REED’S,
INC.
UNDERWRITING
AGREEMENT
6,725,000
Shares of Common Stock
February
15, 2019
Roth
Capital Partners, LLC
888
San Clemente Drive, Suite 400
Newport
Beach, CA 92660
Ladies
and Gentlemen:
Reed’s,
Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein,
to issue and sell to Roth Capital Partners, LLC (the “Underwriter”), an aggregate of 6,725,000 authorized but
unissued shares (the “Firm Shares”) of common stock, par value $0.0001 per share (the “Common Stock”),
of the Company. The Company also proposes to sell to the Underwriter, upon the terms and conditions set forth in Section 4 hereof,
up to an additional 1,008,750 shares of Common Stock (the “Option Shares”). The Firm Shares and the Option
Shares are hereinafter collectively referred to as the “Shares”.
The
Company and the Underwriter hereby confirm their agreement as follows:
1.
Registration Statement and Prospectus.
The
Company has prepared and filed with the Shares and Exchange Commission (the “Commission”) a registration statement
on Form S-3 (File No. 333-229105) under the Securities Act of 1933, as amended (the “Securities Act”), and
the rules and regulations (the “Rules and Regulations”) of the Commission thereunder relating to the Shares
and such amendments to such registration statement (including post effective amendments) as may have been required to the date
of this Agreement. Such registration statement, as amended (including any post effective amendments), has been declared effective
by the Commission. The registration statement, together with the amendments prior to the date of this Agreement, including the
information (if any) deemed to be a part of, or incorporated by reference into, the registration statement at the time of effectiveness
pursuant to Rule 430B under the Securities Act, or at such time as the case may be, is hereinafter referred to as the “Registration
Statement” and the related prospectus, dated February 8, 2019, included in the Registration Statement at the time the
Registration Statement first became effective is hereinafter called the “Base Prospectus”. If the Company has
filed or files an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462
Registration Statement”), then any reference herein to the term Registration Statement shall include such Rule 462 Registration
Statement.
The
Company is filing with the Commission pursuant to Rule 424 under the Securities Act a final prospectus supplement to the Base
Prospectus relating to the Shares. The final prospectus supplement as filed, along with the Base Prospectus, is hereinafter called
the “Final Prospectus.” The term “Preliminary Prospectus” means the Base Prospectus, together
with any preliminary prospectus supplement used or filed with the Commission pursuant to Rule 424 of the Rules and Regulations,
in the form provided to the Underwriter by the Company for use in connection with the offering of the Shares. Such Final Prospectus
and any Preliminary Prospectus in the form in which they shall be filed with the Commission pursuant to Rule 424(b) under the
Securities Act (including the Base Prospectus as so supplemented) is hereinafter called a “Prospectus.” Reference
made herein to the Base Prospectus, any Preliminary Prospectus or to the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein and any reference to any amendment or supplement to the Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any document filed under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and the rules and regulations of the Commissions thereunder, incorporated
by reference in such Preliminary Prospectus or the Prospectus, as the case may be. The term “Effective Date”
shall mean each date that the Registration Statement and any post-effective amendment or amendments thereto became or become effective.
The
Commission has not notified the Company of any objection to the use of form of Registration Statement or any post-effective amendment
thereto.
2.
Representations and Warranties of the Company Regarding the Offering.
(a)
The Company represents and warrants to, and agrees with, the Underwriter, as of the date hereof, as of the Closing Date (as defined
in Section 4(d) below) and as of each Option Closing Date (as defined in Section 4(b) below), as follows:
(i)
No Material Misstatements or Omissions. At each time of effectiveness, at the date hereof, at the Closing Date, and at
each Option Closing Date, if any, the Registration Statement and any post-effective amendment thereto complied or will comply
in all material respects with the requirements of the Securities Act and the Rules and Regulations and did not, does not, and
will not, as the case may be, contain any 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. The Time of Sale Disclosure Package (as defined in
Section 2(a)(iii)(A)(1) below) as of 8:00 a.m. (Eastern time) (the “Applicable Time”) on the date hereof, at
the Closing Date and on each Option Closing Date, if any, and the Final Prospectus, as amended or supplemented, as of its date,
at the time of filing pursuant to Rule 424(b) under the Securities Act, at the Closing Date and at each Option Closing Date, if
any, when considered together with the Time of Sale Disclosure Package, did not, does not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in
the two immediately preceding sentences shall not apply to statements in or omissions from the Registration Statement, the Time
of Sale Disclosure Package or any Prospectus in reliance upon, and in conformity with, written information furnished to the Company
by the Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f). The
Registration Statement contains all exhibits and schedules required to be filed by the Securities Act or the Rules and Regulations.
No order preventing or suspending the effectiveness or use of the Registration Statement or any Prospectus is in effect and no
proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened
by the Commission.
(ii)
Marketing Materials. The Company has not distributed any prospectus or other offering material in connection with the offering
and sale of the Shares other than the Time of Sale Disclosure Package and the roadshow or investor presentations delivered to
and approved by the Underwriter for use in connection with the marketing of the offering of the Shares (the “Marketing
Materials”).
(iii)
Accurate Disclosure. (A) The Company has provided a copy to the Underwriter of each Issuer Free Writing Prospectus (as
defined below) used in the sale of Shares. The Company has filed all Issuer Free Writing Prospectuses required to be so filed
with the Commission, and no order preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is in
effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated
or threatened by the Commission. When taken together with the rest of the Time of Sale Disclosure Package or the Final Prospectus,
no Issuer Free Writing Prospectus, as of its issue date and at all subsequent times though the completion of the public offer
and sale of Shares, has, does or will include (1) any untrue statement of a material fact or omission to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading,
or (2) information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or
the Final Prospectus. The representations and warranties set forth in the immediately preceding sentence shall not apply to statements
in or omissions from the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus in reliance
upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for use in the preparation
thereof, which written information is described in Section 7(f). As used in this paragraph and elsewhere in this Agreement:
(1)
“Time of Sale Disclosure Package” means the Base Prospectus, the Prospectus most recently filed with the Commission
before the time of this Agreement, including any preliminary prospectus supplement deemed to be a part thereof, each Issuer Free
Writing Prospectus, and the description of the transaction provided by the Underwriter included on Schedule II.
(2)
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule
433 under the Securities Act, relating to the Shares that (A) is required to be filed with the Commission by the Company, or (B)
is exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, 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) under the Securities Act.
(B)
At the time of filing of the Registration Statement and at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 under the Securities Act or an “excluded issuer” as defined in Rule 164 under
the Securities Act.
(C)
Each Issuer Free Writing Prospectus listed on Schedule III satisfied, as of its issue date and at all subsequent times
through the Prospectus Delivery Period (as defined below), all other conditions as may be applicable to its use as set forth in
Rules 164 and 433 under the Securities Act, including any legend, record-keeping or other requirements.
(iv)
Financial Statements. The financial statements of the Company, together with the related notes and schedules, included
or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus comply
in all material respects with the applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations
of the Commission thereunder, and fairly present the financial condition of the Company as of the dates indicated and the results
of operations and changes in cash flows for the periods therein specified in conformity with U.S. generally accepted accounting
principles (“GAAP”) consistently applied throughout the periods involved. No other financial statements or
schedules are required under the Securities Act, the Exchange Act, or the Rules and Regulations to be included or incorporated
by reference in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus.
(v)
Independent Accountants. To the Company’s knowledge, Weinberg & Company, P.A., which has expressed its opinion
with respect to the financial statements and schedules incorporated by reference as a part of the Registration Statement and incorporated
by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, is an independent registered
public accounting firm with respect to the Company within the meaning of the Securities Act and the Rules and Regulations.
(vi)
Accounting and Disclosure Controls. The Company maintains systems of “internal control over financial reporting”
(as defined under Rules 13a-15 and 15d-15 under the Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; (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; and (v) the interactive data in eXtensible Business
Reporting Language included or incorporated by references in the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus fairly present the information called for in all material respects and are prepared in accordance with the
Commission’s rules and guidelines applicable thereto. Since the date of the latest audited financial statements included
in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, there has been no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
The
Company maintains disclosure controls and procedures that have been designed to ensure that material information relating to the
Company and any subsidiaries is made known to the Company’s principal executive officer and principal financial officer
by others within those entities; and such disclosure controls and procedures are effective.
(vii)
Forward-Looking Statements. The Company had a reasonable basis for, and made in good faith, each “forward-looking
statement” (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) contained or incorporated
by reference in the Registration Statement, the Time of Sale Disclosure Package, the Final Prospectus or the Marketing Materials.
(viii)
Statistical and Marketing-Related Data. All statistical or market-related data included or incorporated by reference in
the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, or included in the Marketing Materials,
are based on or derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained
the written consent to the use of such data from such sources, to the extent required.
(ix)
Trading Market. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is approved for listing
on the NYSE American (the “NYSE American”). There is no action pending by the Company or, to the Company’s
knowledge, the NYSE American to delist the Common Stock from the NYSE American, nor has the Company received any notification
that the NYSE American is contemplating terminating such listing. When issued, the Shares will be listed on the NYSE American.
(x)
Absence of Manipulation. The Company has not taken, directly or indirectly, any action that is designed to or that has
constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares.
(xi)
Investment Company Act. The Company is not and, after giving effect to the offering and sale of the Shares and the application
of the net proceeds thereof, will not be an “investment company,” as such term is defined in the Investment Company
Act of 1940, as amended.
3.
Representations and Warranties Regarding the Company.
(a)
The Company represents and warrants to, and agrees with, the Underwriter, as of the date hereof, as of the Closing Date and as
of each Option Closing Date, as follows:
(i)
Good Standing. The Company has been duly organized and is validly existing as a corporation or other entity in good standing
under the laws of its jurisdiction of incorporation. The Company has the power and authority (corporate or otherwise) to own its
properties and conduct its business as currently being carried on and as described in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus, and is duly qualified to do business as a foreign corporation or other entity in good
standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification
necessary, except where the failure to so qualify would not have or be reasonably likely to result in a material adverse effect
upon the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company,
taken as a whole, or in its ability to perform its obligations under this Agreement (“Material Adverse Effect”).
The Company has no subsidiaries.
(ii)
Authorization. The Company has the power and authority to enter into this Agreement and to authorize, issue and sell the
Shares as contemplated by this Agreement. This Agreement has been duly authorized by the Company, and when executed and delivered
by the Company, and will constitute the valid, legal and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except
as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(iii)
Contracts. The execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated
will not (A) result in a breach or violation of any of the terms and provisions of, or constitute a default under, any law, order,
rule or regulation to which the Company is subject, or by which any property or asset of the Company is bound or affected, (B)
conflict with, result in any violation or breach of, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) (a “Default Acceleration Event”) of, any agreement, lease, credit
facility, debt, note, bond, mortgage, indenture or other instrument (the “Contracts”) or obligation or other
understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, except to
the extent that such conflict, default, or Default Acceleration Event not reasonably likely to result in a Material Adverse Effect,
or (C) result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Company’s
certificate of incorporation or by-laws.
(iv)
No Violations of Governing Documents. The Company is not in violation, breach or default under its certificate of incorporation,
by-laws or other equivalent organizational or governing documents.
(v)
Consents. No consents, approvals, orders, authorizations or filings are required on the part of the Company in connection
with the execution, delivery or performance of this Agreement and the issue and sale of the Shares, except (A) the registration
under the Securities Act of the Shares, which has been effected, (B) the necessary filings and approvals from the NYSE American
to list the Shares, (C) such consents, approvals, authorizations, registrations or qualifications as may be required under state
or foreign securities or Blue Sky laws and the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”)
in connection with the purchase and distribution of the Shares by the Underwriter, (D) such consents and approvals as have been
obtained and are in full force and effect, and (E) 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 Effect.
(vi)
Capitalization. The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus. All of the issued and outstanding shares of capital stock of the Company are duly
authorized and validly issued, fully paid and nonassessable, and have been issued in compliance with all applicable securities
laws, and conform to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus. Except for the issuances of options or restricted stock in the ordinary course of business, since the respective dates
as of which information is provided in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus,
the Company has not entered into or granted any convertible or exchangeable securities, options, warrants, agreements, contracts
or other rights in existence to purchase or acquire from the Company any shares of the capital stock of the Company. The Shares,
when issued and paid for as provided herein, will be duly authorized and validly issued, fully paid and nonassessable, will be
issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights and will
conform to the description of the capital stock of the Company contained in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus.
(vii)
Taxes. The Company has (a) filed all foreign, federal, state and local tax 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 and (b)
paid all taxes (as hereinafter defined) shown as due and payable on such returns that were filed and has paid all taxes imposed
on or assessed against the Company. The provisions for taxes payable, if any, shown on the financial statements included or incorporated
by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus 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. No issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns
or taxes asserted as due from the Company, and no waivers of statutes of limitation with respect to the returns or collection
of taxes have been given by or requested from 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.
(viii)
Material Change. Since the respective dates as of which information is given (including information incorporated by reference)
in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, (a) 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 (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants, upon the
conversion of outstanding shares of preferred stock or other convertible securities or the issuance of restricted stock awards
or restricted stock units under the Company’s existing stock awards plan, or any new grants thereof in the ordinary course
of business), (d) there has not been any material change in the Company’s long-term or short-term debt, and (e) there has
not been the occurrence of any Material Adverse Effect.
(ix)
Absence of Proceedings. There is not pending or, to the knowledge of the Company, threatened, any action, suit or proceeding
to which the Company is a party or of which any property or assets of the Company is the subject before or by any court or governmental
agency, authority or body, or any arbitrator or mediator, which is reasonably likely to result in a Material Adverse Effect
(x)
Permits. The Company holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders (“Permits”) of any governmental or self-regulatory agency, authority or body
required for the conduct of its business, and all such Permits are in full force and effect, in each case except where the failure
to hold, or comply with, any of them is not reasonably likely to result in a Material Adverse Effect or adversely affect the consummation
of the transactions contemplated by this Agreement.
(xi)
Good Title. The Company has good and marketable title to all property (whether real or personal) described in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus as being owned by them that are material to the business
of the Company, in each case free and clear of all liens, claims, security interests, other encumbrances or defects, except those
that are disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus and those that
are not reasonably likely to result in a Material Adverse Effect. The property held under lease by the Company is held by them
under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere
in any material respect with the conduct of the business of the Company.
(xii)
Intellectual Property. The Company owns or possesses or has valid right 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”) necessary for the conduct of the business of the Company as currently
carried on and as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. To the
knowledge of the Company, no action or use by the Company involves or gives rise to any infringement of, or license or similar
fees for, any Intellectual Property of others, except where such action, use, license or fee is not reasonably likely to result
in a Material Adverse Effect. The Company has not received any notice alleging any such infringement or fee. To the Company’s
knowledge, 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 the officers, directors or employees
of the Company, or, to the Company’s knowledge, otherwise in violation of the rights of any persons.
(xiii)
Employment Matters. There is (A) no unfair labor practice complaint pending against the Company, nor to the Company’s
knowledge, threatened against it, before the National Labor Relations Board, any state or local labor relation board or any foreign
labor relations board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement
is so pending against the Company or any of its subsidiaries, or, to the Company’s knowledge, threatened against it and
(B) no labor disturbance by the employees of the Company exists or, to the Company’s knowledge, is imminent, and the Company
is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers,
customers or contractors, that could reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect.
The Company is not aware that any key employee or significant group of employees of the Company plans to terminate employment
with the Company.
(xiv)
ERISA Compliance. No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”),
or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)) or “accumulated
funding deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred
or could reasonably be expected to occur with respect to any employee benefit plan of the Company which would reasonably be expected
to, singularly or in the aggregate, have a Material Adverse Effect. Each employee benefit plan of the Company is in compliance
in all material respects with applicable law, including ERISA and the Code. The Company and its subsidiaries have not incurred
and could not reasonably be expected to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal
from, any pension plan (as defined in ERISA). Each pension plan for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or by failure to
act, which could, singularly or in the aggregate, cause the loss of such qualification.
(xv)
Environmental Matters. 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 has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect.
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 has not had and would
not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect; 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.
(xvi)
SOX Compliance. The Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley
Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof.
(xvii)
Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any Governmental 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 knowledge of the Company, threatened. “Governmental Entity” shall be defined as
any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency (whether foreign
or domestic) having jurisdiction over the Company or any of their respective properties, assets or operations.
(xviii)
Foreign Corrupt Practices Act. Neither the Company nor any director or officer of the Company, nor, to the knowledge of
the Company, any employee, representative, agent, affiliate of the Company or any other person acting on behalf of the Company,
is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company
and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance
therewith.
(xix)
OFAC. Neither the Company nor any director or officer of the Company, nor, to the knowledge of the Company, any employee,
representative, agent or affiliate of the Company or any other person acting on behalf of the Company is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”);
and the Company will not directly or indirectly use the proceeds of the offering of the Shares contemplated hereby, or lend, contribute
or otherwise make available such proceeds to any person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(xx)
Insurance. The Company carries, or is covered by, insurance in such amounts and covering such risks as is adequate for
the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses in
similar industries.
(xxi)
Books and Records. The minute books of the Company have been made available to the Underwriter and counsel for the Underwriter,
and such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee)
and stockholders of the Company (or analogous governing bodies and interest holders, as applicable), and each of its subsidiaries
since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately
in all material respects reflect all transactions referred to in such minutes.
(xxii)
No Undisclosed Contracts. There is no Contract or document required by the Securities Act or by the Rules and Regulations
to be described in the Registration Statement, the Time of Sale Disclosure Package or in the Final Prospectus or to be filed as
an exhibit to the Registration Statement which is not so described or filed therein as required; and all descriptions of any such
Contracts or documents contained in the Registration Statement, the Time of Sale Disclosure Package and in the Final Prospectus
are accurate and complete descriptions of such documents in all material respects. Other than as described in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus, no such Contract has been suspended or terminated for
convenience or default by the Company or any of the other parties thereto, and neither the Company has received notice, and the
Company has no knowledge, of any such pending or threatened suspension or termination.
(xxiii)
No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company on the one hand,
and the directors, officers, stockholders (or analogous interest holders), customers or suppliers of the Company on the other
hand, which is required to be described in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus
and which is not so described.
(xxiv)
Insider Transactions. All transactions by the Company with office holders or control persons of the Company have been duly
approved by the board of directors of the Company, or duly appointed committees or officers thereof, if and to the extent required
under applicable law.
(xxv)
No Registration Rights. No person or entity has the right to require registration of shares of Common Stock or other securities
of the Company within 90 days of the date hereof because of the filing or effectiveness of the Registration Statement or otherwise,
except for persons and entities who have expressly waived such right in writing or who have been given timely and proper written
notice and have failed to exercise such right within the time or times required under the terms and conditions of such right.
Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, there are no
persons with registration rights or similar rights to have any securities registered by the Company or any of its subsidiaries
under the Securities Act.
(xxvi)
Continued Business. No supplier, customer, distributor or sales agent of the Company has notified the Company that it intends
to discontinue or decrease the rate of business done with the Company, except where such discontinuation or decrease has not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
(xxvii)
No Finder’s Fee. There are no claims, payments, issuances, arrangements or understandings for services in the nature
of a finder’s, consulting or origination fee with respect to the introduction of the Company to the Underwriter or the sale
of the Shares hereunder or any other arrangements, agreements, understandings, payments or issuances with respect to the Company
that may affect the Underwriter’s compensation, as determined by FINRA.
(xxviii)
No Fees. Except as disclosed to the Underwriter in writing, the Company has not made any direct or indirect payments (in
cash, securities or otherwise) to (i) any person, as a finder’s fee, investing fee or otherwise, in consideration of such
person raising capital for the Company or introducing to the Company persons who 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 12-month period prior to the date on which the initial Preliminary Prospectus was filed with the Commission (“Filing
Date”) or thereafter.
(xxix)
Proceeds. None of the net proceeds of the offering will be paid by the Company to any participating FINRA member or any
affiliate or associate of any participating FINRA member, except as specifically authorized herein.
(xxx)
No FINRA Affiliations. To the Company’s knowledge, no (i) officer or director of the Company, (ii) owner of 5% or
more of any class of the Company’s securities or (iii) owner of any amount of the Company’s unregistered securities
acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA
member. The Company will advise the Underwriter and counsel to the Underwriter if it becomes aware that any officer, director
of the Company or any owner of 5% or more of any class of the Company’s securities is or becomes an affiliate or associated
person of a FINRA member participating in the offering.
(xxxi)
No Financial Advisor. Other than the Underwriter, no person has the right to act as an underwriter or as a financial advisor
to the Company in connection with the transactions contemplated hereby.
(xxxii)
Certain Statements. The statements set forth in the Registration Statement, the Time of Sale Disclosure Package and the
Final Prospectus under the captions “Regulation,” insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair, and under the caption “Description of Common Stock and Preferred
Stock” insofar as they purport to constitute a summary of (i) the terms of the Company’s outstanding securities, (ii)
the terms of the Shares and (iii) the terms of the documents referred to therein, are accurate, complete and fair in all material
respects.
(xxxiii)
Prior Sales of Shares. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus, the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other than shares issued pursuant
to employee benefit plans, stock option plans or other employee compensation plans or pursuant to outstanding preferred stock,
options, rights or warrants or other outstanding convertible securities.
(b)
Any certificate signed by any officer of the Company and delivered to the Underwriter or to counsel for the Underwriter shall
be deemed a representation and warranty by the Company to the Underwriter as to the matters covered thereby.
4.
Purchase, Sale and Delivery of Shares.
(a)
On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to issue and sell the Firm Shares to the Underwriter, and the Underwriter agrees to purchase the
Firm Shares set forth opposite the name of the Underwriter in Schedule I hereto. The purchase price to be paid by the Underwriter
to the Company for each Firm Share shall be $1.953 per share.
(b)
The Company hereby grants to the Underwriter the option to purchase some or all of the Option Shares and, upon the basis of the
warranties and representations and subject to the terms and conditions herein set forth, the Underwriter shall have the right
to purchase at the purchase price set forth in Section 4(a) all or any portion of the Option Shares as may be necessary to cover
over-allotments made in connection with the transactions contemplated hereby. The purchase price to be paid by the Underwriter
for the Option Shares shall be $1.953 per share. This option may be exercised by the Underwriter at any time and from time to
time on or before the forty-fifth (45th) day following the date hereof, by written notice to the Company (the “Option
Notice”). The Option Notice shall set forth the aggregate number of Option Shares as to which the option is being exercised,
and the date and time when the Option Shares are to be delivered (such date and time being herein referred to as the “Option
Closing Date”); provided, however, that the Option Closing Date shall not be earlier than the Closing
Date (as defined below) nor earlier than the first business day after the date on which the option shall have been exercised nor
later than the fifth business day after the date on which the option shall have been exercised unless the Company and the Underwriter
otherwise agrees. If the Underwriter elects to purchase less than all of the Option Shares, the Company agrees to sell to the
Underwriter the number of Option Shares obtained by multiplying the number of Option Shares specified in such notice by a fraction,
the numerator of which is the number of Option Shares, as applicable, set forth opposite the name of the Underwriter in Schedule
I hereto under the caption “Number of Option Shares to be Sold” and the denominator of which is the total number
of Option Shares.
(c)
Payment of the purchase price for and delivery of the Option Shares shall be made on an Option Closing Date in the same manner
and at the same office as the payment for the Firm Shares as set forth in subparagraph (d) below.
(d)
The Firm Shares will be delivered by the Company to the Underwriter against payment of the purchase price therefor by wire transfer
of same day funds payable to the order of the Company at the offices of Roth Capital Partners, LLC, 888 San Clemente Drive, Suite
400, Newport Beach, CA 92660, or such other location as may be mutually acceptable, at 6:00 a.m. Pacific Time, on the date specified
for regular way settlement in Rule 15c6-1(a) under the Exchange Act (or if the Firm Shares are priced after 4:30 p.m. Eastern
time, the date specified therein), or at such other time and date as the Underwriter and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act, or, in the case of the Option Shares, at such date and time set forth in the Option Notice.
The time and date of delivery of the Firm Shares is referred to herein as the “Closing Date.” On the Closing
Date, the Company shall deliver the Firm Shares, which shall be registered in the name or names and shall be in such denominations
as the Underwriter may request at least one (1) business day before the Closing Date, to the account of the Underwriter, which
delivery shall with respect to the Firm Shares, be made through the facilities of the Depository Trust Company’s DWAC system.
5.
Covenants.
(a)
The Company covenants and agrees with the Underwriter as follows:
(i)
The Company shall prepare the Final Prospectus in a form approved by the Underwriter and file such Final Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following
the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by the Rules and Regulations.
(ii)
During the period beginning on the date hereof and ending on the later of the Closing Date or such date as determined by the Underwriter
the Final Prospectus is no longer required by law to be delivered in connection with sales by an underwriter or dealer (the “Prospectus
Delivery Period”), prior to amending or supplementing the Registration Statement, including any Rule 462 Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company shall furnish to the Underwriter for review
and comment a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or
supplement to which the Underwriter reasonably objects.
(iii)
From the date of this Agreement until the end of the Prospectus Delivery Period, the Company shall promptly advise the Underwriter
in writing (A) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission,
(B) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement
to the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that
any post-effective amendment to the Registration Statement becomes effective and (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending its use or the
use of the Time of Sale Disclosure Package, the Final Prospectus or any Issuer Free Writing Prospectus, or of any proceedings
to remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed
for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes.
If the Commission shall enter any such stop order at any time during the Prospectus Delivery Period, the Company will use its
reasonable efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b) or 430C, as applicable, under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the
Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).
(iv)
(A) During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act,
as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, as now
and hereafter amended, so far as necessary to permit the continuance of sales of or dealings in the Shares as contemplated by
the provisions hereof, the Time of Sale Disclosure Package, the Registration Statement and the Final Prospectus. If during the
Prospectus Delivery Period any event occurs the result of which would cause the Final Prospectus (or if the Final Prospectus is
not yet available to prospective purchasers, the Time of Sale Disclosure Package) to include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing,
not misleading, or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Underwriter
or counsel to the Underwriter to amend the Registration Statement or supplement the Final Prospectus (or if the Final Prospectus
is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to comply with the Securities Act, or to
file under the Exchange Act any document that would be deemed to be incorporated by reference in the Final Prospectus in order
to comply with the Securities Act or the Exchange Act, the Company will promptly notify the Underwriter, allow the Underwriter
the opportunity to provide reasonable comments on such amendment, prospectus supplement or document, and will amend the Registration
Statement or supplement the Final Prospectus (or if the Final Prospectus is not yet available to prospective purchasers, the Time
of Sale Disclosure Package) or file such document (at the expense of the Company) so as to correct such statement or omission
or effect such compliance.
(B)
If at any time during the Prospectus Delivery Period there occurred or occurs an event or development the result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or any
Prospectus or included or would include, when taken together with the Time of Sale Disclosure Package, 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 prevailing at that subsequent time, not misleading, the Company will promptly notify the Underwriter and
will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict,
untrue statement or omission.
(v)
The Company shall take or cause to be taken all necessary action to qualify the Shares for sale under the securities laws of such
jurisdictions as the Underwriter reasonably designates and to continue such qualifications in effect so long as required for the
distribution of the Shares, except that the Company shall not be required in connection therewith to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process
in any state or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.
(vi)
The Company will furnish to the Underwriter and counsel to the Underwriter copies of the Registration Statement, each Prospectus,
any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon as available and
in such quantities as the Underwriter may from time to time reasonably request.
(vii)
The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months
after the end of the Company’s current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month
period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(viii)
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay
or cause to be paid (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriter of the Shares (including all fees and expenses of the registrar and transfer agent of the
Shares, and the cost of preparing and printing stock certificates), (B) all expenses and fees (including, without limitation,
fees and expenses of the Company’s counsel) in connection with the preparation, printing, filing, delivery, and shipping
of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits thereto),
the Shares, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, any Issuer Free Writing Prospectus and
any amendment thereof or supplement thereto, (C) all reasonable filing fees and reasonable fees and disbursements of the Underwriter’s
counsel incurred in connection with the qualification of the Shares for offering and sale by the Underwriter or by dealers under
the securities or blue sky laws of the states and other jurisdictions that the Underwriter shall designate, (D) the reasonable
filing fees and reasonable fees and disbursements of counsel to the Underwriter incident to any required review and approval by
FINRA, of the terms of the sale of the Shares, (F) listing fees, if any, and (G) all other costs and expenses incident to the
performance of its obligations hereunder that are not otherwise specifically provided for herein. The Company will reimburse the
Underwriter for the Underwriter’s reasonable out-of-pocket expenses, including legal fees and disbursements, in connection
with the purchase and sale of the Shares contemplated hereby up to an aggregate of $75,000 (including amounts payable pursuant
to clauses (C) and (D) above); without the Company’s prior written consent, such consent not to be unreasonably withheld
or delayed. If this Agreement is terminated by the Underwriter in accordance with the provisions of Section 6 or Section 7 or
Section 9, the Company will reimburse the Underwriter for all out-of-pocket disbursements (including, but not limited to, reasonable
fees and disbursements of counsel, travel expenses, postage, facsimile and telephone charges) incurred by the Underwriter in connection
with their investigation, preparing to market and marketing the Shares or in contemplation of their obligations hereunder.
(ix)
The Company intends to apply the net proceeds from the sale of the Shares to be sold by it hereunder for the purposes set forth
in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus under the heading “Use of Proceeds”.
(x)
The Company has not taken and will not take, directly or indirectly, during the Prospectus Delivery Period, any action designed
to or which might reasonably be expected to cause or result in, or that has constituted, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the Shares.
(xi)
The Company represents and agrees that, unless it obtains the prior written consent of the Underwriter, and the Underwriter represents
and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating
to the Shares that would constitute an Issuer Free Writing Prospectus; provided that the prior written consent of the parties
hereto shall be deemed to have been given in respect of the free writing prospectuses included in Schedule II. Any such
free writing prospectus consented to by the Company and the Underwriter is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated or agrees that it will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied or will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required,
legending and record-keeping.
(xii)
The Company hereby agrees that, without the prior written consent of the Underwriter, it will not, during the period ending ninety
(90) days after the date hereof (“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to sell, purchase,
contract to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock; or (ii) 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 Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise;
or (iii) file any registration statement with the Commission relating to the offering of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock. The restrictions contained in the preceding sentence shall not
apply to (1) the Shares to be sold hereunder, (2) the issuance of Common Stock upon the exercise of options or warrants or the
conversion of outstanding preferred stock or other outstanding convertible securities disclosed as outstanding in the Registration
Statement (excluding exhibits thereto), the Time of Sale Disclosure Package, and the Final Prospectus, or (3) the issuance of
employee stock options not exercisable during the Lock-Up Period and the grant of restricted stock awards or restricted stock
units or shares of Common Stock pursuant to equity incentive plans described in the Registration Statement (excluding exhibits
thereto), the Time of Sale Disclosure Package, and the Final Prospectus.
(xiii)
The Company hereby agrees, during a period of three years from the effective date of the Registration Statement, to furnish to
the Underwriter copies of all reports or other communications (financial or other) furnished to shareholders, and to deliver to
the Underwriter as soon as reasonably practicable upon availability, copies of any reports and financial statements furnished
to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed;
provided, that any information or documents available on the Commission’s Electronic Data Gathering, Analysis and Retrieval
System shall be considered furnished for purposes of this Section 5(a)(xiii).
(xiv)
The Company hereby agrees to engage and maintain, at its expense, a registrar and transfer agent for the Common Stock.
(xv)
The Company hereby agrees to use its reasonable best efforts to obtain approval to list the Shares on the NYSE American.
(xvi)
The Company hereby agrees not to take, directly or indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, under the Exchange Act or otherwise, the stabilization or manipulation of the price
of any securities of the Company to facilitate the sale or resale of the Shares.
6.
Conditions of the Underwriter’s Obligations. The obligations of the Underwriter hereunder
to purchase the Shares are subject to the accuracy, as of the date hereof and at all times through the Closing Date, and on each
Option Closing Date (as if made on the Closing Date or such Option Closing Date, as applicable), of and compliance with all representations,
warranties and agreements of the Company contained herein, the performance by the Company of its obligations hereunder and the
following additional conditions:
(a)
If filing of the Final Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required
under the Securities Act or the Rules and Regulations, the Company shall have filed the Final Prospectus (or such amendment or
supplement) or such Issuer Free Writing Prospectus with the Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or 164(b) under the Securities Act); the Registration Statement shall remain effective; no stop order
suspending the effectiveness of the Registration Statement or any part thereof, any Rule 462 Registration Statement, or any amendment
thereof, nor suspending or preventing the use of the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or
any Issuer Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall have been initiated
or threatened by the Commission; any request of the Commission or the Underwriter for additional information (to be included in
the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, any Issuer Free Writing
Prospectus or otherwise) shall have been complied with to the satisfaction of the Underwriter.
(b)
The Shares shall be approved for listing on the NYSE American.
(c)
FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(d) The
Underwriter shall not have reasonably determined, and advised the Company, that the Registration Statement, the Time of Sale
Disclosure Package, any Prospectus, the Final Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free
Writing Prospectus, contains an untrue statement of fact which, in the reasonable opinion of the Underwriter, is material, or
omits to state a fact which, in the reasonable opinion of the Underwriter, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e)
On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter, the opinion and negative
assurance letters of Libertas Law Group, Inc., counsel to the Company, each dated the Closing Date or the Option Closing Date,
as applicable, and addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter.
(f)
On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter, the opinion and negative
assurance letter of Trojan Law Offices, intellectual property counsel to the Company, dated the Closing Date or the Option Closing
Date, as applicable, and addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter.
(g)
On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter, the negative assurance
letter of Lowenstein Sandler LLP, counsel to the Underwriter, dated the Closing Date or the Option Closing Date, as applicable,
and addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter.
(h)
The Underwriter shall have received a letter of Weinberg & Company, P.A., on the date hereof and on the Closing Date and on
each Option Closing Date, addressed to the Underwriter, confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable requirements relating to the qualifications of accountants under
Rule 2-01 of Regulation S-X of the Commission, and confirming, as of the date of each such letter (or, with respect to matters
involving changes or developments since the respective dates as of which specified financial information is given in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus, as of a date not prior to the date hereof or more than
five days prior to the date of such letter), the conclusions and findings of said firm with respect to the financial information
and other matters required by the Underwriter.
(i)
On the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriter, a certificate, dated
the Closing Date and on each Option Closing Date and addressed to the Underwriter, signed by the chief executive officer and the
chief financial officer of the Company, in their capacity as officers of the Company, to the effect that:
(i)
The representations and warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material
Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this Agreement
are true and correct, in all material respects, as if made at and as of the Closing Date and on the Option Closing Date, and the
Company has complied with all the agreements and satisfied all the conditions on its part required to be performed or satisfied
at or prior to the Closing Date or on the Option Closing Date, as applicable;
(ii)
No stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof or any amendment
thereof, (B) suspending the qualification of the Shares for offering or sale, or (C) suspending or preventing the use of the Time
of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus, has been issued, and no
proceeding for that purpose has been instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory
body; and
(iii)
There has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect during the period
from and after the date of this Agreement and prior to the Closing Date or on the Option Closing Date, as applicable.
(j)
On or before the date hereof, the Underwriter shall have received duly executed lock-up agreements (each a “Lock-Up Agreement”)
in the form set forth on Exhibit A hereto, by and between the Underwriter and each of the parties specified in Schedule
IV.
(k)
The Company shall have furnished to the Underwriter and its counsel such additional documents, certificates and evidence as the
Underwriter or its counsel may have reasonably requested.
If
any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement may
be terminated by the Underwriter by notice to the Company at any time at or prior to the Closing Date or on the Option Closing
Date, as applicable, and such termination shall be without liability of any party to any other party, except that Section 5(a)(viii),
Section 7 and Section 9 shall survive any such termination and remain in full force and effect.
7.
Indemnification and Contribution.
(a)
The Company agrees to indemnify, defend and hold harmless the Underwriter, its affiliates, directors and officers and employees,
and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any losses, claims, damages or liabilities to which such party may become subject, under the
Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent
of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including
the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant
to Rule 430B of the Rules and Regulations, or arise out of or are based upon the omission from the Registration Statement, or
alleged omission to state therein, a material fact required to be stated therein or necessary to make the statements therein not
misleading (ii) an untrue statement or alleged untrue statement of a material fact contained in the Time of Sale Disclosure Package,
any Prospectus, the Final Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, or the Marketing
Materials or in any other materials used in connection with the offering of the Shares, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, (iii) in whole or in part, any inaccuracy in
the representations and warranties of the Company contained herein, or (iv) in whole or in part, any failure of the Company to
perform its obligations hereunder or under law, and will reimburse such party for any legal or other expenses reasonably incurred
by such party in connection with evaluating, investigating or defending against such loss, claim, damage, liability or action;
provided, however, that such indemnity shall not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Time of
Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or any Issuer Free Writing
Prospectus, in reliance upon and in conformity with written information furnished to the Company by the related Underwriter specifically
for use in the preparation thereof, which written information is described in Section 7(f).
(b)
The Underwriter will indemnify, defend and hold harmless the Company, its directors and each officer of the Company who signs
the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which such party may become
subject, under the Securities Act or otherwise (including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or
any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration
Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or
any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by such
Underwriter specifically for use in the preparation thereof, which written information is described in Section 7(f), and will
reimburse such party for any legal or other expenses reasonably incurred by such party in connection with evaluating, investigating,
and defending against any such loss, claim, damage, liability or action. The obligation of the Underwriter to indemnify the Company
(including any controlling person, director or officer thereof) shall be limited to the amount of the underwriting discount applicable
to the Shares to be purchased by the Underwriter hereunder actually received by the Underwriter.
(c)
Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not
relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent such indemnifying
party has been materially prejudiced by such failure. In case any such action shall be brought against any indemnified party,
and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified
party of the indemnifying party’s election so to assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof; provided, however, that if (i) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (ii) a conflict or potential conflict exists (based on advice
of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of the indemnified party), or (iii) the indemnifying
party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within
a reasonable time after receiving notice of the commencement of the action, the indemnified party shall have the right to employ
a single counsel to represent it in any claim in respect of which indemnity may be sought under subsection (a) or (b) of this
Section 7, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to the indemnified party as incurred.
The
indemnifying party under this Section 7 shall not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party
is a party or could be named and indemnity was or would be sought hereunder by such indemnified party, unless such settlement,
compromise or consent (a) includes an unconditional release of such indemnified party from all liability for claims that are the
subject matter of such action, suit or proceeding and (b) does not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of any indemnified party.
(d)
If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other from
the offering and sale of the Shares 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 Underwriter on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discount received
by the Underwriter, in each case as set forth in the table on the cover page of the Final Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the Company or the Underwriter and the parties’
relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriter agree that it would not be just and equitable if contributions pursuant to this subsection (d) were
to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim
that is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required
to contribute any amount in excess of the amount of the of the underwriting discount applicable to the Shares to be purchased
by such Underwriter hereunder actually received by such Underwriter. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e)
The obligations of the Company under this Section 7 shall be in addition to any liability that the Company may otherwise have
and the benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of each
Underwriter under this Section 7 shall be in addition to any liability that each Underwriter may otherwise have and the benefits
of such obligations shall extend, upon the same terms and conditions, to the Company’s directors, the officers of the Company
signing the Registration Statement, and each person who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act.
(f)
For purposes of this Agreement, the Underwriter confirms, and the Company acknowledges, that there is no information concerning
such Underwriter furnished in writing to the Company by such Underwriter specifically for preparation of or inclusion in the Registration
Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus, other
than the statement set forth in the last paragraph on the cover page of the Prospectus, the marketing and legal names of each
Underwriter, and the statements set forth in the “Underwriting” section of the Registration Statement, the Time of
Sale Disclosure Package, and the Final Prospectus only insofar as such statements relate to the amount of selling concession and
re-allowance, if any, or to over-allotment, stabilization and related activities that may be undertaken by such Underwriter.
8.
Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company contained herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements
of the Underwriter and the Company contained in Section 5(a)(viii) and Section 7 hereof, shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the Underwriter or any controlling person thereof, or the Company,
its directors, the officers of the Company signing the Registration Statement, or any of its controlling persons, and shall survive
delivery of, and payment for, the Shares to and by the Underwriter hereunder.
9.
Termination of this Agreement.
(a)
The Underwriter shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any
time at or prior to the Closing Date or any Option Closing Date (as to the Option Shares to be purchased on such Option Closing
Date only), if in the discretion of the Underwriter, (i) there has occurred any material adverse change in the securities markets
or any event, act or occurrence that has materially disrupted, or in the opinion of the Underwriter, will in the future materially
disrupt, the securities markets or there shall be such a material adverse change in general financial, political or economic conditions
or the effect of international conditions on the financial markets in the United States is such as to make it, in the judgment
of the Underwriter, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares, (ii) trading
in the Company’s Common Stock shall have been suspended by the Commission or the NYSE American or trading in securities
generally on the Nasdaq Stock Market, the NYSE or the NYSE American shall have been suspended, (iii) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the Nasdaq Stock Market,
the NYSE or NYSE American, by such exchange or by order of the Commission or any other governmental authority having jurisdiction,
(iv) a banking moratorium shall have been declared by federal or state authorities, (v) there shall have occurred any attack on,
outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration by the United States of
a national emergency or war, any substantial change or development involving a prospective substantial change in United States
or other international political, financial or economic conditions or any other calamity or crisis, or (vi) the Company suffers
any loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by insurance, or (vii) in the
judgment of the Underwriter, there has been, since the time of execution of this Agreement or since the respective dates as of
which information is given in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus, any material
adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs
or business prospects of the Company, whether or not arising in the ordinary course of business. Any such termination shall be
without liability of any party to any other party except that the provisions of Section 5(a)(viii) and Section 7 hereof shall
at all times be effective and shall survive such termination.
(b)
If the Underwriter elects to terminate this Agreement as provided in this Section, the Company and the other Underwriter shall
be notified promptly by the Underwriter by telephone, confirmed by letter.
10.
Notices. Except as otherwise provided herein, all communications hereunder shall be in writing
and, if to the Underwriter, shall be mailed, delivered or telecopied to Roth Capital Partners, LLC, 888 San Clemente Drive, Suite
400, Newport Beach, CA 92660, telecopy number: (949) 720-7227, Attention: Managing Director; and if to the Company, shall be mailed,
delivered or telecopied to it at 201 Merritt 7 Corporate Park, Norwalk, Connecticut 06851, telecopy number: 203.496.8883, Attention:
Iris Snyder, Chief Financial Officer; or in each case to such other address as the person to be notified may have requested in
writing. Any party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
11.
Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns and the controlling persons, officers and directors
referred to in Section 7. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation
any legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained. The term “successors
and assigns” as herein used shall not include any purchaser, as such purchaser, of any of the Shares from the Underwriter.
12.
Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the Underwriter
has been retained solely to act as underwriter in connection with the sale of the Shares and that no fiduciary, advisory or agency
relationship between the Company and the Underwriter has been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Underwriter has advised or is advising the Company on other matters; (b) the price and
other terms of the Shares set forth in this Agreement were established by the Company following discussions and arms-length negotiations
with the Underwriter and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Underwriters and its affiliates
are engaged in a broad range of transactions that may involve interests that differ from those of the Company and that the Underwriter
has no obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship;
and (d) it has been advised that the Underwriter is acting, in respect of the transactions contemplated by this Agreement, solely
for the benefit of the Underwriter, and not on behalf of the Company.
13.
Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall
not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such
waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.
14.
Partial Unenforceability. The invalidity or unenforceability of any section, paragraph, clause
or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision.
15.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
16.
Submission to Jurisdiction. The Company irrevocably (a) submits to the jurisdiction of the
Supreme Court of the State of New York, Borough of Manhattan or the United States District Court for the Southern District of
New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions
contemplated by this Agreement, the Registration Statement, the Time of Sale Disclosure Package, any Prospectus and the Final
Prospectus (each a “Proceeding”), (b) agrees that all claims in respect of any Proceeding may be heard and
determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court
or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the
fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. THE COMPANY (ON BEHALF OF
ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, THE TIME OF SALE DISCLOSURE PACKAGE, ANY PROSPECTUS
AND THE FINAL PROSPECTUS.
17.
Counterparts. This Agreement may be executed and delivered (including by facsimile transmission
or electronic mail) in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.
[Signature
Page Follows]
Please
sign and return to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement between
the Company and the Underwriter in accordance with its terms.
| |
Very
truly yours, |
| |
|
|
| |
REED’S,
INC. |
| |
|
|
| |
By: |
/s/
Iris Snyder |
| |
Name: |
Iris
Snyder |
| |
Title: |
Chief
Financial Officer |
Confirmed
as of the date first above-mentioned
by
the Underwriter.
| ROTH
CAPITAL PARTNERS, LLC |
|
| |
|
| By: |
/s/
Aaron M. Gurewitz |
|
| Name: |
Aaron
M. Gurewitz |
|
| Title: |
Head
of Equity Capital Markets |
|
[Signature
page to Underwriting Agreement]
SCHEDULE
I
| Name | |
Number
of Firm Shares to be Purchased | | |
Number
of Option Shares to be Purchased | |
| Roth
Capital Partners, LLC | |
| 6,725,000 | | |
| 1,008,750 | |
| | |
| | | |
| | |
| Total | |
| 6,725,000 | | |
| 1,008,750 | |
SCHEDULE
II
Reed’s,
Inc.
6,725,000
Shares of Common Stock
Final
Term Sheet
| Issuer: |
Reed’s,
Inc. (the “Company”) |
| |
|
| Symbol: |
REED |
| |
|
Shares:
|
6,725,000
shares of common stock, par value $0.0001 per share (the “Common Stock”),
of the Company
|
| |
|
| Over-allotment
option: |
1,008,750
shares |
| |
|
| Public
offering price: |
$2.100
per share of Common Stock |
| |
|
| Underwriting
discount: |
$0.147
per share of Common Stock |
| |
|
| Expected
net proceeds: |
Approximately
$12.9 million ($14.9 million if the overallotment option is exercised in full) (after deducting the underwriting discount
and estimated offering expenses payable by the Company). |
| |
|
| Trade
date: |
February
15, 2019 |
| |
|
| Settlement
date: |
February
20, 2019 |
| |
|
| Underwriter: |
Roth
Capital Partners, LLC
|
SCHEDULE
III
Free
Writing Prospectus None.
None.
SCHEDULE
IV
List
of officers, directors and stockholders executing lock-up agreements
John
Bello (Chairman)
Daniel
J. Doherty III (Director)
James
Bass (Director)
Scott
Grossman (Director)
Lewis
Jaffe (Director)
Valentin
Stalowir (Director, CEO, President)
Christopher
J. Reed (CIO) (Director)
Iris
Snyder (CFO, Secretary)
Stefan
Freeman (COO)
Neal
Cohane (SVP Sales)
EXHIBIT
A
Form
of Lock-Up Agreement
Roth
Capital Partners, LLC
888
San Clemente Drive
Newport
Beach, CA 92660
Ladies
and Gentlemen:
The
undersigned understands that you, as the representative (the “Representative”) of the several underwriters named therein,
propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Reed’s, Inc., a Delaware
corporation (the “Company”), relating to a proposed offering of securities of the Company (the “Offering”)
including shares of the Common Stock, par value $0.0001 per share (the “Common Stock”) of the Company. Capitalized
terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.
In
consideration of the foregoing, and in order to induce you to participate the Offering, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Representative
(which consent may be withheld in its sole discretion), the undersigned will not, during the period (the “Lock-Up Period”)
beginning on the date hereof and ending on the date 90 days after the date of the final prospectus relating to the Offering (the
“Final Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, or file (or participate in the filing of) a registration statement with the Securities
and Exchange Commission in respect of, any shares of Common Stock or any securities convertible into or exercisable or exchangeable
for shares of Common Stock (including without limitation, shares of Common Stock which may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which
may be issued upon exercise of a stock option or warrant), (2) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of shares of Common Stock or such other securities, in cash or otherwise,
(3) make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for shares of Common Stock, or (4) publicly announce an intention to effect any
transaction specific in clause (1), (2) or (3) above.
Notwithstanding
the foregoing, the restrictions set forth in clause (1) and (2) above shall not apply to (a) transfers (i) as a bona fide gift
or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, or (ii)
to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the
trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer
shall not involve a disposition for value, (b) the acquisition or exercise of any stock option issued pursuant to the Company’s
existing stock option plan(s), including any exercise effected by the delivery of shares of Common Stock of the Company held by
the undersigned, or (c) the purchase or sale of the Company’s securities pursuant to a plan, contract or instruction that
satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof. For purposes of this
Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote
than first cousin.
The
foregoing restrictions are expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a sale or disposition of shares of Common Stock even if such securities
would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including without limitation any put option or put equivalent
position or call option or call equivalent position) with respect to any of the shares of Common Stock or with respect to any
security that includes, relates to, or derives any significant part of its value from such shares.
The
undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement.
All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors,
assigns, heirs or personal representatives of the undersigned.
The
undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar
or depositary against the transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing restrictions.
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, without regard to the
conflict of laws principles thereof. The undersigned irrevocably (i) submits to the jurisdiction of the Supreme Court of the State
of New York, Borough of Manhattan and the United States District Court for the Southern District of New York, for the purpose
of any suit, action, or other proceeding arising out of this Lock-Up Agreement (each a “Proceeding”), (ii) agrees
that all claims in respect of any Proceeding may be heard and determined in any such court, (iii) waives, to the fullest extent
permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (iv) agrees not to commence
any Proceeding other than in such courts, and (v) waives, to the fullest extent permitted by law, any claim that such Proceeding
is brought in an inconvenient forum.
[Signature
Page Follows]
[Signature
Page to Lock-Up Agreement]
