integration.
Neither the Company nor any of its Subsidiaries, nor any person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering
to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of
any such securities under the Securities Act.
2.51 Confidentiality
and Non-Competitions. To the Company’s knowledge, no director, officer, key employee or consultant of the Company or
any Subsidiary is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with
any employer (other than the Company) or prior employer that could materially affect his or her ability to be and act in his or
her respective capacity of the Company or such Subsidiary or be expected to result in a Material Adverse Change.
2.52 Corporate Records.
The minute books of the Company have been made available to the Representative and Representative Counsel and such books (i) contain
minutes of all material meetings and actions of the Board of Directors (including each board committee) and stockholders of the
Company, and (ii) reflect all material transactions referred to in such minutes.
2.53 Diligence Materials.
The Company has provided to the Representative and Representative Counsel all materials required or necessary to respond in all
material respects to the diligence request submitted to the Company or Company Counsel by the Representative.
3. Covenants
of the Company. The Company covenants and agrees as follows:
3.1 Amendments to
Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to the
Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement
to which the Representative shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply in all material respects with the requirements of Rule 430A of the Securities
Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been
filed; (ii) of its receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment
or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification
of the Public Securities and Representative’s Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities
Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A
of the Securities Act in connection with the Offering of the Public Securities and Representative’s Securities. The Company
shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period
required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company shall use its best efforts to prevent the issuance of any stop
order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2. Continued Compliance.
The Company shall comply in all material respects with the Securities Act, the Securities Act Regulations, the Exchange Act and
the Exchange Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this
Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus
relating to the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule
172”), would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any
event shall occur or condition shall exist as a result of which it is necessary, in the opinion of Representative Counsel or Company
Counsel, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure
Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package
or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations,
the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as
may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or
the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the
Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement;
provided that the Company shall not file or use any such amendment or supplement to which the Representative or Representative
Counsel shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement
as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the
Exchange Act or the Exchange Act Regulations within two (2) Business Days prior to the Applicable Time. The Company shall give
the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date
and the exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative
with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will
not file or use any such document to which the Representative or Representative Counsel shall reasonably object.
3.2.3. Exchange Act
Registration. For a period of five (5) years after the date of this Agreement, (i) the Company shall use its reasonable best
efforts to maintain the registration of the shares of Common Stock and the Warrants under the Exchange Act, and (ii) the Company
shall not deregister any of the Common Stock or Warrants under the Exchange Act without the prior written consent of the Representative.
3.2.4. Free Writing
Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make
any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute
a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained
by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General Use Free
Writing Prospectus set forth in Schedule 2-B. The Company represents that it has treated or agrees that it will treat each
such free writing prospectus consented to, or deemed consented to, by the Representative as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto,
including timely filing with the Commission where required, legending and record keeping. 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 or 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 Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
3.3 Delivery to
the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available
to the Representative and Representative Counsel, without charge, signed copies of the Registration Statement as originally filed
and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to each Underwriter, without charge, a conformed copy of the Registration Statement as originally filed and
each amendment thereto (without exhibits) upon receipt of a written request therefor from such Underwriter. The copies of the Registration
Statement and each amendment 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.
3.4 Delivery to
the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each Underwriter,
without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by
Rule 172 of the Securities Act Regulations, would be) required to be delivered under the Securities Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or
supplements 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.
3.5 Effectiveness
and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement
to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative
promptly and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto;
(ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that
purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification
of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for
that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration
Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission;
and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company,
makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue
or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading,
or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend
such qualification at any time, the Company shall use its commercially reasonable efforts to obtain promptly the lifting of such
order.
3.6 Review of Financial
Statements. For a period of three (3) years after the date of this Agreement, the Company, at its expense, shall cause its
regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements
for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7 Listing.
The Company shall use its reasonable best efforts to maintain the listing of the shares of Common Stock (including the Firm Shares,
the Option Shares and the shares of Common Stock issuable upon exercise of the Warrants) and the Warrants on the Exchange for at
least three (3) years from the date of this Agreement.
3.8 Financial Public
Relations Firm. As of the Effective Date, the Company shall have retained a financial public relations firm reasonably acceptable
to the Representative and the Company, which shall initially be Redchip Companies Inc., which firm shall be experienced in assisting
issuers in initial 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 Effective Date.
3.9 Reports to the
Representative.
3.9.1. Periodic Reports,
etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available to the Representative
copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally
to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report the
Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every
press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii)
a copy of each Form 8-K prepared and filed by the Company; (iv) a copy of each registration statement filed by the Company under
the Securities Act; (v) a copy of each report or other communication furnished to stockholders and (vi) such additional documents
and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may
from time to time reasonably request. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have
been delivered to the Representative pursuant to this Section 3.9.1.
3.9.2. Transfer Agent;
Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer agent
and registrar acceptable to the Representative (the “Transfer Agent”) and shall furnish to the Representative
at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. ClearTrust, LLC is acceptable
to the Representative to act as Transfer Agent for the shares of Common Stock.
3.9.3 Warrant Agent.
For so long as the Warrants are outstanding, the Company shall retain a warrant agent for the Warrants reasonably acceptable to
the Representative (the “Warrant Agent”). ClearTrust, LLC is acceptable to the Representative to act as Warrant
Agent for the Warrants.
3.9.4. Trading Reports.
For a period of three (3) years after the date of this Agreement, during such time as the Public Securities are listed on the Exchange,
the Company shall provide to the Representative, at the Company’s expense, such reports published by the Exchange relating
to price trading of the Public Securities, as the Representative shall reasonably request.
3.10 Payment of
Expenses
3.10.1. General Expenses
Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any,
to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this
Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the shares
of Common Stock to be sold in the Offering (including the Option Shares) with the Commission; (b) all Public Offering System filing
fees associated with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Public Securities
on the Exchange and such other stock exchanges as the Company and the Representative together determine, including any fees charged
by DTC; (d) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors; (e)
all fees, expenses and disbursements relating to the registration, qualification or exemption of the Public Securities under the
securities laws of such states or foreign jurisdictions as the Representative may reasonably designate; (f) 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; (g) the costs and expenses of a public relations firm;
(h) the costs of preparing, printing and delivering certificates representing the Public Securities; (i) fees and expenses of the
transfer agent for the shares of Common Stock; (j) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities
from the Company to the Underwriters; (k) the costs associated with one set of bound volumes of the public offering materials as
well as commemorative mementos and lucite tombstones, each of which the Company or its designee shall provide within a reasonable
time after the Closing Date in such quantities as the Representative may reasonably request; (l) the fees and expenses of the Company’s
accountants; (m) the fees and expenses of the Company’s legal counsel and other agents and representatives; (n) the fees
and expenses of Representative Counsel; (o) the cost associated with the Underwriters’ use of Ipreo’s book-building,
prospectus tracking and compliance software for the Offering; and (p) the Underwriters’ actual accountable “road show”
expenses for the Offering. Notwithstanding the foregoing, the Company’s obligations to reimburse the Representative for any
out-of-pocket expenses actually incurred as set forth in the preceding sentence shall not exceed $175,000.00 in the aggregate,
including but not limited to the legal fees and road show expenses as described therein. The Representative may deduct from the
net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth
herein to be paid by the Company to the Underwriters, less the Advance (as such term is defined in Section 8.3 hereof).
3.10.2. Non-accountable
Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date
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 (1.0%) of the gross proceeds received by the Company from the sale of the Public Securities, provided,
however, that in the event the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3
hereof.
3.11 Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
3.12 Delivery of
Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an
earnings statement (which need not be certified by an independent registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or stockholders has taken or shall take, directly or
indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation
M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Public Securities.
3.14 Internal Controls.
The Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions
are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary
in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect
to any differences.
3.15 Accountants.
As of the date of this Agreement, the Company has retained an independent registered public accounting firm, as required by the
Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board, reasonably acceptable to the
Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm
for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor is
acceptable to the Representative.
3.16 FINRA.
For a period of 60 days from the later of the Closing Date or the Option Closing Date, the Company shall advise the Representative
(who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii)
any beneficial owner of 10% or more of any class of the Company’s securities or (iii) any beneficial owner of the Company’s
unregistered equity securities which were acquired during the 180 days immediately preceding the filing of the Registration Statement
is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with
the rules and regulations of FINRA).
3.17 No Fiduciary
Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual
in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary
capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the
other transactions contemplated by this Agreement.
3.18 Company Lock-Up
Agreements.
3.18.1. Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, for a period of 90 days after the date of this Agreement (the “Lock-Up Period”),
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company;
provided, however, that this clause (i) shall not apply to the issuance of any shares of capital stock, options or warrants in
connection with any acquisition of a business that the Company currently has agreed to purchase or with which the Company is currently
in discussions to purchase; (ii) file or cause to be filed any registration statement with the Commission relating to the offering
of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit
or senior credit facility with a traditional bank or other lending institution, or (iv) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company,
whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital
stock of the Company or such other securities, in cash or otherwise.
The restrictions contained
in this Section 3.18.1 shall not apply to (i) the shares of Common Stock to be sold hereunder (including shares of Common Stock
issuable upon the exercise of the Warrants and the Representative’s Warrant), (ii) the issuance by the Company of shares
of Common Stock upon the exercise of an outstanding stock option or warrant or the conversion of a security outstanding on the
date hereof, of which the Representative has been advised in writing, (iii) the issuance by the Company of any security under any
equity compensation plan of the Company or (iv) any issuance of securities disclosed in the Registration Statement, the Pricing
Disclosure Package or the Prospectus; provided that, prior to the issuance of any such stock options or shares of capital stock
of the Company that are vested or vest during the Lock-Up Period, each recipient thereof shall sign and deliver a Lock-Up Agreement.
3.19 Release of
D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth
in the Lock-Up Agreements described in Section 2.25 hereof for an officer or director of the Company and provides the Company with
notice of the impending release or waiver at least three (3) 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 C
hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20 Blue Sky Qualifications.
The Company shall use its commercially reasonable efforts, in cooperation with the Underwriters, if necessary, to qualify the Public
Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign)
as the Representative may designate and to maintain such qualifications in effect so long as required to complete the distribution
of the Public Securities; provided, however, that the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
3.21 Reporting Requirements.
The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule
172, would be) required to be delivered under the Securities Act, will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally, the
Company shall report the use of proceeds from the issuance of the Public Securities as may be required under Rule 463 under the
Securities Act Regulations.
3.22 Press Releases.
Prior to the Closing Date and any Option Closing Date, the Company shall not issue any press release or other communication directly
or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, business
affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent
with the past practices of the Company and of which the Representative is notified), without the prior written consent of the Representative,
which consent shall not be unreasonably withheld, 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.
3.23 Sarbanes-Oxley.
The Company shall at all times comply in all material respects with all applicable provisions of the Sarbanes-Oxley Act in effect
from time to time.
3.24 IRS Forms.
If requested by the Representative, the Company shall deliver to each Underwriter (or its agent), prior to or at the Closing Date,
a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 or an IRS Form W-8, as appropriate,
together with all required attachments to such form.
3.25 Corporation
Records Service. As of the date hereof and for a period of three (3) years from the Closing Date, the Company shall have registered
and shall continue to maintain its registration with the Corporation Records Service (including annual report information) published
by the Standard & Poor’s Corporation.
3.26 “Key
Man” Life Insurance. The Company shall procure and shall during the 12-month period following the Effective Date continue
to maintain “key man” life insurance (in reasonable amounts agreed to by the Representative and with the Company as
the sole beneficiary thereof) with an insurer rated at least AA or better in the most recent edition of “Best’s Life
Reports” on the life of the Chief Executive Officer of the Company.
4. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided herein, shall be
subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each
of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant
to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:
4.1 Regulatory Matters.
4.1.1. Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:30 p.m.,
Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by the Representative,
and, at each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereto shall have been issued under the Securities Act, no order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus shall have been issued and no proceedings for any of those purposes shall have
been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied with
each request (if any) from the Commission for additional information. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in the manner and within the time frame required by Rule 424(b) under the Securities Act Regulations
(without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared
effective by, the Commission in accordance with the requirements of Rule 430A under the Securities Act Regulations.
4.1.2. FINRA Clearance.
On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange Clearance.
On the Closing Date, the Company’s shares of Common Stock (including the Firm Shares and the shares of Common Stock underlying
the Firm Warrants) and the Firm Warrants shall have been approved for listing on the Exchange, subject only to official notice
of issuance. On the first Option Closing Date (if any), the Company’s shares of Common Stock (including the Option Shares
and the shares of Common Stock underlying the Option Warrants) and the Option Warrants shall have been approved for listing on
the Exchange, subject only to official notice of issuance..
4.2 Company Counsel
Matters.
4.2.1. Closing Date
Opinion of Counsel. On the Closing Date, the Representative shall have received (i) the favorable opinion and written statement
providing certain “10b-5” negative assurances of Pryor Cashman LLP (“Company Counsel”), counsel
to the Company, dated the Closing Date and addressed to the Representative, in form and substance reasonably satisfactory to the
Representative, and (ii) the favorable opinion of Flangas Law Group, special Nevada counsel to the Company, dated the Closing Date
and addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
4.2.2. Option Closing
Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable opinions
of counsel listed in Section 4.2.1, dated the Option Closing Date, addressed to the Representative and in form and substance reasonably
satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsels in their respective
opinions delivered on the Closing Date.
4.3 Comfort Letters.
4.3.1. Cold Comfort
Letter. At the time this Agreement is executed the Representative shall have received a cold comfort letter from the Auditor
containing statements and information of the type customarily included in accountants’ comfort letters with respect to the
financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to the Representative
and to Representative Counsel from the Auditor, dated as of the date of this Agreement.
4.3.2. Bring-down
Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from
the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms
the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date
not more than three (3) Business Days prior to the Closing Date or the Option Closing Date, as applicable.
4.4 Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing
Date (if such date is other than the Closing Date), of its Chief Executive Officer or President, and its Chief Financial Officer
stating on behalf of the Company and not in an individual capacity that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration
Statement and each amendment thereto after the Effective Date, as of the Applicable Time and as of the Closing Date (or any Option
Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing
Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date
and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment
or supplement thereto after the Effective Date, as of the respective date thereof and as of the Closing Date, did not include any
untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, (ii) since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing
Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company
in this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the
Closing Date), and (iv) there has not been, subsequent to the date of the most recent audited financial statements included in
the Pricing Disclosure Package, a Material Adverse Change.
4.4.2. Secretary’s
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Closing Date, as the case may be, respectively,
certifying on behalf of the Company and not in an individual capacity: (i) that each of the Charter and Bylaws is true and
complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of
Directors relating to the Offering are in full force and effect and have not been modified; and (iii) as to the incumbency of the
officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5 No Material
Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no Material
Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any
Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding may reasonably be expected to cause a Material Adverse Change, except as set forth in the Registration Statement,
the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and
no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the
Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which
are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in
all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration
Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
4.6 No Material
Misstatement or Omission. The Underwriters shall not have discovered and disclosed to the Company on or prior to the Closing
Date and any Option Closing Date that the Registration Statement or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of Representative Counsel, is material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or that the Registration Statement, the Pricing Disclosure Package, any Issuer Free
Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue statement of fact which, in the
opinion of Representative Counsel, is material or omits to state any fact which, in the opinion of Representative Counsel, is material
and is necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading.
4.7 Corporate Proceedings.
All corporate proceedings and other legal matters incident to the authorization, form and validity of each of this Agreement, the
Representative’s Warrant Agreement, the Public Securities, the Registration Statement, the Pricing Disclosure Package, each
Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal matters relating to this Agreement, the Representative’s
Warrant Agreement and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects
to Representative Counsel, and the Company shall have furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
4.8 Delivery of
Agreements.
4.8.1. Lock-Up Agreements.
On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the Lock-Up
Agreements from each of the persons listed in Schedule 3 hereto.
4.8.2 Warrant Agreement.
On or before the Closing Date, the Company shall have delivered to the Representative executed copies of the Warrant Agreement.
4.8.3. Representative’s
Warrant Agreement. On the Closing Date, the Company shall have delivered to the Representative an executed copy of the Representative’s
Warrant Agreement.
4.9 Additional Documents.
At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with such documents
and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the Underwriters,
or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities and
the Representative’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative
and Representative Counsel.
4.10 Reverse
Stock Split. Not later than the first trading day of the Firm Shares following the date hereof, the Reverse Stock Split shall
be effective.
5. Indemnification.
5.1 Indemnification
of the Underwriters.
5.1.1. General.
The Company shall indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective directors,
officers, members, employees, representatives, partners, shareholders, affiliates, counsel and agents and each person, if any,
who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively
the “Underwriter Indemnified Parties,” and each an “Underwriter Indemnified Party”), against
any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses
reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever,
whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter
Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act,
the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement, the Pricing
Disclosure Package, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus (as from time to time each
may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company
in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors
by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this
Section 5, collectively called “application”) executed by the Company or based upon written information furnished
by the Company in any jurisdiction in order to qualify the Public Securities and Representative’s Securities under the securities
laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities
exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, the Underwriters’ Information. With respect to any untrue statement or
omission or alleged untrue statement or omission made in the Pricing Disclosure Package, the indemnity agreement contained in this
Section 5.1.1 shall not inure to the benefit of any Underwriter Indemnified Party to the extent that any loss, liability, claim,
damage or expense of such Underwriter Indemnified Party results from the fact that a copy of the Prospectus was not given or sent
to the person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Public
Securities to such person as required by the Securities Act and the Securities Act Regulations, and if the untrue statement or
omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by
the Company with its obligations under Section 3.3 hereof.
5.1.2. Procedure.
If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of
such action and the Company shall be entitled to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense of such action, including the employment and fees of counsel (subject
to the reasonable approval of such Underwriter Indemnified Party) and payment of actual expenses. Such Underwriter Indemnified
Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of such Underwriter Indemnified Party unless (i) the employment of such counsel at the expense of the Company
shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not
have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have been
advised by its counsel that there may be defenses available to it or them which are different from or additional to those available
to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected
by the Underwriter Indemnified Parties who are party to such action (in addition to local counsel) shall be borne by the Company.
Notwithstanding anything to the contrary contained herein, if any Underwriter Indemnified Party shall assume the defense of such
action as provided above, the Company shall have the right to approve the terms of any settlement of such action, which approval
shall not be unreasonably withheld.
5.2 Indemnification
of the Company. Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the
foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to such losses, liabilities,
claims, damages and expenses (or actions in respect thereof) which arise out of or are based upon untrue statements or omissions
made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or
supplement thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information.
In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus,
the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application,
and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given
to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative of the commencement of any litigation
or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the
Public Securities or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Issuer
Free Writing Prospectus.
5.3 Contribution.
5.3.1. Contribution
Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand,
and each of the Underwriters, on the other hand, from the Offering, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the
statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, 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, with respect to such Offering shall be deemed to be in the same proportion as the total proceeds from the Offering purchased
under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discount and commissions
received by the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus.
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, on the one hand, or the Underwriters, on the other, the intent of
the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement, omission,
act or failure to act; provided that the parties hereto agree that the written information furnished to the Company through the
Representative by or on behalf of any Underwriter for use in any Preliminary Prospectus, any Registration Statement or the Prospectus,
or in any amendment or supplement thereto, consists solely of the Underwriters’ Information. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss, claim, damage, expense, liability, action, investigation
or proceeding referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal
or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing to defend or defending
against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage,
expense, liability, action, investigation or proceeding. Notwithstanding the provisions of this Section 5.3.1 no Underwriter shall
be required to contribute any amount in excess of the total discount and commission received by such Underwriter in connection
with the Offering less the amount of any damages which such Underwriter has otherwise paid or becomes liable to pay by reason of
any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or failure to act or alleged failure to
act. 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.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify
the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be
liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party
seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section
5.3.2 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange
Act or otherwise available. The Underwriters’ obligations to contribute as provided in this Section 5.3 are several and in
proportion to their respective underwriting obligation, and not joint.
6. Default
by an Underwriter.
6.1 Default Not
Exceeding 10% of Firm Securities or Option Securities. If any Underwriter or Underwriters shall default in its or their obligations
to purchase the Firm Securities or the Option Securities, if the Over-allotment Option is exercised hereunder, and if the number
of the Firm Securities or Option Securities with respect to which such default relates does not exceed in the aggregate 10% of
the number of Firm Securities or Option Securities that all Underwriters have agreed to purchase hereunder, then such Firm Securities
or Option Securities to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their
respective commitments hereunder.
6.2 Default Exceeding
10% of Firm Securities or Option Securities. In the event that the default addressed in Section 6.1 relates to more than 10%
of the Firm Securities or Option Securities, the Representative may in its discretion arrange for itself or for another party or
parties to purchase such Firm Securities or Option Securities to which such default relates on the terms contained herein. If,
within one (1) Business Day after such default relating to more than 10% of the Firm Securities or Option Securities, the Representative
does not arrange for the purchase of such Firm Securities or Option Securities, then the Company shall be entitled to a further
period of one (1) Business Day within which to procure another party or parties satisfactory to the Representative to purchase
said Firm Securities or Option Securities on such terms. In the event that neither the Representative nor the Company arrange for
the purchase of the Firm Securities or Option Securities to which a default relates as provided in this Section 6, this Agreement
will automatically be terminated by the Representative or the Company without liability on the part of the Company (except as provided
in Sections 3.10 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however, that if
such default occurs with respect to the Option Securities, this Agreement will not terminate as to the Firm Securities; and provided,
further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to
the Company for damages occasioned by its default hereunder.
6.3 Postponement
of Closing Date. In the event that the Firm Securities or Option Securities to which the default relates are to be purchased
by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have
the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5)
Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure
Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to
the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of Representative Counsel may
thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such Firm Securities
or Option Securities.
7. Additional
Covenants.
7.1 Board Composition
and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members of the
Board of Directors and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act, the Exchange Act and
the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company seeks
to have its Public Securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable,
at least one member of the Audit Committee of the Board of Directors qualifies as an “audit committee financial expert,”
as such term is defined under Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without
the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st)
Business Day following the fortieth (40th) day after the Closing Date, other than normal and customary releases issued
in the ordinary course of the Company’s business.
8. Effective
Date of this Agreement and Termination Thereof.
8.1 Effective Date.
This Agreement shall become effective when both the Company and the Representative have executed the same and delivered counterparts
of such signatures to the other party.
8.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic
or international event or act or occurrence has materially disrupted, or in the Representative’s opinion will in the immediate
future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange
or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or
any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war
or an increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority;
or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States
securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion,
make it inadvisable to proceed with the delivery of the Firm Securities or Option Securities; or (vii) if the Company is in
material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have
become aware after the date hereof of a Material Adverse Change, or an adverse material change in general market conditions as
in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Public
Securities or to enforce contracts made by the Underwriters for the sale of the Public Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein
or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the reasonable
fees and disbursements of Representative Counsel not to exceed $50,000) up to $50,000, inclusive of the $50,000 advance for accountable
expenses previously paid by the Company to the Representative (the “Advance”) and upon demand the Company shall
pay the full amount thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no
way limits or impairs the indemnification and contribution provisions of this Agreement.
Notwithstanding the foregoing, any advance
received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule
5110(g)(4)(A).
8.4 Survival of
Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination
of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full
force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this
Agreement or any part hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9. Miscellaneous.
9.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be
deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
Kingswood Capital Markets
17 Battery Place, Suite 625
New York, New York 10004
Attn: Joseph T. Rallo
with a copy (which shall not constitute notice) to:
Nelson Mullins Riley & Scarborough LLP
101 Constitution Avenue NW, Suite 900
Washington, DC 20001
Attn: Andrew M. Tucker, Esq.
Fax No.: (202) 689-2860
If to the Company:
ComSovereign Holding Corp.
5000 Quorum Drive, Suite 400
Dallas, TX 75254
Attn: Daniel L. Hodges
Email: dhodges@comsovereign.com
with a copy (which shall not constitute notice) to:
Pryor Cashman LLP
7 Times Square
New York, NY 10036
Attn: Eric M. Hellige, Esq.
Email: ehellige@pryorcashman.com
Fax No.: (212) 326-0806
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
9.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4 Entire Agreement.
This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this Agreement)
constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.5 Binding Effect.
This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the Company
and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors, legal representatives,
heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns”
shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.6 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that
any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced
in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to
such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal
and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating
to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
9.7 Execution in
Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and
shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the
other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute
valid and sufficient delivery thereof.
9.8 Waiver, etc.
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]
If the foregoing correctly
sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
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Very truly yours,
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COMSOVEREIGN HOLDING CORP.
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By:
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/s/ Daniel L. Hodges
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Name:
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Daniel L. Hodges
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Title:
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Chief Executive Officer
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Confirmed as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on Schedule 1 hereto:
KINGSWOOD CAPITAL MARKETS,
division of Benchmark Investments, Inc.
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By:
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/s/ Sam Fleishman
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Name:
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Sam Fleishman
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Title:
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Supervisory Principal
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[Signature Page]
ComSovereign
Holding Corp. – Underwriting Agreement
SCHEDULE 1
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Total Number of
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Number of Option
Securities to be
Purchased if the Over-
Allotment Option is
Fully Exercised
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Underwriter
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Firm Units
to be Purchased
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Number of
Option
Shares
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Number of
Option
Warrants
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Kingswood Capital Markets, division of Benchmark Investments, Inc.
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2,915,663
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437,349
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437,349
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Dawson James Securities Inc.
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939,759
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140,963
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140,963
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TOTAL
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3,855,422
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578,312
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578,312
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SCHEDULE 2-A
Pricing Information
Number of Firm Units: 3,855,422
Number of Option Shares: 578,312
Number of Option Warrants: 578,312
Public Offering Price per Firm Unit: $4.15
Public Offering Price per Option Share: $4.14
Public Offering Price per Option Warrant: $0.01
Underwriting Discount per Firm Unit: $0.332
Underwriting Discount per Option Share: $0.3312
Underwriting Discount per Option Warrant: $0.0008
Proceeds to Company per Firm Unit (before expenses): $3.818
Proceeds to Company per Option Share (before expenses): $3.8088
Proceeds to Company per Option Warrant (before expenses): $0.0092
Underwriting Non-accountable expense allowance per Firm Unit:
$0.0415
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
None.
SCHEDULE 3
List of Lock-Up Parties
EXHIBIT A
Form of Representative’s Warrant
Agreement
THE REGISTERED HOLDER
OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT
AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR
HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
OTHER THAN (I) KINGSWOOD CAPITAL MARKETS, DIVISION OF BENCHMARK INVESTMENTS, INC. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION
WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF KINGSWOOD CAPITAL MARKETS, DIVISION OF BENCHMARK INVESTMENTS, INC.
OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT
IS NOT EXERCISABLE PRIOR TO JULY 21, 2021. VOID AFTER 5:00 P.M., EASTERN TIME, JANUARY 21, 2026.
COMMON STOCK PURCHASE WARRANT
For the Purchase of 154,216 Shares of Common
Stock
of
COMSOVEREIGN HOLDING CORP.
1. Purchase Warrant. THIS CERTIFIES
THAT, in consideration of funds duly paid by or on behalf of Kingswood Capital Markets, division of Benchmark Investments, Inc.
(“Holder”), as registered owner of this Purchase Warrant, ComSovereign Holding Corp., a Nevada corporation (the
“Company”), Holder is entitled, at any time or from time to time from July 21, 2021 (the “Commencement
Date”), and at or before 5:00 p.m., Eastern time, January 21, 2026 (the ”Expiration Date”),
but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 154,216 shares of common stock of the Company,
par value $0.0001 per share (the “Shares”), subject to adjustment as provided in Section 6 hereof. If the Expiration
Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the
next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date,
the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable
at $5.1875 per Share; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof,
the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon
such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise
price or the adjusted exercise price, depending on the context. The term “Effective Date” shall mean January
21, 2021, the date on which the Registration Statement on Form S-1 (File No. 333-248490) of the Company was declared effective
by the Securities and Exchange Commission.
2. Exercise.
2.1 Exercise Form.
In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in
cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official
bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration
Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease
and expire.
2.2 Cashless Exercise.
If at any time after the Commencement Date there is no effective registration statement registering, or no current prospectus available
for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment of cash or check payable
to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value
of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together
with the exercise form attached hereto, in which event the Company shall issue to Holder, Shares in accordance with the following
formula:
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Where,
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X
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=
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The number of Shares to be issued to Holder;
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Y
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=
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The number of Shares for which the Purchase Warrant is being exercised;
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A
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=
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The fair market value of one Share; and
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B
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=
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The Exercise Price.
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For purposes of this
Section 2.2, the fair market value of a Share is defined as follows:
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(i)
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if the Company’s common stock is traded on a securities
exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being submitted in connection
with the exercise of the Purchase Warrant; or
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(ii)
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if the Company’s common stock is actively traded
over-the-counter, the value shall be deemed to be the closing bid price prior to the exercise form being submitted in connection
with the exercise of the Purchase Warrant; if there is no active public market, the value shall be the fair market value thereof,
as determined in good faith by the Company’s Board of Directors.
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2.3 Legend.
Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities
have been registered under the Securities Act of 1933, as amended (the “Securities Act”):
“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE LAW. NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT AND APPLICABLE STATE LAW WHICH, IN THE OPINION OF COUNSEL TO THE COMPANY, IS AVAILABLE.”
3. Transfer.
3.1 General Restrictions.
The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder will not: (a) sell,
transfer, assign, pledge or hypothecate this Purchase Warrant for a period of one hundred eighty (180) days following the Effective
Date to anyone other than: (i) Kingswood Capital Markets, division of Benchmark Investments, Inc. (“Kingswood”)
or an underwriter or a selected dealer participating in the Offering, or (ii) a bona fide officer or partner of Kingswood or of
any such underwriter or selected dealer, in each case in accordance with FINRA Conduct Rule 5110(e)(1), or (b) for a period of
one hundred eighty (180) days following the Effective Date, cause this Purchase Warrant or the securities issuable hereunder to
be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition
of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(e)(2). On and after 180 days after
the Effective Date, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In
order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed
and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith. The
Company shall within five (5) business days transfer this Purchase Warrant on the books of the Company and shall execute and deliver
a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase
the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.
3.2 Restrictions
Imposed by the Securities Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until:
(i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption
from registration under the Securities Act and applicable state securities laws, the availability of which is established to the
reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Pryor Cashman LLP shall be deemed satisfactory
evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration
Statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities
and Exchange Commission (the “Commission”) and compliance with applicable state securities law has been
established.
4 Registration Rights.
4.1 Demand Registration.
4.1.1 Grant of Right.
The Company, upon written demand (a “Demand Notice”) of the Holders of at least 51% of the Purchase Warrants
and/or the underlying Shares, agrees to register, on one occasion, all or any portion of the Shares underlying the Purchase Warrants
(collectively, the “Registrable Securities”). On such occasion, the Company will file a registration statement
with the Commission covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable
best efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the
Commission; provided, however, that the Company shall not be required to comply with a Demand Notice if the Company
has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section
4.2 hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement or (ii)
if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered
by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. The demand for
registration may be made at any time during a period of three (3) years beginning on the Commencement Date. The Company covenants
and agrees to give written notice of its receipt of any Demand Notice by any Holders to all other registered Holders of the Purchase
Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.
4.1.2 Terms. The
Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts
to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such
states as are reasonably requested by the Holders; provided, however, that in no event shall the Company be required
to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register
or license to do business in such State or submit to general service of process in such State, or (ii) the principal stockholders
of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration
statement filed pursuant to the demand right granted under Section 4.1.1 to remain effective for a period of at least twelve (12)
consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first
given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell
the shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if
the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding
the provisions of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one
(1) occasion and such demand registration right shall terminate on the fifth anniversary of the Effective Date in accordance with
FINRA Rule 5110(g)(8)(C).
4.2 “Piggy-Back”
Registration.
4.2.1 Grant of Right.
In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right, for a period
of no more than seven (7) years from the Effective Date in accordance with FINRA Rule 5110(g)(8)(D), to include the Registrable
Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated
by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or Form S-4 or any equivalent form); provided,
however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the
managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares of Common Stock
which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion
hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the
Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by
such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration
Statement or are not entitled to pro rata inclusion with the Registrable Securities.
4.2.2 Terms. The
Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.2.1 hereof,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company
shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days’ written notice
prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for
each registration statement filed by the Company until such time as all of the Registrable Securities have been sold by the Holder.
The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written
notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except
as otherwise provided in this Purchase Warrant, there shall be no limit on the number of times the Holder may request registration
under this Section 4.2.2; provided, however, that such registration rights shall terminate on the sixth anniversary
of the Commencement Date.
4.3 General Terms.
4.3.1 Indemnification.
The Company shall indemnify the Holders of the Registrable Securities to be sold pursuant to any registration statement hereunder
and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise,
arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which
the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between the Underwriters
and the Company, dated as of January 21, 2021. The Holders of the Registrable Securities to be sold pursuant to such registration
statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim,
damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act
or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for
specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section
5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
4.3.2 Exercise of
Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holders to exercise their
Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
4.3.3 Documents Delivered
to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter
of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the
Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort”
letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering,
a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting
firm which has issued a report on the Company’s financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and,
in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten
public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting
the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between
the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff
with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance
notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties
and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent
and at such reasonable times as any such Holder shall reasonably request.
4.3.4 Underwriting
Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall be reasonably
satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder
and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other
terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to
any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that
any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be
made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended methods
of distribution.
4.3.5 Documents to
be Delivered by Holders. Each of the Holders participating in any of the foregoing offerings shall furnish to the Company a
completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
4.3.6 Damages.
Should the registration or the effectiveness thereof required by Sections 4.1 and 4.2 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, the Holders shall, in addition to any other legal or other relief available to
the Holders, be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened
breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the
necessity of posting bond or other security.
5. New Purchase Warrants to be
Issued.
5.1 Partial Exercise
or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or
in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation,
together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax
if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase
Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number
of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.
5.2 Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver
a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
6. Adjustments.
6.1 Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall
be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Share Dividends;
Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares
is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day
thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares, and
the Exercise Price shall be proportionately decreased.
6.1.2 Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares
is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date
thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and
the Exercise Price shall be proportionately increased.
6.1.3 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than
a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share
reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or
share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification
or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the
property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder
of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant)
to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization,
share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder
of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if
any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant
to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications,
reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.
6.1.4 Changes in Form
of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1,
and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in
the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase
Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the
Commencement Date or the computation thereof.
6.2 Substitute Purchase
Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into,
another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification
or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall
execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding
or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise
of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation
or share reconstruction or amalgamation, by a holder of the number of Shares for which such Purchase Warrant might have been exercised
immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant
shall provide for adjustments which shall be identical to the adjustments provided for in this Section 6. The above provision of
this Section shall similarly apply to successive consolidations or share reconstructions or amalgamations.
6.3 Elimination
of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the
exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may
be, to the nearest whole number of Shares or other securities, properties or rights.
7. Reservation and Listing. The
Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise
of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor,
in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued,
fully paid and non-assessable and not subject to preemptive rights of any stockholder. The Company further covenants and agrees
that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable
upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any
stockholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to
cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national
securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued
to the public in the Offering may then be listed and/or quoted.
8. Certain Notice Requirements.
8.1 Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to
receive notice as a stockholder for the election of directors or any other matter, or as having any rights whatsoever as a stockholder
of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event
at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of
the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder
a copy of each notice given to the other stockholders of the Company at the same time and in the same manner that such notice is
given to the stockholders.
8.2 Events Requiring
Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events:
(i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings,
as indicated by the accounting treatment of such dividend or distribution on the books of the Company; (ii) the Company shall offer
to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable
for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or (iii) a dissolution, liquidation
or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale
of all or substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change
in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section
6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe
the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s
Chief Financial Officer.
8.4 Transmittal
of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall
be deemed to have been duly made when hand delivered or mailed by express mail or private courier service: (i) if to the registered
Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company,
to following address or to such other address as the Company may designate by notice to the Holders:
If to the Holder:
Kingswood Capital Markets
17 Battery Place, Suite 625
New York, New York 10004
Attn: Joseph T. Rallo
with a copy (which shall not constitute notice) to:
Nelson Mullins Riley & Scarborough LLP
101 Constitution Avenue NW, Suite 900
Washington, DC 20001
Attn: Andrew M. Tucker, Esq.
Fax No.: (202) 689-2860
If to the Company:
ComSovereign Holding Corp.
5000 Quorum Drive, Suite 400
Dallas, TX 75254
Attn: Daniel L. Hodges
Email: dhodges@comsovereign.com
with a copy (which shall not constitute notice) to:
Pryor Cashman LLP
7 Times Square
New York, NY 10036
Attn: Eric M. Hellige, Esq.
Email: ehellige@pryorcashman.com
Fax No.: (212) 326-0806
9. Miscellaneous.
9.1 Amendments.
The Company and Kingswood may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders
in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with
any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company
and Kingswood may deem necessary or desirable and that the Company and Kingswood deem shall not adversely affect the interest of
the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom
enforcement of the modification or amendment is sought.
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase Warrant.
9.3 Entire Agreement.
This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this
Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes
all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.4 Binding Effect.
This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted
assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein
contained.
9.5 Governing Law;
Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought
and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served
upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall
be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing
party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees
and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby
irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.
9.6 Waiver, etc.
The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision
hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver
of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant 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.
9.7 Execution in
Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.
9.8 Exchange Agreement.
As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to
the complete exercise of this Purchase Warrant by Holder, if the Company and Kingswood enter into an agreement (“Exchange
Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash
or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused
this Purchase Warrant to be signed by its duly authorized officer as of the ____ day of _______, 2021.
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COMSOVEREIGN HOLDING CORP.
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By:
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Name:
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Title:
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[Form to be used to exercise Purchase
Warrant]
Date: __________, 20___
The undersigned hereby
elects irrevocably to exercise the Purchase Warrant for ______ shares of common stock, par value $0.0001 per share (the “Shares”),
of ComSovereign Holding Corp., a Nevada corporation (the “Company”), and hereby makes payment of $____ (at the
rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant
is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number
of Shares for which this Purchase Warrant has not been exercised.
or
The undersigned hereby
elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares, as
determined in accordance with the following formula:
Where,
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X
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=
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The number of Shares to be issued to Holder;
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Y
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=
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The number of Shares for which the Purchase Warrant is being exercised;
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A
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=
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The fair market value of one Share which is equal to $_____; and
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B
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=
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The Exercise Price which is equal to $______ per share
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The undersigned agrees
and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect
to the calculation shall be resolved by the Company in its sole discretion.
Please issue the Shares
as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase
Warrant representing the number of Shares for which this Purchase Warrant has not been converted.
