Exhibit 1.1
UNDERWRITING AGREEMENT
between
STRAN & COMPANY, INC.
and
EF HUTTON,
division of Benchmark Investments, LLC,
as
Representative of the Several Underwriters
STRAN & COMPANY, INC.
UNDERWRITING AGREEMENT
New York, New York
November
8, 2021
EF HUTTON,
division of Benchmark Investments, LLC
as Representative of the several Underwriters named on Schedule 1 attached
hereto
590 Madison Avenue, 39th Floor
New York, New York 10022
Ladies and Gentlemen:
The undersigned, Stran &
Company, Inc., a corporation formed under the laws of the State of Nevada (the “Company”), hereby confirms its agreement
(this “Agreement”) with EF Hutton, division of Benchmark Investments, LLC (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 SECURITIES.
1.1. Firm Units.
1.1.1. Nature and Purchase of Firm Units.
(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 4,337,349 authorized but unissued shares (the “Firm Shares”) of common stock
of the Company, par value $0.0001 per share (the “Common Stock”), together with warrants to purchase an aggregate of
4,337,349 shares of Common Stock each at an exercise price of $5.1875 (125% of the public offering price per Firm Unit in the Offering,
as defined hereafter), in the form filed as an exhibit to the Registration Statement (as defined in Section 2.1.1 below) (the “Firm
Warrants,” and collectively with the Firm Shares, the “Firm Units”). Each Firm Share and Firm Warrant will
be immediately separable and will be issued separately, but will be sold together as a unit in the Offering.
(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 $3.82 per Firm Unit (92% of the public offering price for each Firm
Unit). 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. Payment and Delivery of Firm Units.
(i) Delivery and payment for
the Firm Units 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 Robinson & Cole LLP, 1055 Washington Boulevard, Stamford, CT 06901 (“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 Units is called the “Closing Date.”
(ii) Payment for the Firm Units
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 Units (or through the facilities of the Depository
Trust Company (“DTC”)) for the account of the Underwriters. The Firm Units shall be registered in such name or names
and in such authorized denominations as the Representative may request in writing at least one (1) Business Day prior to the Closing Date.
The Company shall not be obligated to sell or deliver the Firm Units except upon tender of payment by the Representative for all of the
Firm Units. The term “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall
not be deemed to be authorized or required by law to remain closed due to “stay-at- home,” “shelter-in-place,”
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
1.2. Over-allotment Option.
1.2.1. Option Units.
For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Units, the Company hereby grants
to the Underwriters an option to purchase from the Company up to 650,602 additional shares of Common Stock (the “Option Shares”)
and accompanying warrants to purchase an aggregate of 650,602 shares of Common Stock (the “Option Warrants,” and collectively
with the Option Shares, the “Option Units”), representing fifteen percent (15%) of the Firm Units sold in the Offering
(the “Over-allotment Option”). The purchase price to be paid per Option Unit shall be equal to the price per Firm Unit
set forth in Section 1.1.1 hereof. The Firm Warrants and the Options Warrants are hereinafter collectively referred to as the “Warrants.”
The shares of Common Stock into which the Warrants are exercisable are hereinafter referred to as the “Warrant Shares.”
The Firm Units, the Option Units and Warrant Shares are hereinafter referred to together as the “Public Securities.”
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 Units within 45 days after the Effective Date. The Underwriters shall not be under any obligation
to purchase any Option Units 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 Units to be purchased and the date and time for delivery of and payment
for the Option Units (the “Option Closing Date”), which shall not be later than one (1) Business Day 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 Units 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 Units, subject
to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of Option
Units 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 Units then being purchased as set forth in Schedule 1 opposite the name of such Underwriter.
1.2.3. Payment and Delivery.
Payment for the Option Units 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 the Representative of certificates (in form and substance satisfactory to the Underwriters) representing
the Option Units (or through the facilities of DTC) for the account of the Underwriters. The Option Units shall be registered in such
name or names and in such authorized denominations as the Representative may request in writing at least one (1) Business Day prior to
the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Units except upon tender of payment by the Representative
for applicable Option Units.
1.3. Representative’s Warrants.
1.3.1. Purchase Warrants.
The Company hereby agrees to issue to the Representative (and/or its designees) on the Closing Date a warrant (“Representative’s
Warrants”) for the purchase of an aggregate of 130,120 shares of Common Stock, representing 3% of the number of Firm Shares.
The agreement(s) representing the Representative’s Warrants, 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 Units. 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 Agreement and the underlying shares of Common Stock during the one hundred eighty (180) days 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 Agreement, 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.
1.4. Non-Accountable Expenses.
The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10, 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-half
of one percent (0.5%) of the aggregate gross proceeds raised in the Offering; provided, however, that in the event that the Offering is
terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.
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 any amendment or amendments thereto, on Form S-1 (File No. 333-260109), 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”). 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 (the “Rule 430A Information”)
of the rules and regulations of the Commission promulgated thereunder (the “Securities Act Regulations”), 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 November 8, 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, that includes the Rule 430A
Information, 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 5 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 (File Number 001-41038) providing for the registration of the Common
Stock pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The registration
of Common Stock 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 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 Common Stock has been approved for listing on the Nasdaq Stock Market LLC (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 Common Stock
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 not misleading.
(iii) The Pricing Disclosure
Package, as of the Applicable Time, at the Closing Date or 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 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: the names of the Underwriters, the information in the table under the subheading titled “Over-Allotment Option”
and the information under the subheadings titled “Price Stabilization, Short Positions, and Penalty Bids”, “Offering
Information”, “Affiliations”, and “Electronic Offer, Sale and Distribution” (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, and except for any unenforceability that, individually
or in the aggregate, would not reasonably be expected to result in a Material Adverse Change (as defined in Section 2.5.1 below).
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 material 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 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” and collectively, “Governmental Entities”), including, without
limitation, those relating to environmental laws and regulations, that, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Change as defined in Section 2.5.1 below.
2.4.3. 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 under the Securities
Act and the Securities Act Regulations to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus
which are not so disclosed.
2.4.4. 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, nor to the Company’s knowledge, any change or development that, singularly or in the aggregate,
would reasonably be expected to result in a material adverse change, in or affecting the condition (financial or otherwise), results of
operations, business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material
transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no 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. Reserved.
2.7. Independent Accountants.
BF Borgers CPA PC (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 to which they apply; 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 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 pro forma and pro forma 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 in all material respects 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 Pricing Disclosure Package and the Prospectus,
the Company has not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions
other than in the ordinary course of business, (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, 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.
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 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 outstanding securities convertible into or exercisable for shares of 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 related plans or arrangements, and options
and/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 and will
be free from all 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 Warrants, when issued and paid for pursuant to this Agreement and the Warrant Agent Agreement
(as defined below), will constitute valid and binding obligations of the Company to issue and sell, upon exercise thereof and payment
therefor, the Warrant Shares. The Representative’s Warrant Agreement, when issued and paid for pursuant to this Agreement, will
constitute valid and binding obligations of the Company to issue and sell, upon exercise thereof and payment therefor, the underlying
shares of Common Stock. 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 Representative’s Warrant Agreement has been duly and validly
taken; the shares of Common Stock issuable upon exercise of 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 Representative’s
Warrant and the Representative’s Warrant Agreement, such shares of Common Stock will be validly issued, fully paid and nonassessable;
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 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: (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 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 any of the terms and provisions of, or constitute a 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 except breaches, conflicts or defaults that would not
reasonably be expected to result in a Material Adverse Change; (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 in any material respect any existing applicable law, rule,
regulation, judgment, order or decree of any Governmental Entity as of the date hereof having jurisdiction over the Company.
2.14. No Defaults; Violations.
Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no default exists in the due
performance and observance of any term, covenant or condition of any 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 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
except for any such default that would not be reasonably expected to result in a Material Adverse Change. The Company is not in violation
of any term or provision of its Charter or Bylaws, or 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 consents, authorizations, approvals, licenses, certificates, clearances, permits and orders and supplements
and amendments thereto (each an “Authorization”, and collectively, “Authorizations”)
of and from all Governmental Entities that (i) 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, and (ii) the absence of which would 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 Representative’s Warrant Agreement
and the Warrant Agent Agreement and to carry out the provisions and conditions hereof, and all Authorizations required in connection therewith
have been obtained. No Authorization of, and no filing with, any Governmental Entity 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 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 Securities Act and Securities Act Regulations, the necessary
filings and approvals from the Exchange to list the Public Securities and Representative’s Securities,, state or foreign securities
laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”), such consents and
approvals as have been obtained and are in full force and effect, and such consents, approvals, orders, authorizations and filings the
failure of which to make or obtain is not reasonably likely to result in a Material Adverse Change.
2.16. D&O Questionnaires.
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 Insiders 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 Common Stock on the Exchange that, individually or in
the aggregate, would reasonably be expected to result in a Material Adverse Change or materially and adversely affect the power or ability
of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated herein.
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 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 qualify, 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 as are customary for companies
engaged in similar business, and to the Company’s knowledge 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 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) beneficial owner of 5% or more of any class of the Company’s securities
or (iii) beneficial owner of the Company’s unregistered equity securities which were acquired 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 or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company
or any other person acting on behalf of, and with authority from, the Company, 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 could reasonably be expected to (i) subject the
Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, have
had a Material Adverse Change or (iii) if not continued in the future, 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 or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the
Company or any other person acting on behalf of, and with authority from, the Company, 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 are and have been conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Bank Secrecy 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 the Representative or to Representative Counsel
on the Closing Date or on 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 record
of all 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.
The Company has no direct or indirect subsidiaries or entity required to be disclosed or described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company.
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 under the Securities
Act and the Securities Act Regulations.
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 rules and regulations of the Commission promulgated thereunder (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 designed a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange
Act Regulations) that will comply with the requirements of the Exchange Act within the time period required and has been designed to
ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including
controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management
as appropriate to allow timely decisions regarding required disclosure.
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 that are then in effect and with which the Company is required to comply with as of the Applicable Time or on the Closing Date, 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 then applicable to the Company. .
2.30. Accounting Controls.
The Company maintains 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, its 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. To the Company’s knowledge, 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 exists or, to the knowledge of the Company, is imminent. The Company is not aware
that any officer, key employee or significant group of employees of the Company plans to terminate employment with the Company.
2.33. Intellectual Property
Rights. The Company 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”) necessary for the conduct of the business of the Company as currently carried on and as described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, except where the failure to own, possess or have valid rights
to use any of the foregoing would not reasonably be expected to result in a Material Adverse Change on the Company. To the knowledge
of the Company, no action or use by the Company necessary for the conduct of its business as currently carried on and as described in
the Registration Statement and the Prospectus would reasonably be expected to involve or give rise to any infringement of, or license
or similar fees for, any Intellectual Property Rights of others. The Company has not 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; (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; (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; 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. 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 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. The
Company 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. The Company 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 except those that are being contested in good faith
or as would not have, individually or in the aggregate, result in a Material Adverse Change. 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 material 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, 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. To the Company’s knowledge, there are no tax liens against
the assets, properties or business of the Company. 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. The Company: (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 written notice from any Governmental Entity alleging or asserting noncompliance with any Applicable Laws or
any Authorizations; (C) possesses all Authorizations and such Authorizations are valid and in full force and effect and are not in
violation of any term of any such Authorizations, except where the invalidity of such Authorizations or the failure of such
Authorizations to be in full force and effect would not result in a Material Adverse Change; (D) has not received written 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 that if brought, would result in a Material Adverse Result, nor, to the Company’s knowledge, has
there been any material noncompliance with or violation of any Applicable Laws by the Company that could reasonably be expected to
require the issuance of any such communication or result in an investigation, corrective action, or enforcement action by any
Governmental Entity; (E) has not received written 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 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 on the date filed
(or were corrected or supplemented by a subsequent submission), except where the failure to be so in compliance would not,
individually or in the aggregate, result in a Material Adverse Change.
2.37. Reserved.
2.38. 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.
2.39. Title to
Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has
good and marketable title in fee simple to, or has valid rights to lease or otherwise use, all items of real or personal property
which are material to the business of the Company, 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; and all of the leases and subleases material to the business
of the Company and under which the Company holds properties described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, are, to the Company’s knowledge, in full force and effect, the Company has not received any notice of any
material claim of any sort that has been asserted by anyone adverse to the rights of the Company under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company to the continued possession of the leased or
subleased premises under any such lease or sublease.
2.40. 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
liquidity or the availability of or requirements for its 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.
2.41. 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 to or for the benefit of any of the officers or directors of the Company or any of their
respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.42. 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.
2.43. 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.
2.44. 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.
2.45. 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 Public Securities to be considered
a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.
2.47. 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.
2.48. Integration. Neither
the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under circumstances that would cause the 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 issued in such
prior offerings under the Securities Act.
2.49. Confidentiality and
Non-Competition. No director, officer, key employee or consultant of the Company 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 be reasonable expected to result in a Material
Adverse Change.
2.50. 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.
2.51. 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.
2.52. Stabilization. Neither
the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent of the Representative) has taken,
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. COVENANTS OF THE COMPANY.
The Company covenants and agrees as follows:
3.1. Amendments to Registration
Statement. The Company shall deliver to the Representative, at least one (1) Business Day (or such shorter time mutually agreed by
the parties hereto) 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 with the requirements of Rule 430A of the Securities Act Regulations, and will,
during the period required 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, 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; or (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 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 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 three (3) years after the date of this Agreement, the Company shall use its reasonable best efforts to maintain the registration
of the Common Stock under the Exchange Act. For a period of two (2) years after the date of this Agreement, the Company shall not deregister
the Common Stock 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 the Company has knowledge that there
has occurred or is occurring 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.
3.2.5. Testing-the-Waters
Communications. If at any time following the distribution of any Written Testing-the-Waters Communication the Company has
knowledge that there occurred or is occurring an event or development as a result of which such Written Testing-the-Waters
Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not
misleading, the Company shall promptly notify the Representative and shall promptly amend or supplement, at its own expense, such
Written Testing-the-Waters Communication to eliminate or correct such 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, conformed 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 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 Public Securities on the Exchange until at least three (3) years
after the date of this Agreement.
3.8. Financial Public Relations.
Within six (6) months from the Effective Date, the Company shall have retained a financial public relations firm reasonably acceptable
to the Representative and the Company, 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 or press releases shall be deemed to have been delivered to the Representative pursuant
to this Section 3.9.1. Any documents not filed with the Commission pursuant to its EDGAR system shall be delivered to jrallo@efhuttongroup.com,
with a copy to dboral@efhuttongroup.com.
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. VStock Transfer, LLC is acceptable to the Representative
to act as Transfer Agent for the shares of Common Stock and the Warrants.
3.9.3. Trading Reports.
For a period of three (3) years after the date of this Agreement, during such time as any of 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 related to the Offering or otherwise 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 Public Securities and Representative’s Securities with the Commission; (b) all Public
Filing 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 and Representative’s 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 or qualification of the Public Securities under the “blue sky” securities laws of such states and other
jurisdictions as the Representative may reasonably designate; (f) all fees, expenses and disbursements relating to the registration,
qualification or exemption of the Public Securities under the securities laws of such foreign jurisdictions as the Representative
may reasonably designate; (g) 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;
(h) the costs and expenses of a public relations firm; (i) the costs of preparing, printing and delivering certificates representing
the Public Securities; (j) fees and expenses of the Transfer Agent for the shares of Common Stock and fees and expenses of the
warrant agent under the Warrant Agent Agreement; (k) stock transfer and/or stamp taxes, if any, payable upon the transfer of the
Public Securities from the Company to the Underwriters; (l) 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; (m) the fees and
expenses of the Company’s accountants; (n) the fees and expenses of the Company’s legal counsel and other agents and
representatives; (o) the fees and expenses of Representative Counsel; (p) the cost associated with the Underwriters’ use of
Ipreo’s book- building, prospectus tracking and compliance software for the Offering; (q) to the extent approved by the
Company in writing, the costs associated with post-Closing advertising of the Offering in the national editions of the Wall Street
Journal and New York Times; and (r) the Underwriters’ actual accountable expenses for the Offering, including, without
limitation related to the “road show.” 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 $150,000 in
the aggregate for all of the foregoing fees and expenses. 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).
3.11. 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.
For a period of one (1) year after the date of this Agreement, 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 BF Borgers CPA PC is acceptable to the Representative.
3.16. FINRA. For a
period of 90 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 5% 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. 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 one hundred eighty (180) 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; (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 other than a registration statement on Form S-4 or S-8; (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 shall not apply to (i) the Public Securities or the Representative’s Securities; (ii) the issuance by the Company
of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security, in each case outstanding on
the date hereof, provided that such options, warrants, securities are disclosed in the Registration Statement, the Pricing Disclosure
Package or the Prospectus and have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities or to extend the term of such securities, (iii) the issuance
of shares of Common Stock issued as part of the purchase price in connection with acquisitions or strategic transactions, or (iv) the
issuance by the Company of any shares of Common Stock or standard options to purchase Common Stock to directors, officers or employees
of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined below). “Approved Stock Plan”
means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director
for services provided to the Company in their capacity as such.
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 best 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 reasonably
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.
For a period of one (1) year after the date of this Agreement, 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. Warrant Agent. For
so long as the Warrants are outstanding, the Company will maintain the Warrant Agent Agreement in full force and effect with Vstock Transfer,
LLC or a transfer agent of similar competence and quality. The Firm Warrants, and, if applicable, Option Warrants, will be issued in accordance
with the Warrant Agent Agreement.
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 Common Stock 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 the favorable opinions and negative assurance letter of Bevilacqua
PLLC and/or Sherman & Howard, LLC (“Company Counsel”), 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 opinion and negative
assurance letter of Company 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 counsel
in its opinion or their respective opinions delivered on the Closing Date.
4.2.3. Reliance. The
opinion of Company Counsel and any opinion relied upon by Company Counsel shall include a statement to the effect that it may be relied
upon by Representative Counsel in its opinion delivered to the Underwriters.
4.3. Comfort Letters.
4.3.1. Comfort Letter.
At the time this Agreement is executed the Representative shall have received a cold comfort letter from the Auditors 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 reasonably satisfactory in all respects to the Representative and to Representative Counsel from the Auditors,
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 Auditors
a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditors reaffirms the statements
made in the letter furnished pursuant to Section 4.3.1.
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 stating that on behalf of the
Company and not in an individual capacity that (i) such officer has examined the Registration Statement, the Pricing Disclosure
Package, any Issuer Free Writing Prospectus and the Prospectus and, in such officer’s 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 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 in which they were made, not
misleading, (ii) to such officer’s 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 (iii) 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; (iii) as to the accuracy and completeness of all correspondence
between the Company or its counsel and the Commission; and (iv) 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 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 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 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 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. 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.
4.9. Warrant Agent Agreement.
On or before the date of this Agreement, the Company shall have entered into a Warrant Agent Agreement between the Company and Vstock
Transfer, LLC, as warrant agent with respect to the Warrants, in the form filed as an exhibit to the Registration Statement (the “Warrant
Agent Agreement”), or if applicable, as otherwise directed by the Underwriters.
4.10. 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 reasonably 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 Representative’s
Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representative and Representative Counsel.
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 the
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 (a) is based on the
Underwriters’ Information or material omission therefrom, (b) 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, or (c) is found in a final, non-appealable judgment of
a court of competent jurisdiction to have resulted primarily from the willful misconduct or gross negligence of such Underwriter
Indemnified Party.
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) the action includes both the Company and the indemnified party as defendants and 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 which makes it impossible or inadvisable for the Company and such indemnified party to be represented in the action by
the same counsel (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified
party), 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 (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 and any material information that was omitted therefrom. 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 Units or Option Units. If any Underwriter or Underwriters shall default in its or their obligations to purchase the Firm
Units or the Option Units, if the Over-allotment Option is exercised hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10% of the number of Firm Units or Option Units that all Underwriters
have agreed to purchase hereunder, then such Firm Units or Option Units 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 Units or Option Units. In the event that the default addressed in Section 6.1 relates to more than 10% of the number of
Firm Units or Option Units, the Representative may in its discretion arrange for itself or for another party or parties to purchase such
Firm Units or Option Units 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 number of Firm Units or Option Units, the Representative does not arrange for the purchase of such Firm
Units or Option Units, 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 Units or Option Units on such terms. In the event that neither
the Representative nor the Company arrange for the purchase of the Firm Units or Option Units 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 Units, this Agreement
will not terminate as to the Firm Units; 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 Units or Option Units 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, the Representative 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 reasonable 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 Units or Option Units.
7. ADDITIONAL COVENANTS.
7.1. 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.
7.2. Right of First Refusal.
The Representative shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period
of twelve (12) months following the Closing Date, to act as sole investment banker, sole book-runner and/or sole placement agent, at the
Representative’s sole discretion, for each and every future public and private equity and debt offering, including all equity linked
financings (each, a “Subject Transaction”), during such twelve (12) month period for the Company, or any successor
to or Subsidiary of the Company, on terms and conditions agreed to by both the Company and the Representative in good faith. The Company
shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof, by providing written
notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise
its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written notice,
then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may elect, in
its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided that any
such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect to any other
Subject Transaction during the period agreed to above. For the avoidance of any doubt, the Company shall not retain, engage or solicit
any additional investment banker, book-runner, financial advisor, underwriter, sales agent and/or placement agent in a Subject Transaction
without the express written consent of the Representative unless the Representative does not exercise its Right of First Refusal after
being provided adequate notice and expiration of any period in which to reply, and this Right of First Refusal shall not apply to any
transaction where the Company does not engage an investment banker, underwriter, placement agent or other intermediary. The Representative
shall have the sole right to determine whether or not any other broker-dealer shall have the right to participate in any Subject Transaction
in which it exercises this Right of First Refusal and the economic terms of any such participation.
7.3. Tail Period. Notwithstanding
any other provision of this Agreement, in the event that the Offering is not consummated by the Underwriters as contemplated herein, the
Company agrees to pay the Representative a cash fee equal to eight percent (8.0%) of the gross proceeds received by the Company from the
sale of the securities offered to any investor actually introduced by the Representative to the Company during the Engagement Period (as
defined below) (the “Tail Financing”), and such Tail Financing is consummated at any time during the Engagement Period
or within the twelve (12) month period following the expiration of the Engagement Period, provided that such financing is by a party actually
introduced to the Company in an offering in which the Company has direct knowledge of such party’s participation and not a party
that the Company can demonstrate was already known to the Company. In addition, unless (x) the Company terminates this Agreement for “Cause”
(as defined below), or (y) the Representative fails to provide the underwriting services provided in this Agreement, upon termination
of this Agreement, if the Company subsequently completes a public or private financing with any investors introduced to the Company by
the Representative during the twelve (12) month period following such termination, the Representative shall be entitled to receive the
same compensation to be paid to the Representative in connection with the Offering. “Cause”, for the purpose of this
Agreement, shall mean, as determined by a court of competent jurisdiction, willful misconduct, gross negligence or a material breach of
this Agreement by the Representative. In the event that the Company believes that the Representative has engaged in conduct constituting
Cause, the Company must first notify the Representative in writing of the facts and circumstances supporting such an assertion(s), and
the Representative shall have twenty (20) days to cure such alleged conduct. “Engagement Period” shall mean the period
beginning on March 9, 2021, and ending on the earlier of (i) twelve (12) months from the date of such date, (ii) the final closing, if
any, of the Offering, or (iii) the date that either party to this Agreement gives the other party to this Agreement at least thirty (30)
days’ advance written notice of termination of that certain engagement letter agreement by and between the Company and the Representative,
dated as of March 9, 2021.
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 reasonable 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 a banking moratorium has been declared by a New York State or federal authority; or (iv) if a moratorium on
foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (v) 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 the Representative’s reasonable opinion, make it inadvisable to
proceed with the delivery of the Firm Units or Option Units; or (vi) if the Company is in material breach of any of its representations,
warranties or covenants hereunder; or (vii) 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 fees and disbursements of Representative Counsel)
up to $50,000, inclusive of the payments totaling up to $50,000 in 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. 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. Constructive Knowledge.
Whenever a representation or warranty or other statement in this Agreement (including, without limitation, schedules hereto) is made with
respect to a party’s “knowledge,” such statement refers to the knowledge, after reasonable inquiry, of such party’s
employees or agents who were or are responsible for or involved with the indicated matter.
9.2. 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 email or facsimile transmission and confirmed and
shall be deemed given when so delivered or emailed or faxed and confirmed (which confirmation may be by email or facsimile
transmission) or if mailed, two (2) days after such mailing.
If to the Representative:
EF Hutton
590 Madison Avenue, 39th Floor
New York, New York 10022
Attn: Joseph T. Rallo
Email: jrallo@efhuttongroupcm.com
with a copy (which shall not constitute notice) to:
Robinson & Cole LLP
1055 Washington Boulevard
Stamford, CT 06901
Attn: Mitchell L. Lampert
Fax No.: (203) 462-7599
Email: MLampert@rc.com
If to the Company:
Stran & Company, Inc.
2 Heritage Drive, Suite 600
Quincy, MA 02171
Attn: Andrew Shape, Chief Executive Officer
Email: andyshape@stran.com
with a copy (which shall not constitute notice) to:
Bevilacqua PLLC
1050 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
Attn: Louis A. Bevilacqua
Email: lou@bevilacquapllc.com
9.3. 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.
9.4. Amendment. This
Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.5. 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.
9.6. 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.
9.7. 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.
9.8. 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.
9.9. 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 affect 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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Stran & Company, Inc.
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By:
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/s/ Andrew Shape
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Name:
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Andrew Shape
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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:
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EF HUTTON,
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division of Benchmark Investments, LLC
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By:
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Name: Sam Fleischman
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Title: Supervisory Principal
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[Signature Page to Underwriting Agreement]
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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Stran & Company, Inc.
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By:
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Name: Andrew Shape
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Title: 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:
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EF HUTTON,
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division of Benchmark Investments, LLC
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By:
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/s/ Sam Fleischman
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Name: Sam Fleischman
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Title: Supervisory Principal
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[Signature Page to Underwriting Agreement]
SCHEDULE 1
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Underwriter
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Total
Number
of Firm Units
to be
Purchased
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Number of
Additional
Option Units to be
Purchased if the
Over-Allotment
Option
is Fully
Exercised
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EF Hutton, division of Benchmark Investments, LLC
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4,037,349
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650,602
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US Tiger Securities, Inc.
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295,000
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0
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Joseph Gunnar & Co. LLC
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5,000
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0
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TOTAL
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4,337,349
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650,602
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SCHEDULE 2-A
Pricing Information
Number of Firm Units: 4,337,349
Number of Option Units: 650,602
Public Offering Price per Firm Unit: $4.15
Public Offering Price per
Option Unit: $4.15
Underwriting Discount per Firm Unit: $0.33
Underwriting Discount per Option Unit: $0.33
Proceeds to Company per Firm Unit (before expenses): $3.82
Proceeds
to Company per Option Unit (before expenses): $3.82
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
None.
SCHEDULE 3
List of Lock-Up Parties
Andrew Stranberg
Andrew Shape
Randolph Birney
Christopher Rollins
John
Audibert
Travis McCourt
Alan Chippindale
Alejandro Tani
Ashley Marshall
Theseus Capital Ltd.
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) EF HUTTON, DIVISION OF BENCHMARK INVESTMENTS,
LLC OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF EF HUTTON, DIVISION
OF BENCHMARK INVESTMENTS, LLC OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR
TO [ ] [DATE THAT IS SIX MONTHS FROM THE EFFECTIVE DATE OF THE OFFERING]. VOID AFTER 5:00 P.M., EASTERN TIME, [ ] [DATE THAT
IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING].
COMMON STOCK PURCHASE WARRANT
For the Purchase of [ ] Shares of Common Stock
of
Stran & Company, Inc.
1. Purchase Warrant. THIS CERTIFIES
THAT, in consideration of funds duly paid by or on behalf of EF Hutton, division of Benchmark Investments, LLC
(“Holder”), as registered owner of this Purchase Warrant of Stran & Company, Inc., a Nevada corporation (the
“Company”), Holder is entitled, at any time or from time to time from [ ] [DATE THAT IS SIX MONTHS FROM THE
EFFECTIVE DATE OF THE OFFERING] (the “Commencement Date”), and at or before 5:00 p.m., Eastern time, [ ]
[DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING] (the ”Expiration Date”), but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up to [ ] 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
$[ ] 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 [ ], 2021, the
date on which the Registration Statement on Form S-1 (File No. 333- [ ]) 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:
X = Y(A-B)
A
Where,
X = The number of Shares to be issued to Holder;
Y = The number of Shares for which the Purchase Warrant is being exercised;
A = The fair market value of one Share; and
B = The Exercise Price.
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 or the securities issuable hereunder for a period of
one hundred eighty (180) days following the Effective Date to anyone other than: (i) EF Hutton, division of Benchmark Investments,
LLC (“EF Hutton”) or an underwriter or a selected dealer participating in the Offering, or (ii) a bona fide
officer or partner of EF Hutton 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 one hundred eighty (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 Bevilacqua PLLC 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 (1) 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 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 fifth 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 [ ], 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.
4.4 Termination of Registration
Rights. The registration rights afforded to the Holders under this Section 4 shall terminate on the earliest date when all Registrable
Securities of such Holder either: (i) have been publicly sold by such Holder pursuant to a Registration Statement, (ii) have been covered
by an effective Registration Statement on Form S-1 or Form S-3 (or successor form), which may be kept effective as an evergreen Registration
Statement, or (iii) may be sold by the Holder within a 90 day period without registration pursuant to Rule 144 or consistent with applicable
SEC interpretive guidance (including CD&I no. 201.04 (April 2, 2007) or similar interpretive guidance).
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. Except as may otherwise be required under Section 6.2 hereof, 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. 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 Executive
Officer or 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 the following address or to such other
address as the Company may designate by notice to the Holders:
If to the Holder:
EF Hutton
590 Madison Avenue, 39th Floor
New York, New York 10022
Attn: Joseph T. Rallo
with a copy (which shall not constitute notice) to:
Robinson &
Cole LLP
1055 Washington Boulevard
Stamford, CT 06901
Attn: Mitchell L. Lampert
Fax No.: (203) 462-7599
If to the Company:
Stran & Company, Inc.
2 Heritage Drive, Suite 600
Quincy, MA 02171
Attn: Andrew Shape, Chief Executive Officer
Fax No.: [ ]
with a copy (which shall not constitute notice) to:
Bevilacqua PLLC
1050 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
Attn: Louis A. Bevilacqua
Fax No.: [ ]
9. Miscellaneous.
9.1 Amendments. The
Company and EF Hutton 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 EF Hutton may deem necessary
or desirable and that the Company and EF Hutton 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 representatives 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 EF Hutton 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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Stran & Company, Inc.
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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 Stran & Company, Inc., 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:
X
= Y(A-B)
A
Where,
X = The number of Shares to be issued to Holder;
Y = The number of Shares for which the Purchase Warrant is being exercised;
A = The fair market value of one Share which is equal to $ ; and
B = The Exercise Price which is equal to $ per share
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.
Signature______________________________
Signature Guaranteed _____________________
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INSTRUCTIONS FOR REGISTRATION OF SECURITIES
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Name:
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(Print in Block Letters)
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Address:
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NOTICE: The signature to this
form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national
securities exchange.
[Form to be used to assign Purchase Warrant]
ASSIGNMENT
(To be executed by the registered Holder to effect
a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED, _ does hereby sell, assign
and transfer unto the right to purchase shares of common stock, par value $0.0001 per share, of Stran & Company, Inc., a Nevada corporation
(the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on
the books of the Company.
Dated:_________, 20__
Signature___________________________________
Signature Guaranteed__________________________
NOTICE: The signature to this form must correspond
with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and
must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national
securities exchange.
EXHIBIT B
Form of Lock-Up Agreement
Lock-Up Agreement
____________, 2021
EF HUTTON,
division of Benchmark Investments, LLC
as Representative of the Underwriters
590 Madison Avenue, 39th Floor
New York, New York 10022
Ladies and Gentlemen:
The undersigned understands
that EF Hutton, division of Benchmark Investments, LLC (the “Representative”) proposes to enter into an Underwriting
Agreement (the “Underwriting Agreement”) with Stran & Company, Inc., a Nevada corporation (the “Company”),
providing for the public offering (the “Public Offering”) of shares of common stock of the Company, par value $0.0001
per share (the “Common Stock”), together with warrants to purchase shares of Common Stock each at an exercise price
equal to 125% of the public offering price per Firm Unit (as defined hereafter) (the “Warrants,” and collectively with
the Common Stock, the “Securities”).
To induce the Representative
to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent
of the Representative, the undersigned will not, during the period commencing on the date hereof and ending 180 days after the date of
the Underwriting Agreement (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise
transfer or dispose of, directly or indirectly, any Common Stock or any securities convertible into or exercisable or exchangeable for
the Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any
such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make
any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention
to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up
Securities. Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without
the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market
transactions after the completion of the Public Offering; provided that no filing under Section 13 or Section 16(a) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement shall be required or shall be
voluntarily made during the Lock-Up Period in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions;
(b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of
a family member (for purposes of this lock-up agreement, “family member” means any relationship by blood, marriage or adoption,
not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; or (d) if the undersigned,
directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-
Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the case may be;
provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) it shall be a condition to any
such transfer that (i) the transferee/donee agrees to be bound by the terms of this lock-up agreement (including, without limitation,
the restrictions set forth in the preceding sentence) to the same extent as if the transferee/donee were a party hereto; (ii) each party
(donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act) to make, and shall agree to not voluntarily
make, any filing or public announcement of the transfer or disposition prior to the expiration of the Lock-Up Period; and (iii) the undersigned
notifies the Representative at least two (2) business days prior to the proposed transfer or disposition.
In addition, the foregoing
restrictions shall not apply to (i) the exercise or vesting of stock options or other equity awards granted pursuant to the Company’s
equity incentive plans; provided that it shall apply to any of the undersigned’s Common Stock issued upon such exercise, (ii) the
conversion or exercise of convertible debt or warrants; provided that it shall apply to any of the undersigned’s Common Stock issued
upon such exercise, or (iii) the establishment of any new plan (a “Plan”) that satisfies all of the requirements of
Rule 10b5-1(c)(1)(i)(B) under the Exchange Act; provided that no sales of the undersigned’s Securities shall be made pursuant to
such new Plan prior to the expiration of the Lock-Up Period (as such may have been extended pursuant to the provisions hereof), and such
a Plan may only be established if no public announcement of the establishment or existence thereof and no filing with the Securities and
Exchange Commission or other regulatory authority in respect thereof or transactions thereunder or contemplated thereby, by the undersigned,
the Company or any other person, shall be required, and no such announcement or filing is made voluntarily, by the undersigned, the Company
or any other person, prior to the expiration of the Lock-Up Period (as such may have been extended pursuant to the provisions hereof).
The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of
the undersigned’s Securities subject to this lock-up agreement except in compliance with this lock-up agreement.
If the undersigned is an
officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable to any
Securities that the undersigned may purchase in the Public Offering; (ii) the Representative agrees that, at least three (3)
business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of
Lock-Up Securities, the Representative will notify the Company of the impending release or waiver; and (iii) the Company has agreed
in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two
(2) business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder
to any such officer or director shall only be effective two (2) business days after the publication date of such press release. The
provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up
Securities not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this
lock-up agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.
The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public Offering.
The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s heirs,
legal representatives, successors and assigns.
The undersigned understands
that, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and delivery of the Securities to be sold thereunder, the undersigned
shall be released from all obligations under this lock-up agreement.
This lock-up agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
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Very truly yours,
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(Name - Please Print)
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(Signature)
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(Name of Signatory, in the case of entities - Please Print)
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(Title of Signatory, in the case of entities - Please Print)
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EXHIBIT C
Form of Press Release
[____________]
[Date]
Stran & Company, Inc. (the
“Company”) announced today that EF Hutton, division of Benchmark Investments, LLC, acting as representative for the
underwriters in the Company’s recent public offering of units consisting of the Company’s Common Stock and warrants to
purchase the Company’s Common Stock, is [waiving] [releasing] a lock-up restriction with respect to _______________ shares of
Common Stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take
effect on___________, 20 , and such shares of Common Stock may be sold on or after such date.
This press release is not an offer or sale
of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities may not
be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933, as amended.
C-1
Exhibit 10.1
Stran & Company, Inc.
And
Vstock Transfer, LLC,
as Warrant
Agent
Warrant Agency
Agreement
Dated as of November 8, 2021
WARRANT AGENCY AGREEMENT
WARRANT AGENCY AGREEMENT,
dated as of November 8, 2021 (“Agreement”) between Stran & Company, Inc., a Nevada corporation (the “Company”),
and Vstock Transfer, LLC, a limited liability company organized under the laws of California (the “Warrant Agent”).
WITNESSETH
WHEREAS, pursuant to
the terms of that certain Underwriting Agreement (“Underwriting Agreement”), dated November 8, 2021, by and among the
Company and EF Hutton, division of Benchmark Investments, LLC, as representative of the underwriters set forth therein (the “Representative”),
the Company is engaged in a public offering (the “Offering”) of up to 4,987,951 units (each a “Unit”)
with each Unit consisting of one share (collectively, the “Shares”) of common stock of the Company, par value $0.0001
per share (the “Common Stock”), and a warrant (collectively, the “Warrants”) to purchase one share
of Common Stock (collectively, the “Warrant Shares”) at an exercise price of $5.1875 per share, including 650,602 Shares
and 650,602 Warrants issuable pursuant to the underwriters’ over-allotment option;
WHEREAS, upon the
terms and subject to the conditions hereinafter set forth and pursuant to an effective registration statement on Form S-1, as amended
(File No. 333-260109) and a registration statement on Form S-1 filed pursuant to Rule 462(b) under the Securities Act (File No. 333-260880)
(collectively, the “Registration Statement”), and the terms and conditions of the Warrant Certificates, the Company
wishes to issue the Warrants in book entry form to the respective holders of the Warrants (the “Holders,” which term
shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in
“street name,” a Participant (as defined below) or a designee appointed by such Participant); and
WHEREAS, the Shares
and Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately, but will be purchased
together in the Offering; and
WHEREAS, the Company
wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance,
registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s
transfer agent, the delivery of the Warrant Shares.
NOW, THEREFORE,
in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain
Definitions. For purposes of this Agreement, all capitalized terms not herein defined shall have the meanings hereby indicated:
(a) Affiliate”
has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(b) Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be
authorized or required by law to remain closed due to “stay at home,” “shelter-in-place,” “non-
essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of
commercial banks in The City of New York generally are open for use by customers on such day.
(c) Close
of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not
a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.
(d) Person”
means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization,
government or political subdivision thereof or governmental agency or other entity.
(e) Warrant
Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto, representing such number of
Warrant Shares as is indicated therein, provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include
delivery of a Definitive Certificate or a Global Warrant (each as defined below).
All other capitalized
terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.
Section 2. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions
hereof, and the Warrant Agent hereby accepts such appointment.
Section 3. Global Warrants.
(a) The
Warrants shall be registered securities and shall be evidenced by a global warrant (the “Global Warrants”), in the
form of the Warrant Certificate, which shall be deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee
of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial
interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the
Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with
respect to a Warrant in its account, a “Participant”).
(b) If
the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant
Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer
necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to
deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each
Holder a Warrant Certificate.
(c) A Holder
has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate
Request Notice (as defined below). Upon written notice by a Holder to the Company and the Warrant Agent for the exchange of some or
all of such Holder’s Global Warrants for a separate certificate in the form attached hereto as Exhibit 1 (such separate
certificate, a “Definitive Certificate”) evidencing the same number of Warrants, which request shall be in the
form attached hereto as Exhibit 2 (a “Warrant Certificate Request Notice” and the date of delivery of such
Warrant Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the surrender
by the Holder to the Warrant Agent of a number of Global Warrants for the same number of Warrants evidenced by a Warrant
Certificate, a “Warrant Exchange”), the Company and the Warrant Agent shall promptly effect the Warrant Exchange
and the Company shall promptly issue and deliver to the Holder a Definitive Certificate for such number of Warrants in the name set
forth in the Warrant Certificate Request Notice. Such Definitive Certificate shall be dated the original issue date of the Warrants,
shall be executed either manually or by facsimile signature by an authorized signatory of the Company, shall be in the form attached
hereto as Exhibit 1 and shall be reasonably acceptable in all respects to such Holder. In connection with a Warrant Exchange,
the Company agrees to deliver the Definitive Certificate to the Holder within ten (10) Business Days of the Warrant Certificate
Request Notice pursuant to the delivery instructions in the Warrant Certificate Request Notice (“Warrant Certificate
Delivery Date”). If the Company fails for any reason to deliver to the Holder the Definitive Certificate subject to the
Warrant Certificate Request Notice by the Warrant Certificate Delivery Date, the Company shall pay to the Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Definitive Certificate (based on the
VWAP (as defined in the Warrants) of the Shares on the Warrant Certificate Request Notice Date), $10 per Business Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Business Day after such Warrant
Certificate Delivery Date until such Definitive Certificate is delivered or, prior to delivery of such Warrant Certificate, the
Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate
Request Notice, the Holder shall be deemed to be the holder of the Definitive Certificate and, notwithstanding anything to the
contrary set forth herein, the Definitive Certificate shall be deemed for all purposes to contain all of the terms and conditions of
the Warrants evidenced by such Warrant Certificate and the terms of this Agreement, other than Sections 3(c), 3(d) and 9 herein,
shall not apply to the Warrants evidenced by the Definitive Certificate. Notwithstanding anything herein to the contrary, the
Company shall act as warrant agent with respect to any Definitive Certificate requested and issued pursuant to this section.
Notwithstanding anything to the contrary contained in this Agreement, in the event of inconsistency between any provision in this
Agreement and any provision in a Definitive Certificate, as it may from time to time be amended, the terms of such Definitive
Certificate shall control.
(d) A Holder of a
Definitive Certificate (pursuant to a Warrant Exchange or otherwise) has the right to elect at any time or from time to time a
Global Warrants Exchange (as defined below) pursuant to a Global Warrants Request Notice (as defined below). Upon written notice by
a Holder to the Company for the exchange of some or all of such Holder’s Warrants evidenced by a Definitive Certificate for a
beneficial interest in Global Warrants held in book- entry form through the Depositary evidencing the same number of Warrants, which
request shall be in the form attached hereto as Exhibit 3 (a “Global Warrants Request Notice” and the date
of delivery of such Global Warrants Request Notice by the Holder, the “Global Warrants Request Notice Date” and
the surrender upon delivery by the Holder of the Warrants evidenced by Definitive Certificates for the same number of Warrants
evidenced by a beneficial interest in Global Warrants held in book-entry form through the Depositary, a “Global Warrants
Exchange”), the Company shall promptly effect the Global Warrants Exchange and shall promptly direct the Warrant Agent to
issue and deliver to the Holder Global Warrants for such number of Warrants in the Global Warrants Request Notice, which beneficial
interest in such Global Warrants shall be delivered by the Depositary’s Deposit and Withdrawal at Custodian
(“DWAC”) system to the Holder pursuant to the instructions in the Global Warrants Request Notice. In connection
with a Global Warrants Exchange, the Company shall direct the Warrant Agent to deliver the beneficial interest in such Global
Warrants to the Holder within ten (10) Business Days of the Global Warrants Request Notice pursuant to the delivery instructions in
the Global Warrants Request Notice (“Global Warrants Delivery Date”). If the Company fails for any reason to
deliver to the Holder Global Warrants subject to the Global Warrants Request Notice by the Global Warrants Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by
such Global Warrants (based on the VWAP (as defined in the Warrants) of the Shares on the Global Warrants Request Notice Date), $10
per Business Day (increasing to $20 per Business Day on the fifth Business Day after such liquidated damages begin to accrue) for
each Business Day after such Global Warrants Delivery Date until such Global Warrants are delivered or, prior to delivery of such
Global Warrants, the Holder rescinds such Global Warrants Exchange. The Company covenants and agrees that, upon the date of delivery
of the Global Warrants Request Notice, the Holder shall be deemed to be the beneficial holder of such Global Warrants.
Section 4. Form
of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Warrant Shares (“Notice
of Exercise”) and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit 1 hereto.
Section 5. Registration.
The Warrant Agent
will keep or cause to be kept at one of its offices, or at the office of one of its agents, books (“Warrant Register”)
for registration and transfer of the Global Warrants issued hereunder. The Company will keep or cause to be kept at one of its offices,
books for the registration and transfer of any Definitive Certificates issued hereunder and the Warrant Agent shall not have any obligation
to keep books and records with respect to any Definitive Certificates. Such Company books shall show the names and addresses of the respective
Holders of the Definitive Certificates, the number of warrants evidenced on the face of each such Definitive Certificate and the date
of each such Definitive Certificate.
Section 6.
Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
With respect to the Definitive Certificates, subject to the provisions of the Warrant Certificate and the last sentence of this
first paragraph of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions
applicable to the Definitive Certificates, at any time after the closing date of the Offering, and at or prior to the Close of
Business on the Termination Date (as such term is defined in the Warrant Certificate), any Definitive Certificate may be
transferred, split up, combined or exchanged for another Definitive Certificate or Definitive Certificates, entitling the Holder to
purchase a like number of Shares as the Definitive Certificate surrendered then entitled such Holder to purchase. Any Holder
desiring to transfer, split up, combine or exchange any Definitive Certificate shall make such request in writing delivered to the
Company, and shall surrender the Definitive Certificate to be transferred, split up, combined or exchanged at the principal office
of the Company. Any requested transfer of Warrants, whether in book-entry form or certificate form, shall be accompanied by
reasonable evidence of authority of the party making such request that may be required by the Company. Thereupon the Warrant Agent
shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto a
Definitive Certificate or Definitive Certificates, as the case may be, as so requested. The Company may require payment from the
Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up,
combination or exchange of Definitive Certificates.
Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence
shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case
of loss, theft or destruction, of indemnity in customary form and amount (but, with respect to any Definitive Certificates, shall not
include the posting of any bond by the Holder), and reimbursement to the Company of all reasonable expenses incidental thereto, and upon
surrender to the Company and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a new Warrant Certificate
of like tenor to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.
Section
7. Exercise of Warrants; Exercise Price; Termination Date.
(a) The
Warrants shall be exercisable commencing on the Initial Exercise Date (as defined in the Warrant Certificate). The Warrants shall cease
to be exercisable and shall terminate and become void as set forth in the Warrant Certificate. Subject to the foregoing and to Section
7(b) below, the Holder of a Warrant may exercise the Warrant in whole or in part upon surrender of the Warrant Certificate, if required,
with the executed Notice of Exercise and payment of the Exercise Price (as defined in the Warrant Certificate), which may be made, at
the option of the Holder, by wire transfer or by certified or official bank check in United States dollars, to the Company at the principal
office of the Company. In the case of the Holder of a Global Warrant, the Holder shall deliver the executed Notice of Exercise and the
payment of the Exercise Price as described herein. Notwithstanding any other provision in this Agreement, a holder whose interest in a
Global Warrant is a beneficial interest in a Global Warrant held in book-entry form through the Depositary (or another established clearing
corporation performing similar functions), shall effect exercises by delivering to the Depositary (or such other clearing corporation,
as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by the
Depositary (or such other clearing corporation, as applicable). No ink-original Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. The Company hereby acknowledges and agrees
that, with respect to a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry form
through the Depositary (or another established clearing corporation performing similar functions), upon delivery of irrevocable instructions
to such holder’s Participant to exercise such warrants, that solely for purposes of Regulation SHO under the Exchange Act that such
holder shall be deemed to have exercised such warrants.
(b) Upon
receipt of a Notice of Exercise for a Cashless Exercise provided by a holder to the Depositary and/or the Company, as applicable (as
provided in Section 7(a) above), the Company will promptly calculate and transmit to the Warrant Agent the number of Warrant Shares
issuable in connection with such Cashless Exercise and deliver a copy of the Notice of Exercise to the Warrant Agent, which shall
cause to be delivered in accordance with the provisions of Section 7(c) such number of Warrant Shares in connection with such
Cashless Exercise.
(c) Upon
the exercise of the Warrant Certificate pursuant to the terms of Section 2 of the Warrant Certificate, the Warrant Agent shall cause the
Warrant Shares underlying such Definitive Certificate or Global Warrant to be delivered to or upon the order of the Holder of such Definitive
Certificate or Global Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant Share Delivery
Date (as such term is defined in the Warrant Certificate). If the Company is then a participant in the DWAC system of the Depositary and
either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares
by Holder or (B) the Warrant is being exercised via Cashless Exercise, then the certificates for Warrant Shares shall be transmitted by
the Warrant Agent to the Holder by crediting the account of the Holder’s broker with the Depositary through its DWAC system. For
the avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2(d)(i) or 2(d)(iv) of
the Warrant Certificate, such obligation shall be solely that of the Company and not that of the Warrant Agent. Notwithstanding anything
else to the contrary in this Agreement, except in the case of a Cashless Exercise, if any Holder fails to duly deliver payment to the
Company of an amount equal to the aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s
Warrant as set forth in Section 7(a) hereof by the Warrant Share Delivery Date, the Warrant Agent will not be obligated to deliver such
Warrant Shares (via DWAC or otherwise) until following receipt by the Company of such payment, and the applicable Warrant Share Delivery
Date shall be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Company.
Section 8. Cancellation
and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall be surrendered to the Company or to any of its agents for cancellation or in canceled form.
Section 9. Certain Representations; Reservation and Availability
of Shares or Cash.
(a) This
Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof
by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance
with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due authentication thereof
by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Warrant Certificate, constitute valid and
legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits
hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(b) As of the date
hereof, the authorized share capital of the Company consists 350,000,000 shares, consisting of 300,000,000 shares of Common Stock,
of which 10,000,000 shares of Common Stock are issued and outstanding, and 50,000,000 shares of “blank check” preferred
stock, par value $0.0001 per share. Except as disclosed in the Registration Statement, there are no other outstanding obligations,
warrants, options or other rights to subscribe for or purchase from the Company any shares of Common Stock of the Company.
(c) The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Common
Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of Warrant Shares
that will be sufficient to permit the exercise in full of all outstanding Warrants.
(d) The
Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Warrant Shares upon
exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect
of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Warrant Shares
in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver
any certificate for Warrant Shares upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any
such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender) or until it has been
established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.
Section 10. Warrant
Shares Record Date. Each Person in whose name any certificate for Warrant Shares is issued (or to whose broker’s account is
credited Warrant Shares through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to have become the holder
of record for the Warrant Shares represented thereby on, and such certificate shall be dated, the date on which submission of the Notice
of Exercise was made, provided that the Warrant Certificate evidencing such Warrant is duly surrendered (but only if required herein)
and payment of the Exercise Price (and any applicable transfer taxes) is received on or prior to the Warrant Share Delivery Date; provided,
however, that if the date of submission of the Notice of Exercise is a date upon which the Common Stock transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next
succeeding day on which the Common Stock transfer books of the Company are open.
Section 11.
Adjustment of Exercise Price, Number of Warrant Shares or Number of the Company Warrants. The Exercise Price, the number of
Warrant Shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as
provided in Section 3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant to
Section 3 of the Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Warrant Shares, thereafter the number of such other shares so receivable upon exercise of
any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in Section 3 of the Warrant Certificate and the provisions of Sections 7, 11 and 12
of this Agreement with respect to the Warrant Shares shall apply on like terms to any such other shares. All Warrants originally
issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant Certificate shall evidence the
right to purchase, at the adjusted Exercise Price, the number of Warrant Shares purchasable from time to time hereunder upon
exercise of the Warrants, all subject to further adjustment as provided herein.
Section 12. Certification
of Adjusted Exercise Price or Number of Warrant Shares. Whenever the Exercise Price or the number of Warrant Shares issuable upon
the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate setting
forth the Exercise Price of each Warrant as so adjusted, and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate and (c) instruct the Warrant
Agent to send a brief summary thereof to each Holder of a Warrant Certificate.
Section 13. Fractional Shares.
(a) The
Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional
Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such
fraction to the nearest whole Warrant (rounded down).
(b) The
Company shall not issue fractions of Warrant Shares upon exercise of Warrants or distribute stock certificates which evidence fractional
Warrant Shares. Whenever any fraction of Warrant Shares would otherwise be required to be issued or distributed, the actual issuance or
distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.
Section 14. Conditions
of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to
time of the Warrant Certificates shall be subject:
(a) Compensation
and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation detailed on Exhibit 4 hereto
for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including
reasonable counsel fees) incurred without gross negligence or willful misconduct finally adjudicated to have been directly caused by
the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, or willful
misconduct on the part of the Warrant Agent, finally adjudicated to have been directly caused by Warrant Agent hereunder, including
the reasonable costs and expenses of defending against any claim of such liability. The Warrant Agent shall be under no obligation
to institute or defend any action, suit, or legal proceeding in connection herewith or to take any other action likely to involve
the Warrant Agent in expense, unless first indemnified to the Warrant Agent’s satisfaction. The indemnities provided by this
paragraph shall survive the resignation or discharge of the Warrant Agent or the termination of this Agreement. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Warrant Agent be liable under or in connection with the Agreement
for indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever, including, but not limited,
to lost profits, whether or not foreseeable, even if the Warrant Agent has been advised of the possibility thereof and regardless of
the form of action in which such damages are sought, and the Warrant Agent’s aggregate liability to the Company, or any of the
Company’s representatives or agents, under this Section 14(a) or under any other term or provision of this Agreement, whether
in contract, tort, or otherwise, is expressly limited to, and shall not exceed in any circumstances, one (1) year’s fees
received by the Warrant Agent as fees and charges under this Agreement, but not including reimbursable expenses previously
reimbursed to the Warrant Agent by the Company hereunder.
(b) Agent
for the Company. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting
solely as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of
Warrant Certificates or beneficial owners of Warrants.
(c) Counsel.
The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice of
such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the advice of such counsel.
(d) Documents.
The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon
any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.
(e) Certain
Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants,
with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable
law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee
or agent for, any committee or body of Holders of the Warrants or other obligations of the Company as freely as if it were not the Warrant
Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture
to which the Company is a party.
(f) No
Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall have no liability for interest on any monies
at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.
(g) No
Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or the Warrant
Certificates (except as to the Warrant Agent’s countersignature thereon).
(h) No
Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein or
in the Warrant Certificate (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.
(i) No
Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may
tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion,
assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of
the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificate. The Warrant Agent shall have no duty or responsibility in
case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates
or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including,
without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at
law.
Section 15. Purchase
or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may
be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent
or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business of the Warrant Agent or any
successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor
Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent shall succeed to the agency created
by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may
adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates
either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant
Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.
In case at any time
the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver such Warrant Certificates so countersigned;
and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant
Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.
Section 16. Duties
of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company, by its acceptance hereof, shall be bound:
(a) The
Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.
(b) Whenever
in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chief Executive Officer or Chief Financial Officer of the Company; and such certificate shall be full
authentication to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) Subject
to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence or willful misconduct,
or for any intentional breach by it of this Agreement.
(d) The
Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the
Warrant Certificate (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The
Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement
or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the
number of Warrant Shares required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such
change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise
of Warrants evidenced by the Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Warrant Shares to be issued pursuant
to this Agreement or any Warrant Certificate or as to whether any Warrant Shares will, when issued, be duly authorized, validly issued,
fully paid and nonassessable.
(f) Each
party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out
or performing by any party of the provisions of this Agreement.
(g) The
Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief Executive
Officer or Chief Financial Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence or
willful misconduct.
(h) The
Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The
Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct
of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
Section 17. Change
of Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign and be discharged from its duties under
this Agreement upon 30 days’ notice in writing sent to the Company or such shorter period of time agreed to by the Company. The
Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or
successor Warrant Agent, as the case may be, or such shorter period of time as agreed. If the office of the Warrant Agent becomes vacant
by resignation, termination or incapacity to act or otherwise, the Company shall appoint a successor to the Warrant Agent. If the Company
shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity
by the Warrant Agent, then the Warrant Agent or any Holder of any Warrant Certificate may apply to any court of competent jurisdiction
for the appointment of a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed to be the Warrant
Agent until a new warrant agent is appointed. Any successor Warrant Agent (but not including the initial Warrant Agent), whether appointed
by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of a state
thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination
by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights,
immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder,
without any further act or deed, and except for executing and delivering documents as provided in the sentence that follows, the predecessor
Warrant Agent shall have no further duties, obligations, responsibilities or liabilities hereunder, but shall be entitled to all rights
that survive the termination of this Warrant Agreement and the resignation or removal of the Warrant Agent, including, but not limited
to, its right to indemnity hereunder. If for any reason it becomes necessary or appropriate or at the request of the Company, the predecessor
Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all
the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company
shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
Section 18. Issuance
of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company
may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Exercise Price per share and the number or kind or class of shares or other securities or property purchasable
under the several Warrant Certificates made in accordance with the provisions of this Agreement.
Section 19. Notices. Notices
or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to
or on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on
the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate shall be deemed given (a) on
the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express or
another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business
Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), and
(d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to 5:30
p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York
City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
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(a)
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If to the Company, to
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Stran & Company, Inc.
2 Heritage Drive, Suite 600
Quincy, MA 02171
Attn: Andrew Shape, Chief Executive Officer
Email: andyshape@stran.com
with a copy (which shall not constitute notice) to:
Bevilacqua
PLLC
1050 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
Attention: Louis A. Bevilacqua
E-mail: Lou@bevilacquapllc.com
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(b)
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If to the Warrant Agent, to
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Vstock Transfer, LLC
18 Lafayette Place
Woodmere, NY 11598
Attention: Relationship Management
E-mail: info@vstocktransfer.com
For any notice delivered by email to be
deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next business day
following such email, unless the recipient of such email has acknowledged via return email receipt of such email.
(c) If
to the Holder of any Warrant Certificate to the address of such Holder as shown on the registry books of the Company. Any notice
required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company.
Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any
Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the
Depositary or its designee.
Section 20. Supplements and Amendments.
(a) The
Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global Warrants
in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrants or to surrender any
rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall not adversely
affect the interests of the Holders of the Global Warrants or Warrant Certificates in any material respect.
(b) In
addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority
of the Warrant Shares issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying in any manner the rights of the
Holders of the Global Warrants; provided, however, that no modification of the terms (including but not limited to the adjustments described
in Section 11) upon which the Warrants are exercisable or the rights of holders of Warrants to receive liquidated damages or other payments
in cash from the Company or reducing the percentage required for consent to modification of this Agreement may be made without the consent
of the Holder of each outstanding Warrant Certificate affected thereby; provided further, however, that no amendment hereunder shall affect
any terms of any Warrant Certificate issued in a Warrant Exchange. As a condition precedent to the Warrant Agent’s execution of
any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states
that the proposed amendment complies with the terms of this Section 20.
Section 21. Successors.
All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 22. Benefits
of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant
Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement. This Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.
Section 23. Governing
Law. This Agreement and each Warrant Certificate and Global Warrant issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.
Section 24. Counterparts.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument.
Section 25. Captions.
The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 26. Information.
The Company agrees to promptly provide to the Holders of the Warrants any information it provides to the holders of the Common Stock,
except to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities and Exchange
Commission.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed as of the day and year first above written.
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STRAN & COMPANY, INC.
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By:
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/s/ Andrew Shape
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Name
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Andrew Shape
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Title:
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Chief Executive Officer
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VSTOCK TRANSFER, LLC
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By:
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/s/ Yoel Goldfeder
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Name:
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Yoel Goldfeder
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Title:
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Chief Executive Officer
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EXHIBIT 1
Warrant Certificate
COMMON STOCK PURCHASE WARRANT
STRAN & COMPANY, INC.
Warrant Shares: [ ] Initial Exercise
Date: November 8, 2021
THIS COMMON STOCK
PURCHASE WARRANT (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on November 9, 2026
(the “Termination Date”) but not thereafter, to subscribe for and purchase from Stran & Company, Inc., a Nevada
corporation (the “Company”), up to shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section
2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust
Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.
Section 1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per share so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Board of Directors”
means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are
open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission. “Common Stock” means the common stock of the Company,
par value $0.0001 per share, and any other class of securities into which such securities may hereafter be
reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (i) shares of Common Stock or options to employees, officers or directors of the Company
or consultants to the Company pursuant to any stock or option plan or other written agreement duly adopted for such purpose, by a
majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors
established for such purpose for services rendered to the Company, provided, however, such issuance (A) shall not exceed fifteen
percent (15%) of the Common Stock issued and outstanding as of the date hereof, (B) shall be at no less than fair market value (as
measured by the closing price of the Common Stock on the Trading Market on the date of issuance) and (C) in the first year from the
date hereof shall be issued as restricted securities; (ii) securities upon the exercise or exchange of or conversion of any
securities exercisable or exchangeable for or convertible into Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to
decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or
combinations) or to extend the term of such securities; (iii) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company or securities issued in financing transactions, the primary
purpose of which is to finance acquisitions or strategic transactions approved by a majority of the disinterested directors of the
Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no
registration rights that require or permit the filing of any registration statement in connection therewith, and provided that any
such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an
operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in
securities; (iv) shares of Common Stock, options or convertible securities issued to banks, equipment lessors or other financial
institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction
approved by a majority of the disinterested directors of the Company but shall not include a transaction in which the company is
primarily issuing Common Stock or Common Stock Equivalents primarily for the purpose of raising capital or to a person or an entity
whose primary business is investing in securities; (v) shares of Common Stock, options or convertible securities issued in
connection with the provision of goods or services pursuant to transactions approved by a majority of the disinterested directors of
the Company but shall not include a transaction in which the company is issuing Common Stock or Common Stock Equivalents primarily
for the purpose of raising capital or to a person or an entity whose primary business is investing in securities; and
(vi) shares of Common Stock, options or convertible securities issued in connection with
sponsored research, collaboration, technology license, development, investor or public relations, marketing or other similar
agreements or strategic partnerships approved by a majority of the disinterested directors of the Company but shall not include a
transaction in which the Company is primarily issuing Common Stock or Common Stock Equivalents primarily for the purpose of raising
capital or to a person or an entity whose primary business is investing in securities.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Registration
Statement” means the Company’s registration statement on Form S- 1, as amended (File No.333-260109).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, or OTCQB or OTCQX (or any successors to any of the foregoing).
“Transfer
Agent” means Vstock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place,
Woodmere, NY 11598 and a facsimile number of , and any successor transfer agent of the Company.
“Underwriting
Agreement” means the underwriting agreement, dated as of 2021, among the Company and EF Hutton, division of Benchmark
Investments, LLC, as representative of the underwriters named therein, as amended, modified or supplemented from time to time in
accordance with its terms.
“Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the Common
Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into,
or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue
securities at a future determined price.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the Company.
“Warrant
Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company
and the Warrant Agent.
“Warrant
Agent” means the Transfer Agent and any successor warrant agent of the Company.
“Warrants” means this
Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section 2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy
or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise
be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in
which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the
number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
Notwithstanding the foregoing in this
Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book-entry
form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant to this
Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying
with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable), subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.
b) Exercise
Price. The exercise price per Warrant Share under this Warrant shall be $5.1875, subject to adjustment hereunder (the
“Exercise Price”), provided that in no case shall the exercise price be less than the par value of the Common
Stock. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price
under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the
Termination Date.
c) Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in
part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option
of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of
the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours
after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the
date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is
both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading
Day;
(B) = the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) = the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.
Notwithstanding anything herein to
the contrary, but without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
this Section 2(c) or to receive cash payments pursuant to Section 3(d)(i) and Section 3(d)(iv) herein, the Company shall not be
required to make any cash payments or net cash settlement to the Holder in lieu of delivery of the Warrant Shares. If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities
Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take
any position contrary to this Section 2(c). Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant
shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
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d)
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Mechanics of Exercise.
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i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit and Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the
aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date
until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant
in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any
Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at
any time after the time of execution of the Underwriting Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s)
by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date
for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received
by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of
Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the
amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise
to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder purchases Warrant Shares having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of Warrant Shares with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver Warrant Shares upon exercise of
the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole Warrant Share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in
the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto,
the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
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e)
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Holder’s Exercise Limitations.
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The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of
the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon
exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares
which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or
any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by
the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the
Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that
the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number
of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm
orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to
the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the
issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares
upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in
the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of
this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to
such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock and such other capital stock of the Company (excluding treasury
shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock
and such other capital stock of the Company (excluding treasury shares, if any) outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell,
enter into an agreement to sell, or grant any option to purchase, or sell, enter into an agreement to sell, or grant any right to reprice,
or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock
or Common Stock Equivalents, at an effective price per share less than the Exercise Price then in effect (such lower price, the “Base
Share Price” and such issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that if
the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which
are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is less
than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive
Issuance at such effective price), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance
the Exercise Price shall be reduced and only reduced to equal the Base Share Price provided that the Base Share Price shall not be less
than $ (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following the Initial Issuance
Date). Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3(b) in respect of an Exempt Issuance.
The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance or deemed issuance of any shares
of Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon the
occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price regardless
of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. If the Company enters into a Variable Rate
Transaction, the Company shall be deemed to have issued shares of Common Stock or Common Stock Equivalents at the lowest possible price,
conversion price or exercise price at which such securities may be issued, converted or exercised.
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or
sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record
holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent
shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of Warrant Shares acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent
that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares
of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the
benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion
of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
e)
Fundamental Transaction. If, at any time while this Warrant is outstanding,(i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding shares of
Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than
50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making
or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of capital stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one Warrant Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor
Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the
consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction),
purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of
the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however,
that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of
Directors, Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and
in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the
holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash,
stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms
of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are
not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received Common
Stock of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction.
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting
(A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100
day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day
immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such
calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash
consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading
Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental
Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining
option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination
Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds
(or such other consideration) within the later of (i) five (5) Business Days of the Holder’s election and (ii) the date of consummation
of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant
in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to
the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of
the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the Warrant Shares acquirable and receivable upon exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Warrant Shares pursuant to
such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right
and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor
Entity had been named as the Company herein.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the
sum of the number shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock are converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last
facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y)
the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close,
and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing
on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
h) Voluntary
Adjustment by Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term
of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant.
a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined
with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers
or exchanges shall be dated the Initial Issuance Date of this Warrant and shall be identical with this Warrant except as to the number
of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Warrant Agent and/or the Company (with regard to any portion of the Warrant in certificated form issued pursuant to
the terms of the Warrant Agency Agreement) shall register this Warrant, upon records to be maintained by the Warrant Agent and/or the
Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company
and the Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No
Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as
expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless
exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no
event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing
the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except and to the extent as waived
or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its articles of
incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder as set forth in this Warrant against impairment. Without limiting the generality of
the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii)
use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would
result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.
All questions concerning
the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that
all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether
brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party
shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding
shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any
material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
Any and all notices or other communications
or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered
personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 2 Heritage
Drive, Suite 600, Attention: Andrew Shape, Chief Executive Officer, email address: andyshape@stran.com, or such other facsimile number,
email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by
a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such
Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or
via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading
Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e- mail
at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any
Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder
constitutes, or contains, material, non- public information regarding the Company or any Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Warrant Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder or the beneficial owner of this Warrant, on the other hand.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
o) Warrant
Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject
to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency
Agreement, the provisions of this Warrant shall govern and be controlling.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has caused
this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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Stran & Company, Inc.
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By:
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Name:
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Title:
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EXHIBIT A
NOTICE OF EXERCISE
TO: STRAN & COMPANY, INC.
(1)
The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.
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(2)
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Payment shall take the form of (check applicable box):
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[ ] in lawful money of the United States;
or
[ ] if permitted the cancellation of
such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC
Account Number:
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
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Name:
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(Please Print)
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Address:
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(Please Print)
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Phone Number
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Email Address
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Dated: ,
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Holder’s Signature:
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Holder’s Address:
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EXHIBIT 2
Form of Warrant Certificate Request
Notice
WARRANT CERTIFICATE REQUEST NOTICE
To: Vstock Transfer, LLC, as Warrant Agent for Stran &
Company, Inc. (the “Company”)
The undersigned Holder of Common Stock
Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Warrant
Certificate evidencing the Warrants held by the Holder as specified below:
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1.
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Name of Holder of Warrants in form of Global Warrants:
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2.
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Name of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants):
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3.
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Number of Warrants in name of Holder in form of Global Warrants:
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4.
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Number of Warrants for which Warrant Certificate shall be issued:
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5.
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Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant
Certificate, if any:
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6.
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Warrant Certificate shall be delivered to the following address:
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The undersigned hereby acknowledges and
agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered
the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
EXHIBIT 3
Form of Global Warrants Request
Notice
GLOBAL WARRANTS REQUEST NOTICE
To: Vstock Transfer, LLC, as Warrant Agent for Stran &
Company, Inc. (the “Company”)
The undersigned Holder of Common Stock
Purchase Warrants (“Warrants”) in the form of Warrants Certificates issued by the Company hereby elects to receive
a Global Warrant evidencing the Warrants held by the Holder as specified below:
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1.
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Name of Holder of Warrants in form of Warrant Certificates:
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2.
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Name of Holder in Global Warrant (if different from name of Holder of Warrants in form of
Warrant Certificates):
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3.
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Number of Warrants in name of Holder in form of Warrant Certificates:
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4.
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Number of Warrants for which Global Warrant shall be issued:
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5.
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Number of Warrants in name of Holder in form of Warrant Certificates after issuance of
Global Warrant, if any:
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6.
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Global Warrant shall be delivered to the following address:
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The undersigned hereby acknowledges and
agrees that, in connection with this Global Warrant Exchange and the issuance of the Global Warrant, the Holder is deemed to have surrendered
the number of Warrants in form of Warrant Certificates in the name of the Holder equal to the number of Warrants evidenced by the Global
Warrant.
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
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