Exhibit 10.1
 
LOCK-UP LETTER AGREEMENT
 
 
May ____, 2019
 
ThinkEquity, a Division of
 
Fordham Financial Management, Inc.
 
17 State Street, 22nd Floor
 
New York, NY 10004
 
 
As Representative of the several Underwriters named on Schedule 1 to the
Underwriting Agreement referenced below
 
 
Ladies and Gentlemen:
 
The undersigned understands that you (the “Representative”) and potentially
certain other firms (the “Underwriters”) propose to enter into an Underwriting
Agreement (the “Underwriting Agreement”) providing for the purchase by the
Underwriters of securities (which will include shares of Common Stock, par value
$0.001 per share (the “Common Stock”), and may also include warrants to purchase
shares of Common Stock, of cbdMD, Inc. (formerly known as Level Brands, Inc.), a
North Carolina corporation (the “Company”), and that the Underwriters propose to
reoffer the Stock to the public (the “Offering”).
 
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of the
Representative, on behalf of the Underwriters, the undersigned will not,
directly or indirectly, (1) offer for sale, sell, pledge, or otherwise transfer
or dispose of (or enter into any transaction or device that is designed to, or
could be expected to, result in the transfer or disposition by any person at any
time in the future of) any shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock that may be issued
upon exercise of any options or warrants) or securities convertible into or
exercisable or exchangeable for Common Stock, (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks 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 Common Stock or other securities, in cash or otherwise, (3) except
as provided for below, make any demand for or exercise any right or cause to be
filed a registration statement, including any amendments thereto, with respect
to the registration of any shares of Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock or any other securities of the
Company, or (4) publicly disclose the intention to do any of the foregoing for a
period commencing on the date hereof and ending on the 90th day after the date
of the Prospectus relating to the Offering (such 90-day period, the “Lock-Up
Period”).
 
 
 

 
 
The foregoing paragraph shall not apply to (a) transactions relating to shares
of Common Stock or other securities acquired in the open market after the
completion of the Offering, provided that no filing under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall be
required or shall be voluntarily made in connection with such transfers; (b)
bona fide gifts of shares of any class of the Company’s capital stock or any
security convertible into Common Stock, in each case that are made exclusively
between and among the undersigned or members of the undersigned’s family, or
affiliates of the undersigned, including its partners (if a partnership) or
members (if a limited liability company); (c) any transfer of shares of Common
Stock or any security convertible into Common Stock by will or intestate
succession upon the death of the undersigned; (d) transfer of shares of Common
Stock or any security convertible into Common Stock to an immediate family
member (for purposes of this Lock-Up Letter Agreement, “immediate family” shall
mean any relationship by blood, marriage or adoption, not more remote than first
cousin) or any trust, limited partnership, limited liability company or other
entity for the direct or indirect benefit of the undersigned or any immediate
family member of the undersigned; provided that, in the case of clauses (b) -
(d) above, it shall be a condition to any such transfer that (i) the
transferee/donee agrees to be bound by the terms of this Lock-Up Letter
Agreement (including, without limitation, the restrictions set forth in the
preceding sentence) to the same extent as if the transferee/donee were a party
hereto, (ii) each party (donor, donee, transferor or transferee) shall not be
required by law (including without limitation the disclosure requirements of the
Securities Act of 1933, as amended, (the “Securities Act”) and the Exchange Act)
to make, and shall agree to not voluntarily make, any filing or public
announcement of the transfer or disposition prior to the expiration of the
90-day period referred to above, and (iii) the undersigned notifies the
Representative at least two business days prior to the proposed transfer or
disposition; (e) the transfer of shares to the Company to satisfy withholding
obligations for any equity award granted pursuant to the terms of the Company’s
stock option/incentive plans, such as upon exercise, vesting, lapse of
substantial risk of forfeiture, or other similar taxable event, in each case on
a “cashless” or “net exercise” basis (which, for the avoidance of doubt shall
not include “cashless” exercise programs involving a broker or other third
party), provided that as a condition of any transfer pursuant to this clause
(e), that if the undersigned is required to file a report under Section 16(a) of
the Exchange Act, reporting a reduction in beneficial ownership of shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock during the Lock-Up Period, the undersigned shall include a
statement in such report, and if applicable an appropriate disposition
transaction code, to the effect that such transfer is being made as a share
delivery or forfeiture in connection with a net value exercise, or as a
forfeiture or sale of shares solely to cover required tax withholding, as the
case may be; (f) transfers of shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock pursuant to a bona fide
third party tender offer made to all holders of the Common Stock, merger,
consolidation or other similar transaction involving a change of control (as
defined below) of the Company, including voting in favor of any such transaction
or taking any other action in connection with such transaction, provided that in
the event that such merger, tender offer or other transaction is not completed,
the Common Stock and any security convertible into or exercisable or
exchangeable for Common Stock shall remain subject to the restrictions set forth
herein; (g) the exercise of warrants or the exercise of stock options granted
pursuant to the Company’s stock option/incentive plans or otherwise outstanding
on the date hereof; provided, that the restrictions shall apply to shares of
Common Stock issued upon such exercise or conversion; (h) the establishment of
any contract, instruction or plan that satisfies all of the requirements of Rule
10b5-1 (a “Rule 10b5-1 Plan”) under the Exchange Act; provided, however, that no
sales of Common Stock or securities convertible into, or exchangeable or
exercisable for, Common Stock, shall be made pursuant to a Rule 10b5-1 Plan
prior to the expiration of the Lock-Up Period; provided further, that the
Company is not required to report the establishment of such Rule 10b5-1 Plan in
any public report or filing with the Commission under the Exchange Act during
the lock-up period and does not otherwise voluntarily effect any such public
filing or report regarding such Rule 10b5-1 Plan; and (i) any demands or
requests for, exercise any right with respect to, or take any action in
preparation of, the registration by the Company under the Securities Act of the
undersigned’s shares of Common Stock, provided that no transfer of the
undersigned’s shares of Common Stock registered pursuant to the exercise of any
such right and no registration statement shall be filed under the Securities Act
with respect to any of the undersigned’s shares of Common Stock during the
Lock-Up Period. For purposes of clause (f) above, “change of control” shall mean
the consummation of any bona fide third party tender offer, merger, purchase,
consolidation or other similar transaction the result of which is that any
“person” (as defined in Section 13(d)(3) of the Exchange Act), or group of
persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of
the Exchange Act) of a majority of total voting power of the voting stock of the
Company.
 
 
 
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              The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against
the transfer of the undersigned’s securities subject to this Lock-Up Letter
Agreement except in compliance with this Lock-Up Letter Agreement.
 
If the undersigned is an officer or director of the Company, (i) the undersigned
agrees that the foregoing restrictions shall be equally applicable to any shares
of Common Stock that the undersigned may purchase in the Offering; (ii) the
Representative agrees that, at least three (3) business days before the
effective date of any release or waiver of the foregoing restrictions in
connection with a transfer of securities subject to this Lock-Up Letter
Agreement, the Representative will notify the Company of the impending release
or waiver; and (iii) the Company has agreed in the Underwriting Agreement to
announce the impending release or waiver by press release through a major news
service at least two (2) business days before the effective date of the release
or waiver. Any release or waiver granted by the Representative hereunder to any
such officer or director shall only be effective two (2) business days after the
publication date of such press release. The provisions of this paragraph will
not apply if (a) the release or waiver is effected solely to permit a transfer
of securities subject to this Lock-Up Letter Agreement not for consideration and
(b) the transferee has agreed in writing to be bound by the same terms described
in this securities subject to this Lock-Up Letter Agreement to the extent and
for the duration that such terms remain in effect at the time of such transfer.
 
It is understood that, if the Company notifies the Underwriters that it does not
intend to proceed with the Offering, 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, the undersigned will be released
from its obligations under this Lock-Up Letter Agreement.
 
The undersigned understands that the Company and the Underwriters will proceed
with the Offering in reliance on this Lock-Up Letter Agreement.
 
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to an
Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
 
This Lock-Up Letter Agreement shall automatically terminate upon the earliest to
occur, if any, of (1) the termination of the Underwriting Agreement before the
sale of any securities to the Underwriters or (2) June 30, 2019, in the event
that the Underwriting Agreement has not been executed by that date.
 
The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Letter Agreement and that, upon
request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representative, successors and assigns of
the undersigned.
 
Very truly yours,
 
By: ______________________________
Name:
Title:
 
 
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