Document:

Exhibit 10.1

 

WORKHORSE
GROUP INC.

 

$25,000,000
SHARES

 

COMMON
STOCK

 

AT-THE-MARKET OFFERING
PROGRAM

SALES AGREEMENT

 

June
22, 2017

 

Cowen
and Company, LLC 

599
Lexington Avenue 

New
York, NY 10022

 

Ladies
and Gentlemen:

 

Workhorse
Group Inc. (the “Company”), confirms its agreement (this “Agreement”) with
Cowen and Company, LLC (“Cowen”), as follows:

 

1. Issuance
and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and
subject to the conditions set forth herein, it may issue and sell through Cowen, acting as agent and/or principal,
shares (the “Placement Shares”) of the Company’s common stock, par value $0.001 per share
(the “Common Stock”), having an aggregate offering price of up to $25,000,000. Notwithstanding
anything to the contrary contained herein, the parties hereto agree that compliance with the limitation set forth in this Section
1 on the number of shares of Common Stock issued and sold under this Agreement shall be the sole responsibility of the
Company, and Cowen shall have no obligation in connection with such compliance. The issuance and sale of Common Stock through
Cowen will be effected pursuant to the Registration Statement (as defined below) filed by the Company and declared effective
by the Securities and Exchange Commission (the “Commission”), although nothing in this Agreement
shall be construed as requiring the Company to use the Registration Statement (as defined below) to issue the Common
Stock.

 

     

     

    

 

The
Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the “Securities Act”), with the Commission a registration statement on Form
S-3 (File No. 333-213100), including a base prospectus, relating to certain securities, including the Common Stock, to be issued
from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance
with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the “Exchange Act”). The Company has prepared a prospectus supplement specifically relating to the Placement
Shares (the “Prospectus Supplement”) to the base prospectus included as part of such registration statement.
The Company has furnished to Cowen, for use by Cowen, copies of the prospectus included as part of such registration statement,
as supplemented by the Prospectus Supplement, relating to the Placement Shares. Except where the context otherwise requires, such
registration statement, as amended when it became effective, including all documents filed as part thereof or incorporated by
reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission
pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or
462(b) of the Securities Act, is herein called the “Registration Statement.” The base prospectus, including
all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with
the Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing prospectus,”
as defined in Rule 433 of the Securities Act regulations (“Rule 433”), relating to the Placement Shares
that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i),
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), is herein called the “Prospectus.” Any reference
herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include
the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include
the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to the Electronic Data Gathering Analysis and Retrieval
System (“EDGAR”).

 

2. Placements.
Each time that the Company wishes to issue and sell the Placement Shares hereunder (each, a
“Placement”), it will notify Cowen by email notice (or other method mutually agreed to in writing
by the parties) (a “Placement Notice”) containing the parameters in accordance with which it
desires the Placement Shares to be sold, which shall at a minimum include the number of Placement Shares to be issued, the
time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold in
any one Trading Day (as defined in Section 3) and any minimum price below which sales may not be made, a form of which
containing such minimum sales parameters necessary is attached hereto as Schedule 1. The Placement Notice shall
originate from any of the individuals from the Company set forth on Schedule 2 (with a copy to each of the
other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from Cowen set
forth on Schedule 2, as such Schedule 2 may be amended from time to time. The Placement Notice
shall be effective upon receipt by Cowen unless and until (i) in accordance with the notice requirements set forth in Section
4, Cowen declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the
Placement Shares have been sold, (iii) in accordance with the notice requirements set forth in Section 4, the Company
suspends or terminates the Placement Notice for any reason in its sole discretion, (iv) the Company issues a
subsequent Placement Notice with parameters superseding those on the earlier dated Placement Notice, or (v) this Agreement
has been terminated under the provisions of Section 11. The amount of any discount, commission or other
compensation to be paid by the Company to Cowen in connection with the sale of the Placement Shares shall be calculated in
accordance with the terms set forth in Schedule 3. It is expressly acknowledged and agreed that neither the
Company nor Cowen will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until
the Company delivers a Placement Notice to Cowen and Cowen does not decline such Placement Notice pursuant to the terms set
forth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms of this
Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.

 

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3.
Sale of Placement Shares by Cowen. Subject to the terms and conditions herein set forth, upon the Company’s delivery
of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise
terminated in accordance with the terms of this Agreement, Cowen, for the period specified in the Placement Notice, will use its
commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws,
rules and regulations and the rules of the Nasdaq Stock Market, Inc. (“Nasdaq”) to sell such Placement
Shares up to the amount specified in such Placement Notice, and otherwise in accordance with the terms of such Placement Notice.
Cowen will provide written confirmation to the Company (including by email correspondence to each of the individuals of the Company
set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice
is sent, other than via auto-reply) no later than the opening of the Trading Day (as defined below) immediately following the
Trading Day on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such
day, the volume-weighted average price of the Placement Shares sold, and the Net Proceeds (as defined below) payable to the Company.
Cowen may sell Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined
in Rule 415 of the Securities Act, including without limitation sales made through Nasdaq or on any other existing trading market
for the Common Stock. If expressly authorized by the Company in a Placement Notice, Cowen may also sell Placement Shares in negotiated
transactions. Notwithstanding the provisions of Section 6(ii), Cowen shall not purchase Placement Shares for its own account as
principal unless expressly authorized to do so by the Company in a Placement Notice. The Company acknowledges and agrees that
(i) there can be no assurance that Cowen will be successful in selling Placement Shares, and (ii) Cowen will incur no liability
or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure
by Cowen to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Placement
Shares as required under this Section 3. For the purposes hereof, “Trading Day” means any day
on which the Company’s Common Stock is purchased and sold on the principal market on which the Common Stock is listed or
quoted.

 

4.
Suspension of Sales.

 

(a) The
Company or Cowen may, upon notice to the other party in writing (including by email correspondence to each of the individuals
of the other party set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of
the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to each of the individuals of the other party set forth on Schedule 2), suspend
any sale of Placement Shares; provided, however, that such suspension shall not affect or impair either party’s obligations
with respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each of the parties agrees that no such
notice under this Section 4 shall be effective against the other unless it is made to one of the individuals named on Schedule
2 hereto, as such schedule may be amended from time to time.

 

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(b) Notwithstanding
any other provision of this Agreement, during any period in which the Company is in possession of material non-public information,
the Company and Cowen agree that (i) no sale of Placement Shares will take place, (ii) the Company shall not request the sale
of any Placement Shares, and (iii) Cowen shall not be obligated to sell or offer to sell any Placement Shares.

 

(c) If
either Cowen or the Company has reason to believe that the exemptive provisions set forth in Rule 101(c)(1) of Regulation M under
the Exchange Act are not satisfied with respect to the Common Stock, it shall promptly notify the other party, and Cowen may,
at its sole discretion, suspend sales of the Placement Shares under this Agreement.

 

(d) The
Registration Statement was declared effective on December 23, 2016. Notwithstanding any other provision of this Agreement, during
any period in which the Registration Statement is no longer effective under the Securities Act, the Company shall promptly notify
Cowen, the Company shall not request the sale of any Placement Shares, and Cowen shall not be obligated to sell or offer to sell
any Placement Shares.

 

5.
Settlement.

 

(a) Settlement
of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares
will occur on the third (3rd) Trading Day (or such earlier day as is industry practice for regular-way trading) following
the date on which such sales are made (each, a “Settlement Date” and the first such settlement date,
the “First Delivery Date”). The amount of proceeds to be delivered to the Company on a Settlement Date
against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate sales
price received by Cowen at which such Placement Shares were sold, after deduction for (i) Cowen’s commission, discount
or other compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due and
payable by the Company to Cowen hereunder pursuant to Section 7(g) (Expenses) hereof, and (iii) any transaction fees imposed
by any governmental or self-regulatory organization in respect of such sales.

 

(b) Delivery
of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically
transfer the Placement Shares being sold by crediting Cowen’s or its designee’s account (provided Cowen shall have
given the Company written notice of such designee prior to the Settlement Date) at The Depository Trust Company through its Deposit
and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which
in all cases shall be freely tradeable, transferable, registered shares in good deliverable form. On each Settlement Date, Cowen
will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement
Date. The Company agrees that if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver duly
authorized Placement Shares on a Settlement Date, the Company agrees that in addition to and in no way limiting the rights and
obligations set forth in Section 9(a) (Indemnification and Contribution) hereto, it will (i) hold Cowen harmless against
any loss, claim, damage, or reasonable and documented expense (including reasonable and documented legal fees and expenses), as
incurred, arising out of or in connection with such default by the Company and (ii) pay to Cowen any commission, discount, or
other compensation to which it would otherwise have been entitled absent such default.

 

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6.
Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, Cowen that as of
the date of this Agreement, each Representation Date (as defined in Section 7.(m.)), each date on which a Placement Notice is
given, and any date on which Placement Shares are sold hereunder:

 

(a) The
Registration Statement and any Rule 462(b) Registration Statement have been declared effective by the Commission under the
Securities Act. The Company has complied to the Commission’s satisfaction with all requests of the Commission for additional
or supplemental information. No stop order suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the best knowledge
of the Company, contemplated or threatened by the Commission. The Company meets the requirements for use of Form S-3 under the
Securities Act. The sale of the Placement Shares hereunder meets the requirements or General Instruction I.B.1. of Form S-3.

 

(b)
The Prospectus when filed complied and, as amended or supplemented, if applicable, will comply in all material respects
with the Securities Act. Each of the Registration Statement, any Rule 462(b) Registration Statement, the Prospectus and
any post-effective amendments or supplements thereto, at the time it became effective or its date, as applicable, complied
and as of each of the Settlement Dates, if any, complied in all material respects with the Securities Act and did not and, as
of each Settlement Date, if any, did 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 not misleading. The Prospectus, as
amended or supplemented, as of its date, did not and, as of each of the Settlement Dates, if any, will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information relating to Cowen furnished to the Company in
writing by Cowen expressly for use therein. There are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which have not been described or filed as
required.

 

(c) The
Company has delivered to Cowen one complete copy of the Registration Statement and a copy of each consent and certificate of experts
filed as a part thereof, and conformed copies of the Registration Statement (without exhibits) and the Prospectus, as amended
or supplemented, in such quantities and at such places as Cowen has reasonably requested.

 

(d) [Reserved]

 

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(e) The
Company currently is not an “ineligible issuer,” as defined in Rule 405 of the rules and regulation of the Commission.
The Company agrees to notify Cowen promptly upon the Company becoming an “ineligible issuer.”

 

(f) The
Company has not distributed and will not distribute, prior to the completion of Cowen’s distribution of the Placement Shares,
any offering material in connection with the offering and sale of the Placement Shares other than the Prospectus or the Registration
Statement.

 

(g) This
Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable
in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.

 

(h) The
Placement Shares, when issued and delivered, will be duly authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company against payment therefor pursuant to this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable.

 

(i) There
are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement, except for such rights as have been duly waived.

 

(j) Except
as otherwise disclosed in the Prospectus, subsequent to the respective dates as of which information is given in the Prospectus:
(i) there has been no material adverse change, or any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity (any
such change is called a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered
as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course
of business nor entered into any material transaction or agreement not in the ordinary course of business: and (iii) there
has been no dividend or distribution of any kind declared, paid or made by the Company or, except for regular quarterly dividends
publicly announced by the Company or dividends paid to the Company or other subsidiaries, by any of its subsidiaries on any class
of capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.

 

(k) Clark,
Schaefer, Hackett & Co. (the “Auditor”) whose reports are filed with the Commission as a part of the Registration
Statement and included in the Prospectus, are and, during the periods covered by their reports, were independent public accountants
as required by the Securities Act and the Rules.

 

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(l) The
financial statements of the Company (including all notes and schedules thereto) included in the Registration Statement and Prospectus
present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified;
and such financial statements and related schedules and notes thereto, and the unaudited financial information filed with the
Commission as part of the Registration Statement, have been prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved. The summary and selected financial data included in the Prospectus present
fairly the information shown therein as at the respective dates and for the respective periods specified and have been presented
on a basis consistent with the consolidated financial statements set forth in the Prospectus and other financial information.

 

(m)
The Company and each of its subsidiaries, including each entity (corporation, partnership, joint venture, association or
other business organization) owned or controlled directly or indirectly by the Company (each, a
“subsidiary”), is duly organized, validly existing and in good standing under the laws of their respective
jurisdictions of incorporation or organization and each such entity has all requisite power and authority to carry on its
business as is currently being conducted as described in the Prospectus, and to own, lease and operate its properties. All of
the issued shares of capital stock of, or other ownership interests in, each subsidiary have been duly and validly authorized
and issued and are fully paid and non-assessable and are owned, directly or indirectly, by the Company, free and clear of any
lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity, trust or other encumbrance,
preferential arrangement, defect or restriction of any kind whatsoever. The Company and each of its subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the
business conducted by it or location of the assets or properties owned, leased or licensed by it requires such qualification,
except for such jurisdictions where the failure to so qualify individually or in the aggregate would not have a Material
Adverse Change; and to the Company’s knowledge, no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. The Company does
not own, lease or license any asset or property or conduct any business outside the United States of America.

 

(n) The
Registration Statement initially became effective within three years of the date hereof. If, immediately prior to the third anniversary
of the initial effective date of the Registration Statement, any of the Placement Shares remain unsold by the Underwriters, the
Company will, prior to that third anniversary file, if it has not already done so, a new shelf registration statement relating
to the Placement Shares, in a form satisfactory to the Representatives, will use its best efforts to cause such registration statement
to be declared effective within 180 days after that third anniversary, and will take all other action necessary or appropriate
to permit the public offering and sale of the Placement Shares to continue as contemplated in the expired Registration Statement.
References herein to the registration statement relating to the Placement Shares shall include such new shelf registration statement.

 

(o) The Company and each of its subsidiaries has good and marketable title in fee simple to all real property, and good and marketable
title to all other property owned by it, in each case free and clear of all liens, encumbrances, claims, security interests and
defects, except such as do not materially affect the value of such property and do not materially interfere with the use made
or proposed to be made of such property by the Company and its subsidiaries and except as disclosed in the Prospectus. All property
held under lease by the Company and its subsidiaries is held by them under valid, existing and enforceable leases, free and clear
of all liens, encumbrances, claims, security interests and defects, except such as are not material and do not materially interfere
with the use made or proposed to be made of such property by the Company and its subsidiaries.

 

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(p)
Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (i)
there has not been any event which could have a Material Adverse Change; (ii) neither the Company nor any of its subsidiaries
has sustained any loss or interference with its assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court
or legislative or other governmental action, order or decree which could have a Material Adverse Change; and (iii) since the
date of the latest balance sheet included in the Registration Statement and the Prospectus, neither the Company nor its
subsidiaries has (A) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money,
except such liabilities or obligations incurred in the ordinary course of business, (B) entered into any transaction not in
the ordinary course of business or (C) declared or paid any dividend or made any distribution on any shares of its stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares of its capital stock. 

 

(q)
There is no document, contract or other agreement required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement which is not described or filed as required by the Securities
Act or Rules. Each description of a contract, document or other agreement in the Registration Statement or the
Prospectus accurately reflects in all respects the terms of the underlying contract, document or other agreement. Each
contract, document or other agreement described in the Registration Statement or the Prospectus or listed in the Exhibits to
the Registration Statement or incorporated by reference is in full force and effect and is valid and enforceable by and
against the Company or its subsidiary, as the case may be, in accordance with its terms, and the Company has no reason to
believe that any other party to any such contract or other agreement intends to terminate such contract or agreement in
the foreseeable future. Neither the Company nor any of its subsidiaries, if a subsidiary is a party, nor to the
Company’s knowledge, any other party is in default in the observance or performance of any term or obligation to be
performed by it under any such agreement, and no event has occurred which with notice or lapse of time or both would
constitute such a default, in any such case which default or event, individually or in the aggregate, would have a Material
Adverse Change. No default exists, and no event has occurred which with notice or lapse of time or both would constitute a
default, in the due performance and observance of any term, covenant or condition, by the Company or its subsidiary, if a
subsidiary is a party thereto, of any other agreement or instrument to which the Company or any of its subsidiaries is a
party or by which Company or its properties or business or a subsidiary or its properties or business may be bound or
affected which default or event, individually or in the aggregate, would have a Material Adverse Change.

 

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

 

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

 

(t)
 Neither the Company nor any subsidiary (i) is in violation of its certificate or articles of incorporation, by-laws, certificate
of formation, limited liability company agreement, partnership agreement or other organizational documents, (ii) is in default
under, and no event has occurred which, with notice or lapse of time, or both, would constitute a default under, or result in
the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity,
trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever, upon, any property or assets
of the Company or any subsidiary pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject
or (iii) is in violation of any statute, law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, foreign or domestic, except (in the case of clauses (ii) and (iii) above)
for violations or defaults that could not (individually or in the aggregate) reasonably be expected to have a Material Adverse
Change.

 

(u)
 The execution, delivery and performance of this Agreement by the Company or the consummation of any of the transactions contemplated
hereby or thereby (including, without limitation, the issuance and sale by the Company of the Placement Shares) will not give
rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default)
under, or require any consent or waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon
any properties or assets of the Company or its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its subsidiaries is a party or by which either the Company or its
subsidiaries or any of their properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute,
rule or regulation applicable to the Company or any of its subsidiaries or violate any provision of the charter or by-laws of
the Company or any of its subsidiaries, except for such consents or waivers which have already been obtained and are in full force
and effect.

 

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(v) 
 The Company has authorized and outstanding capital stock as set forth under the caption “Capitalization” in the
Prospectus. The certificates evidencing the Placement Shares are in due and proper legal form and have been duly authorized for
issuance by the Company. All of the issued and outstanding shares of Common Stock have been duly and validly issued and are fully
paid and nonassessable. There are no statutory preemptive or other similar rights to subscribe for or to purchase or acquire any
shares of Common Stock of the Company or any of its subsidiaries or any such rights pursuant to its Certificate of Incorporation
or by-laws or any agreement or instrument to or by which the Company or any of its subsidiaries is a party or bound. The Placement
Shares, when issued and sold pursuant to this Agreement will be duly and validly issued, fully paid and nonassessable and none
of them will be issued in violation of any preemptive or other similar right. Except as disclosed in the Registration Statement
and the Prospectus, there is no outstanding option, warrant or other right calling for the issuance of, and there is no commitment,
plan or arrangement to issue, any share of stock of the Company or any of its subsidiaries or any security convertible into, or
exercisable or exchangeable for, such stock. All grants of each option to acquire Common Stock (each, a “Company Stock
Option”) were validly issued and properly approved by the Board of Directors of the Company in material compliance with
all applicable laws and the terms of the plans under which such Company Stock Options were issued and were recorded on the Company
Financial Statements, including the SEC Documents, in accordance with GAAP, and no such grants involved any “back dating”,
“forward dating,” “spring loading” or similar practices with respect to the effective date of grant. The
Placement Shares conform in all material respects to all statements in relation thereto contained in the Registration Statement
and the Prospectus. All outstanding shares of capital stock of each of the Company’s subsidiaries have been duly authorized
and validly issued, and are fully paid and nonassessable and are owned directly by the Company or by another wholly-owned subsidiary
of the Company free and clear of any security interests, liens, encumbrances, equities or claims, other than those described in
the Prospectus.

 

(w) 
 No holder of any security of the Company has any right, which has not been waived, to have any security owned by such holder
included in the Registration Statement or to demand registration of any security owned by such holder for a period of 90 days
after the date of this Agreement.

 

(x) 
 There are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of
its subsidiaries could individually or in the aggregate have a Material Adverse Change; and, to the knowledge of the Company,
no such proceedings are threatened or contemplated by governmental authorities or threatened by others.

 

(y) 
 All necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance
of this Agreement and the issuance and sale of the Placement Shares by the Company.

 

(z) 
 Neither the Company nor any of its subsidiaries is involved in any labor dispute nor, to the knowledge of the Company, is
any such dispute threatened, which dispute would have a Material Adverse Change. The Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers or contractors which would have a Material Adverse Change.
The Company is not aware of any threatened or pending litigation between the Company or its subsidiaries and any of its executive
officers which, if adversely determined, could have a Material Adverse Change and has no reason to believe that such officers
will not remain in the employment of the Company.

 

    - 10 -

     

    

 

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

 

(bb)
The Company has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock or any security of the Company to facilitate the sale or
resale of any of the Placement Shares.

 

(cc)
The Company and each of its subsidiaries has filed all Federal, state, local and foreign tax returns which are required to be
filed through the date hereof, which returns are true and correct in all material respects or has received timely
extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent that the
same are material and have become due. There are no tax audits or investigations pending, which if adversely determined would
have a Material Adverse Change; nor are there any material proposed additional tax assessments against the Company or any of
its subsidiaries.

 

(dd)
The Placement Shares have been duly authorized for quotation on the National Association of Securities Dealers Automated
Quotation (“Nasdaq”) National Market System.

 

(ee) 
 The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or the quotation of the Common Stock on the Nasdaq National Market, nor has the Company received any notification
that the Commission or the Nasdaq National Market is contemplating terminating such registration or quotation.

 

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

 

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

 

    - 11 -

     

    

 

(hh)
 Based on the evaluation of its disclosure controls and procedures, the Company is not aware of (i) any material weakness or
significant deficiency in the design or operation of internal controls which could adversely affect the Company’s ability
to record, process, summarize and report financial data or any material weaknesses in internal controls; or (ii) any fraud, whether
or not material, that involves management or other employees who have a role in the Company’s internal controls.

 

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

 

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

 

(kk)
The Company’s Board of Directors has validly appointed an audit committee whose composition satisfies the
requirements of Rule 5605 of the NASDAQ Stock Market and the Board of Directors and/or the audit committee has adopted a
charter that satisfies the requirements of Rule 5605 of the NASDAQ Stock Market. The audit committee has reviewed the
adequacy of its charter within the past twelve months.

 

(ll)
There is and has been no failure on the part of the Company or any of its directors or officers, in their capacities as
such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley
Act”), any related rules and regulations promulgated by the Commission and corporate governance requirements under
applicable NASDAQ regulations, including, without limitation, Section 402 related to loans and Sections 302 and 906 related
to certifications.

 

(mm)
The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which they are engaged or propose to engage after giving
effect to the transactions described in the Prospectus; all policies of insurance and fidelity or surety bonds insuring the
Company or any of its subsidiaries or the Company’s or its subsidiaries’ respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and each of its subsidiaries are in compliance
with the terms of such policies and instruments in all material respects; and neither the Company nor any subsidiary of the
Company has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that is
not materially greater than the current cost. Neither the Company nor any of its subsidiaries has been denied any insurance
coverage which it has sought or for which it has applied.

 

    - 12 -

     

    

 

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

 

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

 

(pp) 
 The Company does not expect to be a Passive Foreign Investment Company (“PFIC”) within the meaning of Section
1297(a) of the United States Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder
for the year ending December 31, 2017, and has no plan or intention to conduct its business in a manner that would be reasonably
expected to result in the Company becoming a PFIC in the future under current laws and regulations.

 

(qq) 
 (i) Each of the Company and each of its subsidiaries is in compliance in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (“Environmental
Law”) which are applicable to its business; (ii) neither the Company nor its subsidiaries has received any notice from
any governmental authority or third party of an asserted claim under Environmental Laws; (iii) each of the Company and each of
its subsidiaries has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct
its business and is in compliance with all terms and conditions of any such permit, license or approval; (iv) to the Company’s
knowledge, no facts currently exist that will require the Company or any of its subsidiaries to make future material capital expenditures
to comply with Environmental Laws; and (v) no property which is or has been owned, leased or occupied by the Company or its subsidiaries
has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability Act of
1980, as amended (42 U.S.C. Section 9601, et. seq.) (“CERCLA”) or otherwise designated as a contaminated site
under applicable state or local law. Neither the Company nor any of its subsidiaries has been named as a “potentially responsible
party” under CERCLA.

 

(rr) 
 In the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of which the Company identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a Material Adverse Change.

 

    - 13 -

     

    

 

(ss) 
 Except as described in the Prospectus, the Company has not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, 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, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.

 

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

 

(uu) Neither
the Company nor any of its subsidiaries nor, to the Company’s knowledge, any director, officer, employee, agent, affiliate
or other person acting on behalf of the Company or any subsidiary has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government officials or employees, political parties or campaigns, political party officials, or candidates
for political office from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended, or any applicable anti-corruption laws, rules, or regulations of any other jurisdiction in which the
Company or any subsidiary conducts business; or (iv) made any other unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment to any person.

 

(vv) The
operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial
recordkeeping and reporting requirements, including those of the U.S. Bank Secrecy Act, as amended by Title III of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT
Act), and the applicable anti-money laundering statutes of jurisdictions where the Company and its subsidiaries conduct business,
the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced
by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency, authority, body or any arbitrator involving the Company or any of its
subsidiaries with respect to Anti-Money Laundering Laws is pending, or to the knowledge of the Company, threatened.

 

(ww) Compliance
with OFAC.

 

	 	(A)	Neither
    the Company nor any of its subsidiaries, nor any director, officer or employee thereof, nor to the Company’s knowledge,
    any agent, affiliate, representative, or other person acting on behalf of the Company or any of its subsidiaries, is an individual
    or entity (“Person”) that is, or is owned or controlled by a Person that is: (i) the subject of
    any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
    the United Nations Security Council (“UNSC”), the European Union (“EU”),
    Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”),
    nor (ii) located, organized, or resident in a country or territory that is the subject of a U.S. government embargo (including,
    without limitation, Cuba, Iran, North Kora, Sudan, Syria and the Crimea).

 

    - 14 -

     

    

 

	 	(B)	The
    Company will not, directly or indirectly, use the Net Proceeds, or lend, contribute or otherwise make available such Net Proceeds
    to any subsidiary, joint venture partner or other Person: (i) to fund or facilitate any activities or business of or with
    any Person that, at the time of such funding or facilitation, is the subject of Sanctions, or in any country or territory
    that, at the time of such funding or facilitation, is the subject of a U.S. government embargo; or (ii) in any other manner
    that will result in a violation of Sanctions by any Person (including Cowen)

 

	 	(C)	For
    the past five (5) years, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in,
    and will not engage in, any direct or indirect dealings or transactions with any Person that at the time of the dealing or
    transaction is or was the subject of Sanctions or any country or territory that, at the time of the dealing or transaction
    is or was the subject of a U.S. government embargo.

 

(xx) The
Company and its subsidiaries own or possess the valid right to use all (i) valid and enforceable patents, patent applications,
trademarks, trademark registrations, service marks, service mark registrations, Internet domain name registrations, copyrights,
copyright registrations, licenses, trade secret rights (“Intellectual Property Rights”) and (ii) inventions,
software, works of authorships, trademarks, service marks, trade names, databases, formulae, know how, Internet domain names and
other intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary confidential information,
systems, or procedures) (collectively, “Intellectual Property Assets”) necessary to conduct their respective
businesses as currently conducted, and as proposed to be conducted and described in the Prospectus. The Company and its subsidiaries
have not received any opinion from their legal counsel concluding that any activities of their respective businesses infringe,
misappropriate, or otherwise violate, valid and enforceable Intellectual Property Rights of any other person, and have not received
written notice of any challenge, which is to their knowledge still pending, by any other person to the rights of the Company and
its subsidiaries with respect to any Intellectual Property Rights or Intellectual Property Assets owned or used by the Company
or its subsidiaries. To the Company’s knowledge, the Company and its subsidiaries’ respective businesses as now conducted
do not give rise to any infringement of, any misappropriation of, or other violation of, any valid and enforceable Intellectual
Property Rights of any other person. All licenses for the use of the Intellectual Property Rights described in the Prospectus
are valid, binding upon, and enforceable by or against the parties thereto in accordance to its terms. The Company has complied
in all material respects with, and is not in breach nor has received any asserted or threatened claim of breach of any Intellectual
Property license, and the Company has no knowledge of any breach or anticipated breach by any other person to any Intellectual
Property license. Except as described in the Prospectus, no claim has been made against the Company alleging the infringement
by the Company of any patent, trademark, service mark, trade name, copyright, trade secret, license in or other intellectual property
right or franchise right of any person. The Company has taken all reasonable steps to protect, maintain and safeguard its Intellectual
Property Rights, including the execution of appropriate nondisclosure and confidentiality agreements. The consummation of the
transactions contemplated by this Agreement will not result in the loss or impairment of or payment of any additional amounts
with respect to, nor require the consent of any other person in respect of, the Company's right to own, use, or hold for use any
of the Intellectual Property Rights as owned, used or held for use in the conduct of the business as currently conducted.

 

    - 15 -

     

    

 

(yy) 
 The Company acknowledges and agrees that Cowen has informed the Company that Cowen may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell shares of Common Stock for its own account while this Agreement is in effect.

 

Any
certificate signed by an officer of the Company and delivered to Cowen or to counsel for Cowen shall be deemed to be a representation
and warranty by the Company to Cowen as to the matters set forth therein.

 

The
Company acknowledges that Cowen and, for purposes of the opinions to be delivered pursuant to Section 7 hereof, counsel
to the Company and counsel to Cowen, will rely upon the accuracy and truthfulness of the foregoing representations and hereby
consents to such reliance.

 

7.
Covenants of the Company. The Company covenants and agrees with Cowen that:

 

(a) Registration
Statement Amendments. After the date of this Agreement and during any period in which a Prospectus relating to any Placement
Shares is required to be delivered by Cowen under the Securities Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will notify Cowen promptly of the time when
any subsequent amendment to the Registration Statement, other than documents incorporated by reference, has been filed with the
Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and of any request by the
Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional information (in each
case, insofar as it relates to the transactions contemplated hereby), (ii) the Company will prepare and file with the Commission,
promptly upon Cowen’s request, any amendments or supplements to the Registration Statement or Prospectus that, in Cowen’s
reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by Cowen (provided,
however, that the failure of Cowen to make such request shall not relieve the Company of any obligation or liability hereunder,
or affect Cowen’s right to rely on the representations and warranties made by the Company in this Agreement and the Company
has no obligation to provide Cowen any advance copy of such filing or to provide Cowen an opportunity to object to such filing
if the filing does not name Cowen and does not relate in any way to the transactions contemplated by this Agreement); (iii) the
Company will not file any amendment or supplement to the Registration Statement or Prospectus, other than documents incorporated
by reference, relating to the Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been
submitted to Cowen within a reasonable period of time before the filing and Cowen has not reasonably objected thereto (provided,
however, that the failure of Cowen to make such objection shall not relieve the Company of any obligation or liability hereunder,
or affect Cowen’s right to rely on the representations and warranties made by the Company in this Agreement) and the Company
will furnish to Cowen at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference
into the Registration Statement or Prospectus, except for those documents available via EDGAR; (iv) the Company will cause each
amendment or supplement to the Prospectus, other than documents incorporated by reference, to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act; and (v) prior to the termination of this Agreement,
the Company will notify Cowen promptly if at any time the Registration Statement shall no longer be effective as a result of the
passage of time pursuant to Rule 415 under the Securities Act or otherwise.

 

    - 16 -

     

    

 

(b) Notice
of Commission Stop Orders. The Company will advise Cowen, promptly after it receives notice or obtains knowledge thereof,
of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent
the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued.

 

(c) Delivery
of Prospectus; Subsequent Changes. During any period in which a Prospectus relating to the Placement Shares is required to
be delivered by Cowen under the Securities Act with respect to a pending sale of the Placement Shares, (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will comply with all requirements
imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all
reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If during such period any event occurs as
a result of which the Prospectus as then amended or supplemented would 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 to amend or supplement the Registration Statement or Prospectus to comply with the Securities
Act, the Company will promptly notify Cowen to suspend the offering of Placement Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement
or omission or effect such compliance; provided, however, that the Company may delay any such amendment or supplement if,
as a result of a pending transaction or other development with respect to the Company in the reasonable judgment of the Company,
it is in the best interest of the Company to do so, provided that no Placement Notice is in effect during such time.

 

(d) Listing
of Placement Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered
by Cowen under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially reasonable
efforts to cause the Placement Shares to be listed on Nasdaq and to qualify the Placement Shares for sale under the securities
laws of such jurisdictions as Cowen reasonably designates and to continue such qualifications in effect so long as required for
the distribution of the Placement Shares; provided, however, that the Company shall not be required in connection therewith
to qualify as a foreign corporation or dealer in securities or file a general consent to service of process in any jurisdiction.

 

    - 17 -

     

    

 

(e) Delivery
of Registration Statement and Prospectus. The Company will furnish to Cowen and its counsel (at the expense of the Company)
copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments
and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus
relating to the Placement Shares is required to be delivered under the Securities Act (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable
and in such quantities as Cowen may from time to time reasonably request and, at Cowen’s request, will also furnish copies
of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that
the Company shall not be required to furnish any document (other than the Prospectus) to Cowen to the extent such document is
available on EDGAR.

 

(f) Earnings
Statement. 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 covering a 12-month period
that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act.

 

(g) Expenses.
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, in accordance
with the provisions of Section 11 hereunder, will pay the following expenses all incident to the performance of its obligations
hereunder, including, but not limited to, expenses relating to (i) the preparation, printing and filing of the Registration Statement
and each amendment and supplement thereto, of each Prospectus and of each amendment and supplement thereto, (ii) the preparation,
issuance and delivery of the Placement Shares, (iii) the qualification of the Placement Shares under securities laws in accordance
with the provisions of Section 7(d) of this Agreement, including filing fees (provided, however, that any fees or disbursements
of counsel for Cowen in connection therewith shall be paid by Cowen except as set forth in (vii) below), (iv) the printing and
delivery to Cowen of copies of the Prospectus and any amendments or supplements thereto, and of this Agreement, (v) the fees and
expenses incurred in connection with the listing or qualification of the Placement Shares for trading on Nasdaq, (vi) the filing
fees and expenses, if any, of the Commission, (vii) the filing fees and associated legal expenses of Cowen’s outside counsel
for filings with the FINRA Corporate Financing Department, such legal expense reimbursement not to exceed $10,000 and, (viii)
the reasonable fees and disbursements of Cowen’s counsel in an amount not to exceed $50,000, provided, however, in no
event shall the total compensation paid to Cowen exceed 8.0% of the gross proceeds to the Company from the sale of Placement Shares.

 

(h) Use
of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”

 

    - 18 -

     

    

 

(i) Notice
of Other Sales. During the pendency of any Placement Notice given hereunder, and for five (5) trading days following the termination
of any Placement Notice given hereunder, the Company shall provide Cowen notice as promptly as reasonably possible before it offers
to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any shares of Common Stock (other than Placement
Shares offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Stock,
warrants or any rights to purchase or acquire Common Stock; provided, that such notice shall not be required in connection
with the (i) issuance, grant or sale of Common Stock, options or warrants to purchase shares of Common Stock, restricted shares
of Common Stock, restricted stock units or other equity awards or Common Stock issuable upon the exercise of options or other
equity awards pursuant to the any stock option, stock bonus or other stock plan or arrangement described in the Prospectus, (ii)
the issuance of securities in connection with an acquisition, merger or sale or purchase of assets or (iii) the issuance or sale
of Common Stock pursuant to any dividend reinvestment plan that the Company may adopt from time to time provided the implementation
of such is disclosed to Cowen in advance or (iv) any shares of common stock issuable upon the exchange, conversion or redemption
of securities or the exercise of warrants, options or other rights in effect or outstanding.

 

(j) Change
of Circumstances. The Company will, at any time during a fiscal quarter in which the Company intends to tender a Placement
Notice or sell Placement Shares, advise Cowen promptly after it shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document provided
to Cowen pursuant to this Agreement.

 

(k) Due
Diligence Cooperation. During the term of this Agreement, the Company will cooperate with any reasonable due diligence review
conducted by Cowen or its agents in connection with the transactions contemplated hereby, including, without limitation, providing
information and making available documents and senior corporate officers, during regular business hours and at the Company’s
principal offices, as Cowen may reasonably request.

 

(l) Required
Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require
with respect to the Placement Shares, the Company will (i) file a prospectus supplement with the Commission under the applicable
paragraph of Rule 424(b) under the Securities Act (each and every filing under Rule 424(b), a “Filing Date”),
which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through Cowen, the
Net Proceeds to the Company and the compensation payable by the Company to Cowen with respect to such Placement Shares, and (ii)
deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected
as may be required by the rules or regulations of such exchange or market.

 

(m) Representation
Dates; Certificate. On or prior to the First Delivery Date and each time the Company (i) files the Prospectus relating to
the Placement Shares or amends or supplements the Registration Statement or the Prospectus relating to the Placement Shares (other
than a prospectus supplement filed in accordance with Section 7(l) of this Agreement) by means of a post-effective amendment,
sticker, or supplement but not by means of incorporation of document(s) by reference to the Registration Statement or the Prospectus
relating to the Placement Shares; (ii) files an annual report on Form 10-K under the Exchange Act; (iii) files its quarterly reports
on Form 10-Q under the Exchange Act; or (iv) files a report on Form 8-K containing amended financial information (other than an
earnings release) under the Exchange Act (each date of filing of one or more of the documents referred to in clauses (i) through
(iv) shall be a “Representation Date”); the Company shall furnish Cowen with a certificate, in the form
attached hereto as Exhibit 7(m) within three (3) Trading Days of any Representation Date if requested by Cowen. The requirement
to provide a certificate under this Section 7(m) shall be waived for any Representation Date occurring at a time at which no Placement
Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Placement Notice
hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date;
provided, however, that such waiver shall not apply for any Representation Date on which the Company files its annual
report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation
Date when the Company relied on such waiver and did not provide Cowen with a certificate under this Section 7(m), then
before the Company delivers the Placement Notice or Cowen sells any Placement Shares, the Company shall provide Cowen with a certificate,
in the form attached hereto as Exhibit 7(m), dated the date of the Placement Notice.

 

    - 19 -

     

    

 

(n) Legal
Opinion. On or prior to the First Delivery Date and within three (3) Trading Days of each Representation Date with respect
to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(m) for which no waiver
is applicable, the Company shall cause to be furnished to Cowen a written opinion of Fleming PLLC (“Company Counsel”),
or other counsel satisfactory to Cowen, in form and substance satisfactory to Cowen and its counsel, dated the date that the opinion
is required to be delivered, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended
or supplemented; provided, however, that in lieu of such opinions for subsequent Representation Dates, counsel may
furnish Cowen with a letter (a “Reliance Letter”) to the effect that Cowen may rely on a prior opinion
delivered under this Section 7(n) to the same extent as if it were dated the date of such letter (except that statements
in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented at
such Representation Date).

 

(o) Comfort
Letter. On or prior to the First Delivery Date and within three (3) Trading Days of each Representation Date with respect
to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(m) for which no waiver
is applicable, the Company shall cause its Auditor to furnish Cowen letters (the “Comfort Letters”),
dated the date the Comfort Letter is delivered, in form and substance satisfactory to Cowen, (i) confirming that they are an independent
registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) stating, as of such date, the conclusions
and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’
“comfort letters” to Cowen in connection with registered public offerings (the first such letter, the “Initial
Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would have been included
in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement
and the Prospectus, as amended and supplemented to the date of such letter.

 

(p) Market
Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes
or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Placement Shares or (ii) sell, bid for, or purchase the Common Stock to be issued and sold
pursuant to this Agreement, or pay anyone any compensation for soliciting purchases of the Placement Shares other than Cowen;
provided, however, that the Company may bid for and purchase shares of its common stock in accordance with Rule 10b-18 under the
Exchange Act.

 

    - 20 -

     

    

 

(q) Insurance.
The Company and its subsidiaries shall maintain, or cause to be maintained, insurance in such amounts and covering such risks
as is reasonable and customary for the business for which it is engaged.

 

(r) Compliance
with Laws. The Company and each of its subsidiaries shall maintain, or cause to be maintained, all material environmental
permits, licenses and other authorizations required by federal, state and local law in order to conduct their businesses as described
in the Prospectus, and the Company and each of its subsidiaries shall conduct their businesses, or cause their businesses to be
conducted, in substantial compliance with such permits, licenses and authorizations and with applicable environmental laws, except
where the failure to maintain or be in compliance with such permits, licenses and authorizations could not reasonably be expected
to result in a Material Adverse Change.

 

(s) Investment
Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor its subsidiaries
will be or become, at any time prior to the termination of this Agreement, an “investment company,” as such term is
defined in the Investment Company Act, assuming no change in the Commission’s current interpretation as to entities that
are not considered an investment company.

 

(t) Securities
Act and Exchange Act. The Company will use its best efforts to comply with all requirements imposed upon it by the Securities
Act and the Exchange Act as from time to time in force, so far as necessary to permit the continuance of sales of, or dealings
in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.

 

(u) No
Offer to Sell. Other than a free writing prospectus (as defined in Rule 405 under the Securities Act) approved in advance
by the Company and Cowen in its capacity as principal or agent hereunder, neither Cowen nor the Company (including its agents
and representatives, other than Cowen in its capacity as such) will make, use, prepare, authorize, approve or refer to any written
communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an
offer to sell or solicitation of an offer to buy Common Stock hereunder.

 

(v) Sarbanes-Oxley
Act. The Company and its subsidiaries will use their best efforts to comply with all effective applicable provisions of the
Sarbanes-Oxley Act.

 

8.
Conditions to Cowen’s Obligations. The obligations of Cowen hereunder with respect to a Placement will be subject
to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance
by the Company of its obligations hereunder, to the completion by Cowen of a due diligence review satisfactory to Cowen in its
reasonable judgment, and to the continuing satisfaction (or waiver by Cowen in its sole discretion) of the following additional
conditions:

 

(a) Registration
Statement Effective. The Registration Statement shall be effective and shall be available for (i) all sales of Placement Shares
issued pursuant to all prior Placement Notices and (ii) the sale of all Placement Shares contemplated to be issued by any Placement
Notice.

 

    - 21 -

     

    

 

(b) No
Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company or any of
its subsidiaries of any request for additional information from the Commission or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments
or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal
or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; or (iv) the occurrence of any event that makes any material statement made in the Registration
Statement or the Prospectus or any material document incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in the Registration Statement, related Prospectus or such documents
so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and,
that in the case of the Prospectus, it will not contain any materially untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

 

(c) No
Misstatement or Material Omission. Cowen shall not have advised the Company that the Registration Statement or Prospectus,
or any amendment or supplement thereto, contains an untrue statement of fact that in Cowen’s reasonable opinion is material,
or omits to state a fact that in Cowen’s opinion is material and is required to be stated therein or is necessary to make
the statements therein not misleading.

 

(d) Material
Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission,
there shall not have been any material adverse change, on a consolidated basis, in the authorized capital stock of the Company
or any Material Adverse Change or any development that could reasonably be expected to result in a Material Adverse Change, or
any downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset backed securities)
by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating
of any of the Company’s securities (other than asset backed securities), the effect of which, in the case of any such action
by a rating organization described above, in the reasonable judgment of Cowen (without relieving the Company of any obligation
or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of
the Placement Shares on the terms and in the manner contemplated in the Prospectus.

 

(e) Company
Counsel Legal Opinion. Cowen shall have received the opinions of Company Counsel required to be delivered pursuant to Section
7(n) on or before the date on which such delivery of such opinion is required pursuant to Section 7(n).

 

    - 22 -

     

    

 

(f) Cowen
Counsel Legal Opinion. Cowen shall have received from Proskauer Rose LLP, counsel for Cowen, such opinion or opinions, on
or before the date on which the delivery of the Company Counsel legal opinion is required pursuant to Section 7(n), with
respect to such matters as Cowen may reasonably require, and the Company shall have furnished to such counsel such documents as
they request for enabling them to pass upon such matters.

 

(g) Comfort
Letter. Cowen shall have received the Comfort Letter required to be delivered pursuant to Section 7(o) on or before
the date on which such delivery of such Comfort Letter is required pursuant to Section 7(o).

 

(h) Representation
Certificate. Cowen shall have received the certificate required to be delivered pursuant to Section 7(m) on or
before the date on which delivery of such certificate is required pursuant to Section 7(m).

 

(i) Secretary’s
Certificate. On or prior to the First Delivery Date, Cowen shall have received a certificate, signed on behalf of the Company
by its corporate Secretary, in form and substance satisfactory to Cowen and its counsel.

 

(j) No
Suspension. Trading in the Common Stock shall not have been suspended on Nasdaq.

 

(k) Other
Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(m), the Company
shall have furnished to Cowen such appropriate further information, certificates and documents as Cowen may have reasonably requested.
All such opinions, certificates, letters and other documents shall have been in compliance with the provisions hereof. The Company
will furnish Cowen with such conformed copies of such opinions, certificates, letters and other documents as Cowen shall have
reasonably requested.

 

(l) Securities
Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act with respect to the Placement
Shares to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time
period prescribed for such filing by Rule 424.

 

(m) Approval
for Listing. The Placement Shares shall either have been (i) approved for listing on Nasdaq, subject only to notice of issuance,
or (ii) the Company shall have filed an application for listing of the Placement Shares on Nasdaq at, or prior to, the issuance
of any Placement Notice.

 

(n) No
Termination Event. There shall not have occurred any event that would permit Cowen to terminate this Agreement pursuant to
Section 11(a).

 

    - 23 -

     

    

 

9.
Indemnification and Contribution.

 

(a) Company
Indemnification. The Company agrees to indemnify and hold harmless Cowen, the directors, officers, partners, employees and
agents of Cowen and each person, if any, who (i) controls Cowen within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, or (ii) is controlled by or is under common control with Cowen (a “Cowen Affiliate”)
from and against any and all losses, claims, liabilities, expenses and damages (including, but not limited to, any and all reasonable
investigative, legal and other expenses incurred in connection with, and any and all amounts paid in settlement (in accordance
with Section 9(c)) of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties
or between any indemnified party and any third party, or otherwise, or any claim asserted), as and when incurred, to which Cowen,
or any such person, may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based, directly
or indirectly, on (x) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement
or the Prospectus or any amendment or supplement to the Registration Statement or the Prospectus or in any free writing prospectus
or in any application or other document executed by or on behalf of the Company or based on written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the Common Stock under the securities laws thereof or filed
with the Commission, (y) the omission or alleged omission to state in any such document a material fact required to be stated
in it or necessary to make the statements in it not misleading or (z) any breach by any of the indemnifying parties of any of
their respective representations, warranties and agreements contained in this Agreement; provided, however, that
this indemnity agreement shall not apply to the extent that such loss, claim, liability, expense or damage arises from the sale
of the Placement Shares pursuant to this Agreement and is caused directly or indirectly by an untrue statement or omission made
in reliance upon and in conformity with the Agent’s Information. This indemnity agreement will be in addition to any liability
that the Company might otherwise have.

 

(b) Cowen
Indemnification. Cowen agrees to indemnify and hold harmless the Company and its directors and each officer of the Company
that signed the Registration Statement, and each person, if any, who (i) controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company
(a “Company Affiliate”) against any and all loss, liability, claim, damage and expense described in
the indemnity contained in Section 9(a), as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with the Agent’s Information.

 

    - 24 -

     

    

 

(c) Procedure.
Any party that proposes to assert the right to be indemnified under this Section 9 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties
under this Section 9, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers
served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that
it might have to any indemnified party otherwise than under this Section 9 and (ii) any liability that it may have to any
indemnified party under the foregoing provision of this Section 9 unless, and only to the extent that, such omission results
in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement
of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense
of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to
the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred
by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in
any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) 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, (3) 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
(4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges
of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties
shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party
promptly after the indemnifying party receives a written invoice relating to fees, disbursements and other charges. An indemnifying
party will not, in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying
party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 9
(whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding.

 

    - 25 -

     

    

 

(d) Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable from
the Company or Cowen, the Company and Cowen will contribute to the total losses, claims, liabilities, expenses and damages (including
any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other
than Cowen, such as persons who control the Company within the meaning of the Securities Act, officers of the Company who signed
the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company and Cowen
may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one
hand and Cowen on the other. The relative benefits received by the Company on the one hand and Cowen on the other hand shall be
deemed to be in the same proportion as the total Net Proceeds from the sale of the Placement Shares (before deducting expenses)
received by the Company bear to the total compensation received by Cowen from the sale of Placement Shares on behalf of the Company.
If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence
but also the relative fault of the Company, on the one hand, and Cowen, on the other, with respect to the statements or omission
that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or Cowen, the intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and Cowen agree that it would not be just and equitable
if contributions pursuant to this Section 9(d) were to be determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section
9(d) shall be deemed to include, for the purpose of this Section 9(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with
Section 9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(d), Cowen shall not be required
to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(d), any person who controls a party
to this Agreement within the meaning of the Securities Act, and any officers, directors, partners, employees or agents of Cowen,
will have the same rights to contribution as that party, and each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 9(d), will notify any such party or parties from whom contribution may be sought,
but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 9(d) except to the extent that the failure to so notify such other party materially
prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into
pursuant to the last sentence of Section 9(c) hereof, no party will be liable for contribution with respect to any action
or claim settled without its written consent if such consent is required pursuant to Section 9(c) hereof.

 

10.
Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 9
of this Agreement and all representations and warranties of the Company herein or in certificates delivered pursuant hereto
shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf of Cowen, any controlling
persons, or the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance
of the Placement Shares and payment therefor or (iii) any termination of this Agreement.

 

    - 26 -

     

    

 

11.
Termination.

 

(a) Cowen
shall have the right by giving notice as hereinafter specified at any time to terminate this Agreement if (i) any Material Adverse
Change, or any development that could reasonably be expected to result in a Material Adverse Change has occurred that, in the
reasonable judgment of Cowen, may materially impair the ability of Cowen to sell the Placement Shares hereunder, (ii) the Company
shall have failed, refused or been unable to perform any agreement on its part to be performed hereunder; provided, however,
in the case of any failure of the Company to deliver (or cause another person to deliver) any certification, opinion, or letter
required under Sections 7(m), 7(n), or 7(o), Cowen’s right to terminate shall not arise unless such
failure to deliver (or cause to be delivered) continues for more than thirty (30) days from the date such delivery was required;
or (iii) any other condition of Cowen’s obligations hereunder is not fulfilled, or (iv), any suspension or limitation
of trading in the Placement Shares or in securities generally on Nasdaq shall have occurred. Any such termination shall be without
liability of any party to any other party except that the provisions of Section 7(g) (Expenses), Section 9 (Indemnification
and Contribution), Section 10 (Representations and Agreements to Survive Delivery), Section 16 (Applicable Law;
Consent to Jurisdiction) and Section 17 (Waiver of Jury Trial) hereof shall remain in full force and effect notwithstanding
such termination. If Cowen elects to terminate this Agreement as provided in this Section 11(a), Cowen shall provide the
required notice as specified in Section 12 (Notices).

 

(b) The
Company shall have the right, by giving ten (10) days notice as hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination shall
be without liability of any party to any other party except that the provisions of Section 7(g), Section 9, Section
10, Section 16 and Section 17 hereof shall remain in full force and effect notwithstanding such termination.

 

(c) Cowen
shall have the right, by giving ten (10) days notice as hereinafter specified to terminate this Agreement in its sole discretion
at any time after the date of this Agreement. Any such termination shall be without
liability of any party to any other party except that the provisions of Section 7(g), Section 9, Section 10,
Section 16 and Section 17 hereof shall remain in full force and effect notwithstanding such termination.

 

(d) Unless
earlier terminated pursuant to this Section 11, this Agreement shall automatically terminate upon the issuance and sale
of all of the Placement Shares through Cowen on the terms and subject to the conditions set forth herein; provided that
the provisions of Section 7(g), Section 9, Section 10, Section 16 and Section 17 hereof shall
remain in full force and effect notwithstanding such termination.

 

(e) This
Agreement shall remain in full force and effect unless terminated pursuant to Sections 11(a), (b), (c), or (d)
above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 7(g), Section 9, Section 10, Section 16 and Section
17 shall remain in full force and effect.

 

(f) Any
termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however,
that such termination shall not be effective until the close of business on the date of receipt of such notice by Cowen or the
Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such
Placement Shares shall settle in accordance with the provisions of this Agreement.

 

    - 27 -

     

    

 

12.
Notices. All notices or other communications required or permitted to be given by any party to any other party pursuant
to the terms of this Agreement shall be in writing, unless otherwise specified in this Agreement, and if sent to Cowen, shall
be delivered to Cowen at Cowen and Company, LLC, 599 Lexington Avenue, New York, NY 10022, fax no. 646-562-1124, Attention: General
Counsel; or if sent to the Company, shall be delivered to Workhorse Group Inc., 100 Commerce Drive, Loveland, OH 45150, Attention:
Chief Financial Officer with a copy to Fleming PLLC, attention: Stephen Fleming, 49 Front Street, Suite 206, Rockville Center,
NY 11570. Each 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. Each such notice or other communication shall be deemed given (i) when delivered personally
or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a Business
Day (as defined below), or, if such day is not a Business Day on the next succeeding Business Day, (ii) on the next Business Day
after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited
in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, “Business
Day” shall mean any day on which the Nasdaq and commercial banks in the City of New York are open for business.

 

13.
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and Cowen and their
respective successors and the affiliates, controlling persons, officers and directors referred to in Section 9 hereof.
References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of
such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement
without the prior written consent of the other party; provided, however, that Cowen may assign its rights and obligations
hereunder to an affiliate of Cowen without obtaining the Company’s consent.

 

14.
Adjustments for Share Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement
shall be adjusted to take into account any share split, share dividend or similar event effected with respect to the Common Stock.

 

15.
Entire Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement
Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements
and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument executed by the Company and Cowen. In the event that
any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or
unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the
fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be
construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that
giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of
the parties as reflected in this Agreement.

 

    - 28 -

     

    

 

16.
Applicable Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the principles of conflicts of laws. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection with any transaction contemplated hereby, and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof (certified or registered mail, return receipt requested) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.

 

17.
Waiver of Jury Trial. The Company and Cowen each hereby irrevocably waives any right it may have to a trial by jury in
respect of any claim based upon or arising out of this Agreement or any transaction contemplated hereby.

 

18.
Absence of Fiduciary Relationship. The Company acknowledges and agrees that:

 

(a) Cowen
has been retained solely to act as sales agent in connection with the sale of the Common Stock and that no fiduciary, advisory
or agency relationship between the Company and Cowen has been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether Cowen has advised or is advising the Company on other matters;

 

(b) 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) the
Company has been advised that Cowen and its affiliates are engaged in a broad range of transactions which may involve interests
that differ from those of the Company and that Cowen has no obligation to disclose such interests and transactions to the Company
by virtue of any fiduciary, advisory or agency relationship; and

 

(d) the
Company waives, to the fullest extent permitted by law, any claims it may have against Cowen, for breach of fiduciary duty or
alleged breach of fiduciary duty in connection with the transactions contemplated by this Agreement and agrees that Cowen shall
have no liability (whether direct or indirect) to the Company in respect of such a fiduciary claim or to any person asserting
a fiduciary duty claim on behalf of or in right of the Company, including stockholders, partners, employees or creditors of the
Company.

 

19.
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other
may be made by facsimile transmission.

 

20.
Definitions. As used in this Agreement, the following term has the meaning set forth below:

 

(a) “Applicable
Time” means the date of this Agreement, each Representation Date, the date on which a Placement Notice is given, and
any date on which Placement Shares are sold hereunder.

 

(b) “Agent’s
Information” means, solely the following information in the Prospectus: the eighth paragraph under the caption “Plan
of Distribution” in the Prospectus.

 

[Remainder
of Page Intentionally Blank]

 

    - 29 -

     

    

 

If the foregoing correctly sets forth the understanding between the Company and Cowen, please so indicate
in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and
Cowen.

 

	 	 	Very truly yours,
	 	 	 
	 	 	COWEN AND COMPANY, LLC
	 	 	 	 
	 	 	By: 	/s/
    Bill Follis
	 	 	Name:	Bill Follis
	 	 	Title:	Managing Director
	 	 	 	 
	 	 	ACCEPTED as of the date
	 	 	first-above written:
	 	 	 	 
	 	 	WORKHORSE GROUP INC.
	 	 	 	 
	 	 	By:  	/s/ Julio Rodriguez
	 	 	Name:  	Julio Rodriguez
	 	 	Title:  	Chief Financial Officer

 

[Signature Page to Sales Agreement]

     

     

    

 

SCHEDULE 1

 

form
of PLACEMENT NOTICE

 

	From:	[                              	]
	Cc:	[                              	]
	To:	[	]
	Subject:	Cowen at the Market Offering—Placement Notice

 

Gentlemen:

 

Pursuant to the terms
and subject to the conditions contained in the Sales Agreement between Workhorse Group Inc. (the “Company”),
and Cowen and Company, LLC (“Cowen”) dated June [●], 2017 (the “Agreement”), I hereby
request on behalf of the Company that Cowen sell up to [ ] shares of the Company’s common stock, par value $0.001 per share,
at a minimum market price of $_______ per share. Sales should begin on the date of this Notice and shall continue until [DATE]
[all shares are sold].

 

     

     

    

 

SCHEDULE 2

 

Workhorse Group Inc.

Stephen Burns, Chief Executive Officer 

Julio Rodriguez, Chief Financial Officer 

 

Cowen and Company, LLC

Rob Sine, Managing Director 

Sam Herzig, Analyst 

 

     

     

    

 

SCHEDULE 3

 

Compensation

 

Cowen shall be paid compensation equal to
3.0% of the gross proceeds from the sales of Common Stock pursuant to the terms of this Agreement.

 

     

     

    

 

SCHEDULE 4

 

Schedule Of Subsidiaries

 

Workhorse Properties Inc., an Ohio corporation

Workhorse Technologies Inc., an Ohio corporation

Workhorse Motor Works Inc., an Indiana
corporation

 

     

     

    

 

Exhibit 7(m)

 

OFFICER CERTIFICATE

 

The undersigned, the duly qualified and elected
_______________________, of Workhorse Group Inc. (“Company”), a Nevada corporation, does hereby
certify in such capacity and on behalf of the Company, pursuant to Section 7(m) of the Sales Agreement dated June [●],
2017 (the “Sales Agreement”) between the Company and Cowen and Company, LLC, that to the best of the
knowledge of the undersigned.

 

(i)       The
representations and warranties of the Company in Section 6 of the Sales Agreement (A) to the extent such representations
and warranties are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse Change,
are true and correct on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof,
except for those representations and warranties that speak solely as of a specific date and which were true and correct as of such
date, and (B) to the extent such representations and warranties are not subject to any qualifications or exceptions, are true and
correct in all material respects as of the date hereof as if made on and as of the date hereof with the same force and effect as
if expressly made on and as of the date hereof except for those representations and warranties that speak solely as of a specific
date and which were true and correct as of such date; and

 

(ii)       The
Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the
Sales Agreement at or prior to the date hereof.

 

	 	By:	 
	 	 	Name:
	 	 	Title:

 

Date:Form of Transferable Subscription Rights Certificate

 Exhibit 4.3 
  

			
	RIGHTS CERTIFICATE #:                         	  	                         NUMBER OF RIGHTS

 THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE LGL GROUP, INC.’S PROSPECTUS DATED
[    ], 2017 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM BROADRIDGE CORPORATE ISSUER SOLUTIONS INC., THE INFORMATION AGENT, BY
TELEPHONE ((855) 793-5068) OR EMAIL (SHAREHOLDER@BROADRIDGE.COM). 
 The LGL Group, Inc. 

Incorporated under the laws of the State of Delaware 

TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE 

Evidencing Transferable Subscription Rights to Purchase Shares of Common Stock of The LGL Group, Inc. 

Subscription Price: $[            ] per whole share of Common Stock 

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 

5:00 P.M., EASTERN TIME, ON [    ], 2017, UNLESS EXTENDED BY THE COMPANY 

REGISTERED OWNER:
                                         
                                         
               
 THIS CERTIFIES THAT the registered owner whose name is inscribed
hereon is the owner of the number of transferable subscription rights (“Rights”) set forth above. Each Right entitles the holder thereof to subscribe for and purchase one-half of a share of common stock, par value $0.01
per share (the “Common Stock”), of The LGL Group, Inc., a Delaware corporation, at a subscription price (the “Subscription Price”) of
$[            ] per whole share of Common Stock (the “Basic Subscription Right”), pursuant to a rights offering (the “Rights Offering”), on
the terms and subject to the conditions set forth in the Prospectus and the “Instructions for Use of The LGL Group, Inc. Subscription Rights Certificate” accompanying this Subscription Rights Certificate. If any shares of Common Stock
available for purchase in the Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their Basic Subscription Right (the “Over-Subscription Shares”), any Rights holder that exercises its
Basic Subscription Right in full (other than those subscription rights to acquire less than one whole share of Common Stock, which cannot be exercised) may purchase a number of Over-Subscription Shares (the “Over-Subscription
Right”) pursuant to the terms and conditions of the Rights Offering, as described in the Prospectus. The Rights represented by this Subscription Rights Certificate may be exercised by completing Form 1 and any other appropriate
forms on the reverse side hereof and by returning the full payment of the subscription price for each share of Common Stock in accordance with the “Instructions for Use of The LGL Group, Inc. Subscription Rights Certificate” that accompany
this Subscription Rights Certificate. 
 The undersigned acknowledges that the number of shares that the undersigned may obtain by subscribing for shares in
the Rights Offering cannot be determined until the expiration of the offering period, as described in the Prospectus. 
 This Subscription Rights
Certificate is not valid unless countersigned by Broadridge Corporate Issuer Solutions Inc., as the subscription agent, and registered by the registrar. 

Witness the signatures of the duly authorized officers of The LGL Group, Inc. 
  

			
	Dated:	 	  

  

							
	  
 Chief Executive
Officer
	 		  	  
 Secretary
	  	

 DELIVERY OPTIONS FOR SUBSCRIPTION RIGHTS CERTIFICATE 

Delivery other than in the manner or to the address listed below will not constitute valid delivery. 

 

			
	By mail:	  	 By hand delivery or overnight courier,

excluding U.S. Postal Service:

		
	 Broadridge Corporate Issuer Solutions Inc.

Attn: BCIS Re-Organization Dept.
 P.O. Box 1317

Brentwood, NY 11717-0693
 (855) 793-5068 (toll free)
	  	 Broadridge Corporate Issuer Solutions Inc.

Attn: BCIS IWS
 51 Mercedes Way

Edgewood, NY 11717
 (855) 793-5068 (toll free)

 PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY. 

 

															
	 FORM 1-EXERCISE OF SUBSCRIPTION
RIGHTS
  
 To invest and purchase shares pursuant to your Basic Subscription Right,
please complete lines (a) and (c) and sign under Form 3 below. To invest and purchase shares pursuant to your Over-Subscription Right, please also complete line (b) and sign under Form 3 below. To the extent your investment exceeds Shares that you
are entitled under either the Basic Subscription Right or the Over-Subscription Right, you will be deemed to have elected to purchase the maximum number of shares for which you are entitled to under the Basic Subscription Right or Over-Subscription
Right, as applicable.
  
 (a) EXERCISE OF BASIC SUBSCRIPTION RIGHT:

 
	 	 FORM 2-DELIVERY TO
DIFFERENT ADDRESS
  
 If you wish for the Common Stock underlying your Rights, or a
certificate representing unexercised Rights to be delivered to an address different from that shown on the face of this Subscription Rights Certificate, please enter the alternate address below, sign under Form 3 and have your signature guaranteed
under Form 4.
  
  

FORM 3-SIGNATURE
  

TO SUBSCRIBE: I acknowledge that I have received the Prospectus for the rights offering and I hereby irrevocably invest the amount indicated under Form 1 above
on the terms and conditions specified in the Prospectus. This Form 3 must be signed by the registered holder(s) exactly as their name(s) appear(s) on the certificate(s) or by person(s) authorized to sign on behalf of the registered holder(s) by
documents transmitted herewith.
  
  

FORM 4-SIGNATURE GUARANTEE
  

This form must be completed if you have completed any portion of Form 2.

	 I apply for:
	 	             shares	 	x	 	$[            ]	 	=	 	$            	 
	 	 	(no. of new shares of Common Stock)	 		 	(Subscription Price)	 		 	(amount enclosed)	 
	  
 (b)
EXERCISE OF OVER-SUBSCRIPTION RIGHT
  
 If you have exercised your Basic Subscription
Right in full and wish to purchase additional shares of Common Stock pursuant to your Over-Subscription Right:
  
	 
	 I apply for:
	 	             shares	 	x	 	$[            ]	 	=	 	$            	 
	 	 	(no. of new shares of Common Stock)	 		 	(Subscription Price)	 		 	(amount enclosed)	 
	 	 	 
	 	 	Signature	 	 
	(c) Total Amount of Payment Enclosed = $            	 	Guaranteed:	 	  

	 	 		 		 		 		 		 		 	(Name of Bank or Firm)
	 	 	 
	METHOD OF PAYMENT (CHECK ONE)	 	By:	 	  

	 	 		 		 		 		 		 		 	(Signature of Officer)
	
☐   Check or bank draft payable to “Broadridge Corporate Issuer Solutions, Inc., as Subscription
Agent for The LGL Group, Inc.”
  

☐   Wire transfer of immediately available funds directly to the account maintained by Broadridge
Corporate Issuer Solutions, Inc., as Subscription Agent, for purposes of accepting subscriptions in this Rights Offering to Wells Fargo (420 Montgomery Street, San Francisco, CA 94104), for credit to for Broadridge Corporate Issuer Solutions, Inc.,
ABA No. 121000248, further credit to Account Number 4124218686, with reference to the Rights holder’s name.
	 	IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor institution (bank, stock broker, savings & loan
association or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.

 FOR INSTRUCTIONS ON THE USE OF THE LGL GROUP, INC. SUBSCRIPTION RIGHTS CERTIFICATE, CONSULT BROADRIDGE CORPORATE ISSUER
SOLUTIONS INC., THE INFORMATION AGENT, BY TELEPHONE ((855) 793-5068) OR EMAIL (SHAREHOLDER@BROADRIDGE.COM).

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