Document:

Exhibit 10.2

 

STOCK PURCHASE
AGREEMENT

 

This Stock Purchase
Agreement (this “Agreement”), dated as of May 18, 2016, is entered into by and between Aqua Metals, Inc., a
Delaware corporation (the “Company”), and the investors that have executed this Agreement and are listed on the Schedule
A attached hereto (individually, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

WHEREAS, the Company
has authorized the sale by the Company to the Purchasers of up to 719,333 shares of common stock of the Company, par value $0.001
per share (the “Common Stock”); and

 

WHEREAS, the Company
desires to sell to Purchasers, and Purchasers desire to purchase from the Company, shares of the Common Stock, on the terms and
subject to the conditions set forth in this Agreement;

 

NOW, THEREFORE, in
consideration of the premises and the representations, warranties, covenants and agreements contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties hereby agree as follows:

 

Article
I

Definitions

 

The following terms
have the meanings specified or referred to in this Article I:

 

“Action” means
any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation,
citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at
law or in equity.

 

“Affiliate” of
a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person. The term “control” (including the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise .

 

“Agreement” has
the meaning set forth in the preamble.

 

“Audited Financial
Statements” has the meaning set forth in Section 3.10.

 

“Balance Sheet”
has the meaning set forth in Section 3.10.

 

     

     

    

 

“Balance Sheet
Date” has the meaning set forth in Section 3.10.

 

“Benefit Plan”
has the meaning set forth in Section 3.21(a).

 

“Business
Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York, New York
are authorized or required by Law to be closed for business.

 

“Bylaws”
means the Amended and Restated Bylaws of the Company, as may be amended, restated or modified from time to time.

 

“CERCLA” means
the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization
Act of 1986, 42 U.S.C. §§ 9601 et seq.

 

“Certificate
of Incorporation” means that certain First Amended and Restated Certificate of Incorporation of the Company filed with
the Delaware Secretary of State on October 1, 2014, as may be amended, restated or modified from time to time.

 

“Closing” has
the meaning set forth in Section 2.03.

 

“Closing Date” has
the meaning set forth in Section 2.03.

 

“Code” means
the Internal Revenue Code of 1986, as amended.

 

“Common Stock” has
the meaning set forth in the recitals.

 

“Company” has
the meaning set forth in the preamble.

 

“Contracts” means
all contracts, leases, deeds, mortgages, licenses, instruments, notes, loans, commitments, undertakings, indentures, joint ventures
and all other agreements, commitments and legally binding arrangements, whether written or oral.

 

“Disclosure
Schedules” means the Disclosure Schedules delivered by the Company and Purchaser concurrently with the execution
and delivery of this Agreement.

 

“Dollars”
or “$”  means
the lawful currency of the United States.

 

“Encumbrance” means
any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security
interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction
on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

    	 	2	 

     

    

 

“Environmental
Claim” means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising
therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs
of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages,
property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising
out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or
alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

 

“Environmental
Law” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority:
(a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human
health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b)
concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse,
treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The
term “Environmental Law” includes, without limitation, the following (including their implementing regulations and
any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§
6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§
1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean
Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended,
29 U.S.C. §§ 651 et seq.

 

“Environmental
Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim
relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

 

“Environmental
Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required
under or issued, granted, given, authorized by or made pursuant to Environmental Law.

 

“ERISA” means
the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

“ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code.

 

    	 	3	 

     

    

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Financial
Statements” has the meaning set forth in Section 3.10.

 

“FINRA” means
the Financial Industry Regulatory Authority, Inc..

 

“GAAP” means
United States generally accepted accounting principles in effect from time to time.

 

“Governmental
Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency
or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory
authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

“Governmental
Licenses” has the meaning set forth in Section 3.19.

 

“Governmental
Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with
any Governmental Authority.

 

“Hazardous
Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid,
mineral or gas, in each case, whether naturally occurring or man-made, that is hazardous, acutely hazardous, toxic, or words of
similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive
materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, and polychlorinated
biphenyls.

 

“Insurance
Policies” has the meaning set forth in Section 3.17.

 

“Intellectual
Property Rights” has the meaning set forth in Section 3.16.

 

“Interim Balance
Sheet” has the meaning set forth in Section 3.10.

 

“Interim Balance
Sheet Date” has the meaning set forth in Section 3.10.

 

“Interim Financial
Statements” has the meaning set forth in Section 3.10.

 

“Interstate
Battery Purchase Agreement” means that certain agreement between the Company and Interstate Emerging Investments, LLC,
a Delaware limited liability company pursuant to which the Company will sell approximately $5,000,000 of shares of its Common Stock,
at $7.12 per share.

 

    	 	4	 

     

    

 

“Knowledge
of the Company” or “the
Company’s Knowledge” or any other similar knowledge qualification, means the actual knowledge of any director
or officer of the Company.

 

“Law” means
any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement
or rule of law of any Governmental Authority.

 

“Liabilities” has
the meaning set forth in Section 3.12.

 

“Losses” means
losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever
kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and the cost
of pursuing any insurance providers; provided, that “Losses” shall not include any punitive or exemplary
damages.

 

“Material
Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected
to become, individually or in the aggregate, materially adverse to the business, results of operations, condition (financial or
otherwise) or assets of the Company.

 

“Money Laundering
Laws” has the meaning set forth in Section 3.31.

 

“Multiemployer
Plan” has the meaning set forth in Section 3.21(c).

 

“NASDAQ”
means the Nasdaq Capital Market.

 

“OFAC”
has the meaning set forth in Section 3.32.

 

“Permits” means
all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained,
or required to be obtained, from Governmental Authorities.

 

“Permitted
Encumbrances” has the meaning set forth in Section 3.15(a).

 

“Person” means
an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization,
trust, association or other entity.

 

“Placement
Agent” means National Securities Corporation.

 

“Purchase
Price” has the meaning set forth in Section 2.01.

 

“Purchasers” has
the meaning set forth in the preamble.

 

“Purchaser
Indemnitees” has the meaning set forth in Section 7.02.

 

    	 	5	 

     

    

 

“Qualified
Benefit Plan” has the meaning set forth in Section 3.21(c).

 

“Real Property” means
the real property owned, leased or subleased by the Company, together with all buildings, structures and facilities located thereon.

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the Closing Date, by and among the Company
and the Purchasers, substantially in the form attached hereto as Exhibit A

 

“Release” means
any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation,
ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure,
facility or fixture).

 

“Representative” means,
with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and
other agents of such Person.

 

“SEC”
means the Securities and Exchange Commission.

 

“SEC Documents”
means the Company’s reports, schedules, forms, statements and other documents required to be filed by it under the Exchange
Act or the Securities Act and all exhibits included therein and financial statements and schedules thereto and documents incorporated
by reference therein.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares”
has the meaning set forth in Section 2.01.

 

“Subsidiary”
means, with respect to any Person, any corporation, association, partnership, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more intermediaries) controlled by or owned fifty 50%
or more by such Person.

 

“Taxes” means
all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration,
profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental,
stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes,
fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and
any interest in respect of such additions or penalties.

 

    	 	6	 

     

    

 

“Tax Return” means
any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

 

“Transaction
Documents” means this Agreement, the Registration Rights Agreement and each of the other agreements and instruments
entered into or delivered by any of the parties hereto in connection with the consummation of the transactions contemplated hereby
and thereby, as may be amended from time to time.

 

Article
II

Purchase
and Sale

 

Section
2.01         Purchase and Sale. Subject to the terms and conditions
set forth herein, at the Closing, the Company shall issue and sell to each Purchaser, and each Purchaser severally, but not jointly,
shall purchase from the Company that number of shares of Common Stock (the “Shares”) as is set forth opposite
such Purchaser’s name on the Schedule A, at a purchase price of $7.12 per share (the “Purchase Price”).

 

Section
2.02         Transactions Effected at the Closing.

 

(a)           At
the Closing, each Purchaser shall deliver to the Company:

 

(i)          the
Purchase Price by wire transfer of immediately available funds to an account of the Company designated in writing by the Company
to such Purchaser at least two (2) Business Days prior to the Closing; and

 

(ii)         the
Transaction Documents and all other agreements, documents, instruments or certificates required to be delivered by Purchaser at
or prior to the Closing pursuant to Section 5.03 of this Agreement.

 

(b)           At
the Closing, the Company shall deliver to each Purchaser:

 

(i)          evidence
of the Shares credited to book-entry accounts maintained by the transfer agent of the Company (the “Transfer Agent”),
bearing the legend or restrictive notation set forth in Section 4.05 of this Agreement, free and clear of all Encumbrances,
other than transfer restrictions set forth herein, under the Bylaws and applicable federal and state securities laws; and

 

(ii)         the
Transaction Documents and all other agreements, documents, instruments or certificates required to be delivered by the Company
at or prior to the Closing pursuant to Section 5.02 of this Agreement.

 

    	 	7	 

     

    

 

Section
2.03         Closing. Subject to the terms and conditions of this
Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the “Closing”)
to be held at 11:00 a.m., Eastern time, at the offices of Greenberg Traurig, LLP, 3161 Michelson Drive, Suite 1000, Irvine, CA
92612, or at such other time or on such other date or at such other place or by such other method as the Company and the Purchasers
may mutually agree upon orally or in writing (the day on which the Closing takes place, the “Closing
Date”); provided, however, that in no event shall the Closing Date be later than May 31, 2016.

 

Section
2.04         Use of Proceeds. The proceeds from the issuance of
the Shares shall be used by the Company to purchase four kettles for use
in lead recycling, for start up and expansion costs for the Company’s Reno, Nevada lead recycling plant, and to provide working
capital for the Company’s operations.

 

Article
III

Representations
and Warranties of the Company

 

Except as set forth
in the Disclosure Schedules, the Company represents and warrants to each Purchaser that the statements contained in this Article
III are true and correct as of the date hereof. The Disclosure Schedules shall be arranged in sections corresponding to the
numbered and lettered sections and subsections contained in this Article III, and the disclosures in any section or subsection
of the Disclosure Schedules shall qualify other sections and subsections in this Article III only to the extent it is readily
apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

 

Section
3.01         Organization, Qualification and Authority of the Company.
The Company is a corporation duly organized, validly existing and in good standing under the Laws of the state of Delaware
and has full corporate power and authority to (a) enter into this Agreement and the other Transaction Documents to which the Company
is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby
and (b) own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it
has been and is currently conducted. Section 3.01 of the Disclosure Schedules sets forth each jurisdiction in which the
Company is licensed or qualified to do business, and the Company is duly licensed or qualified to do business and is in good standing
in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes
such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not,
individually or in the aggregate, have a Material Adverse Effect. The execution and delivery by the Company of this Agreement and
any other Transaction Document to which the Company is a party, the performance by the Company of its obligations hereunder and
thereunder and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company,
and (assuming due authorization, execution and delivery by Purchaser) this Agreement constitutes a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, usury and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. When each other Transaction
Document to which the Company is or will be a party has been duly executed and delivered by the Company (assuming due authorization,
execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of
the Company enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, usury and other similar laws relating
to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

    	 	8	 

     

    

 

Section
3.02         Capitalization.

 

(a)           As
set forth on Section 3.02(a) of the Disclosure Schedules, the authorized capital stock of the Company immediately following
the Closing after giving effect to the transactions contemplated by this Agreement and the other Transaction Documents will consist
of 50,000,000 shares of Common Stock, of which (A) 15,559,022 shares will be issued and outstanding, (B) 20,894,979 shares will
be issued and outstanding on a fully-diluted, as converted and as exercised basis, and (C) 4,633,710 shares will be reserved
for issuance upon exercise of outstanding stock options and warrants.

 

(b)           As
of immediately following the Closing after giving effect to the transactions contemplated by this Agreement and the other Transaction
Documents, (i) all of the issued and outstanding shares of Common Stock will have been duly authorized, validly issued, and will
be fully paid and non-assessable, (ii) all of the issued and outstanding shares of Common Stock will have been issued in compliance
with all applicable federal and state securities Laws, (iii) none of the issued and outstanding shares of Common Stock will have
been issued in violation of any agreement, arrangement or commitment by the Company or any of its Affiliates or in violation of
any preemptive or similar rights of any Person granted by the Company, and (iv) all of the Shares will have the rights, preferences,
powers, restrictions and limitations set forth in the Certificate of Incorporation and under the Delaware General Corporation Law.

 

(c)           Section
3.02(c) of the Disclosure Schedules also sets forth, as of immediately following the Closing after giving effect to the transactions
contemplated by this Agreement and the other Transaction Documents, all outstanding or authorized (i) stock options and (ii) any
warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital
stock of the Company or obligating the Company to issue or sell any shares of capital stock of, or any other interest in, the Company,
in each case, including the number and kind of securities reserved for issuance on exercise or conversion of any such securities
or other rights, the exercise or conversion price of any such securities or other rights and any applicable vesting schedule for
any such securities or other rights. Except as set forth on Section 3.02(c) of the Disclosure Schedules, the Company does
not have outstanding, authorized, or in effect any stock appreciation, phantom stock, profit participation or similar rights. Except
as set forth on Section 3.02(c) of the Disclosure Schedules, there are no voting trusts, stockholder agreements, proxies
or other agreements, understandings or obligations in effect with respect to the voting, transfer or sale (including any rights
of first refusal, rights of first offer or drag-along rights), issuance (including any pre-emptive or anti-dilution rights), redemption
or repurchase (including any put or call or buy-sell rights), or registration (including any related lock-up or market standoff
agreements) of any shares of capital stock or other securities of the Company.

 

    	 	9	 

     

    

 

(d)          The
Company’s currently outstanding shares of Common Stock are quoted on the NASDAQ Capital Market, and the Company has not received
any notice of delisting.

 

Section
3.03         Subsidiaries.  Section 3.03 of the Disclosure
Schedules contains a complete list of all of the Subsidiaries of the Company. Each such Subsidiary is an entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of organization, has all requisite power and authority
to own, lease and operate its properties and to carry on its business as now being conducted and is duly qualified as a foreign
entity in all jurisdictions in which it is required to be so qualified. Except as set forth on Section 3.03 of the Disclosure
Schedules, the Company does not presently have any other Subsidiaries or, directly or indirectly, own, control or have any interest
in any shares or other ownership interest in any other Person. As to any Subsidiaries of the Company listed in Section 3.03
of the Disclosure Schedule, the Company owns, directly or indirectly, the equity interest in those Subsidiaries that are indicated
in Section 3.03 of the Disclosure Schedule.

 

Section
3.04         SEC Documents.  The Company has timely filed with the
SEC all SEC Documents. The SEC Documents, including any audited or unaudited financial statements and any notes thereto or schedules
included therein, at the time filed (in the case of registration statements, solely on the dates of effectiveness) (except to the
extent corrected by a subsequently filed SEC Document filed prior to the date hereof), (i) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, (ii) on their face complied as to form in all
material respects with applicable requirements of the Exchange Act and the applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, (iii) were prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) and (iv) fairly present (subject in the case of unaudited statements to normal, recurring and year-end
audit adjustments) in all material respects the consolidated financial position of the Company as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then ended.

 

Section
3.05         No Defaults; Violations.  No material default exists
in the due performance and observance of any term, covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other material agreement or instrument evidencing an obligation for borrowed
money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to
which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision of its
Certificate of Incorporation or Bylaws, or in violation of any franchise, license, permit, applicable law, rule, regulation, judgment
or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its properties
or businesses.

 

    	 	10	 

     

    

 

Section
3.06         Consents.  All consents, authorizations, approvals
and orders required in connection with the execution, delivery, and performance by the Company and the Subsidiaries of each of
the Transaction Documents and all ancillary documents to which it is a party, the consummation by the Company and the Subsidiaries
of the transactions herein and therein contemplated and the compliance by the Company and the Subsidiaries with the terms hereof
and thereof have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or other
body is required for the valid issuance, sale and delivery of the securities and the consummation of the transactions and agreements
contemplated by this Agreement and as contemplated by the disclosures the SEC Documents.

 

Section
3.07         No Conflicts, etc. The execution, delivery, and performance
by the Company of this Agreement and all Transaction Documents, the consummation by the Company of the transactions herein and
therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions
of, or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge
or encumbrance upon any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company
is a party that individually or in the aggregate would have a Material Adverse Effect; (ii) result in any violation of the provisions
of the Certificate of Incorporation or Bylaws; or (iii) result in the Company’s violation of any existing applicable law,
rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over
the Company or any of its properties or business constituted as of the date hereof that individually or in the aggregate would
have a Material Adverse Effect.

 

Section
3.08         Disclosure Controls. The Company and its Subsidiaries
maintain a system of “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) of the Exchange
Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to
be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, including controls and procedures designed to ensure that
such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding
required disclosure to be made; such disclosure controls and procedures are effective.

 

    	 	11	 

     

    

 

Section
3.09         Accounting Controls. The Company and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited
to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  There are
no material weaknesses in the internal controls over financial reporting of the Company.  The Company’s auditors and
the Audit Committee of the board of directors of the Company have been advised of:  (i) all significant deficiencies and material
weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably
likely to adversely affect the ability of the Company to record, process, summarize and report financial information; and (ii)
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s
internal controls over financial reporting.

 

Section
3.10         Financial Statements. Complete copies of the audited
consolidated financial statements, including the notes thereto and supporting schedules, if any, of the Company and its Subsidiaries
consisting of the balance sheet of the Company as at December 31 in each of the years 2014 and 2015 and the related statements
of income and retained earnings, stockholders’ equity and cash flow for the years then ended (the “Audited Financial
Statements”), and unaudited financial statements consisting of the balance sheet of the Company as at March 31, 2016
and the related statements of income and retained earnings, stockholders’ equity and cash flow for the three-month period
then ended (the “Interim Financial Statements” and together with the Audited Financial Statements, the “Financial
Statements”) have been delivered to Purchaser. The Financial Statements have been prepared in conformity with GAAP applied
on a consistent basis throughout the periods involved, subject, in the case of the Interim Financial Statements, to normal and
recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that, if presented,
would not differ materially from those presented in the Audited Financial Statements). The Financial Statements are based on the
books and records of the Company, and fairly present the financial condition of the Company as of the respective dates they were
prepared and the results of the operations of the Company for the periods indicated and the supporting schedules, if any, present
fairly the information required to be stated therein. The audited balance sheet of the Company as of December 31, 2015 is referred
to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date” and the
balance sheet of the Company as of March 31, 2016 is referred to herein as the “Interim Balance Sheet” and the
date thereof as the “Interim Balance Sheet Date”. The Company maintains a standard system of accounting established
and administered in accordance with GAAP.

 

    	 	12	 

     

    

 

Section
3.11         Independent Accountants. 
Armanino LLP, who have certified certain consolidated financial statements of the Company and its Subsidiaries, are independent
public accountants with respect to the Company and its Subsidiaries within the applicable rules and regulations adopted by the
SEC and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.

 

Section
3.12         Undisclosed Liabilities. Except as set forth on Section
3.12 of the Disclosure Schedule, the Company has no liabilities, obligations or commitments of any nature whatsoever, asserted
or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise (“Liabilities”),
except (a) those that are adequately reflected or reserved against in the Interim Balance Sheet as of the Interim Balance Sheet
Date, and (b) those that have been incurred in the ordinary course of business consistent with past practice since the Interim
Balance Sheet Date that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

Section
3.13         Absence of Certain Changes, Events and Conditions. Since
the Interim Balance Sheet Date, and other than in the ordinary course of business consistent with past practice, there has not
been, with respect to the Company or any Subsidiary, any:

 

(a)          event,
occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect;

 

(b)          amendment
of the Certificate of Incorporation, the Bylaws or other organizational documents of the Company;

 

(c)          split,
combination or reclassification of any shares of its capital stock;

 

(d)          issuance,
sale or other disposition of any of its capital stock, or grant of any options, warrants or other rights to purchase or obtain
(including upon conversion, exchange or exercise) any of its capital stock;

 

(e)          declaration
or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase or acquisition
of its capital stock;

 

(f)          material
change in any method of accounting or accounting practice of the Company, except as required by GAAP or as disclosed in the notes
to the Financial Statements;

 

(g)          incurrence,
assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities incurred in
the ordinary course of business consistent with past practice;

 

(h)          transfer,
assignment, sale or other disposition of any of the assets shown or reflected in the Balance Sheet or cancellation, discharge or
payment of any material debts, liens or entitlements;

 

(i)          transfer,
assignment or grant of any license or sublicense of any Intellectual Property Rights;

 

    	 	13	 

     

    

 

(j)          any
capital investment in, or any loan to, any other Person;

 

(k)          acceleration,
termination, material modification or amendment to or cancellation of any material contract to which the Company is a party or
by which it is bound;

 

(l)          any
material capital expenditures;

 

(m)        imposition
of any Encumbrance upon any of the Company properties, capital stock or assets, tangible or intangible;

 

(n)         adoption,
modification or termination of any: (i) material employment, severance, retention or other agreement with any current or former
employee, officer, director, independent contractor or consultant, (ii) Benefit Plan or (iii) collective bargaining or other agreement
with a Union, in each case whether written or oral;

 

(o)         any
loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders, directors, officers
and employees;

 

(p)         entry
into a new line of business or abandonment or discontinuance of existing lines of business;

 

(q)         adoption
of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any
provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar
Law;

 

(r)          acquisition
by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any
business or any Person or any division thereof; or

 

(s)          any
contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

 

Section
3.14         Disclosure of Agreements. The agreements and documents
described in the SEC Documents conform to the descriptions thereof contained therein and there are no agreements or other documents
required by the Securities Act and the rules and regulations to be described therein or to be filed with the SEC, that have not
been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party
or by which it is or may be bound or affected and (i) that is referred to in the SEC Documents, or (ii) is material to the Company’s
business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and
is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal or state
securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. None of such
agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s Knowledge, any
other party is in default thereunder and, to the Company’s Knowledge, no event has occurred that, with the lapse of time
or the giving of notice, or both, would constitute a default thereunder. To the Company’s Knowledge, performance by the Company
of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company
or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.

 

    	 	14	 

     

    

 

Section
3.15         Title to Assets; Real Property.

 

(a)          The
Company has good and valid (and, in the case of owned Real Property, good and marketable fee simple) title to, or a valid leasehold
interest in, all Real Property and personal property and other assets reflected in the Audited Financial Statements or acquired
after the Interim Balance Sheet Date, other than properties and assets sold or otherwise disposed of in the ordinary course of
business consistent with past practice since the Interim Balance Sheet Date. All such properties and assets (including leasehold
interests) are free and clear of Encumbrances except for the following (collectively referred to as “Permitted Encumbrances”):

 

(i)          those
items set forth in Section 3.15(a) of the Disclosure Schedules;

 

(ii)         liens
for Taxes not yet due and payable or being contested in good faith by appropriate procedures and for which there are adequate accruals
or reserves on the Interim Balance Sheet;

 

(iii)        mechanics,
carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business
consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material
to the business of the Company;

 

(iv)         easements,
rights of way, zoning ordinances and other similar encumbrances affecting Real Property which are not, individually or in the aggregate,
material to the business of the Company;

 

(v)          liens
arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary
course of business consistent with past practice which are not, individually or in the aggregate, material to the business of the
Company; or

 

(vi)         other
imperfections of title or Encumbrances, if any, that individually or in the aggregate, have not had, and would not have, a Material
Adverse Effect.

 

    	 	15	 

     

    

 

Section
3.16         Intellectual Property. The Company owns or possesses
adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, original works, inventions, licenses, approvals, governmental authorizations, trade secrets and other
intellectual property rights and all applications and registrations therefor (“Intellectual Property Rights”)
necessary to conduct its business as now conducted and as presently proposed to be conducted. To the Knowledge of the Company,
the Company has not infringed, nor conflicted with, the Intellectual Property Rights of others. To the knowledge of the Company,
there is no claim, action or proceeding being made or brought, being threatened, against the Company or any Subsidiary regarding
their Intellectual Property Rights. The Company is not aware of any facts or circumstances that might reasonably give rise to any
of the foregoing infringements or claims, actions or proceedings.

 

Section
3.17         Insurance.  The Company is covered by valid, outstanding
and enforceable policies or binders of fire, liability, product liability, umbrella liability, pollution and other environmental,
real and personal property, workers’ compensation, vehicular, directors and officers’ liability, fiduciary liability
and other casualty and property insurance maintained by the Company or its Affiliates and relating to the assets, business, operations,
employees, officers and directors of the Company (collectively, the “Insurance Policies”),
and true and complete copies of such Insurance Policies have been made available to Purchaser. Such Insurance Policies are in full
force and effect and none of the Insurance Policies will lapse or terminate following the consummation of the transactions contemplated
by this Agreement. Neither the Company nor any of its Affiliates has received any written notice of cancellation of, premium increase
with respect to, or alteration of coverage under, any of such Insurance Policies. The Insurance Policies are of the type and in
the amounts customarily carried by Persons conducting a business similar to the Company and are sufficient for compliance with
all applicable Laws and Contracts to which the Company is a party or by which it is bound, except where such noncompliance would
not result in a Material Adverse Effect. There are no claims related to the business of the Company pending under any such Insurance
Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation
of rights.

 

Section
3.18         Legal Proceedings; Governmental Orders.

 

(a)          There
are no material Actions pending or, to the Company’s Knowledge, threatened against, or involving the Company or any of its
Subsidiaries, or, to the Company’s Knowledge, any executive officer or director of the Company, or by the Company or any
of its Subsidiaries affecting any of its properties or assets (or by or against the Company or any Affiliate thereof and relating
to the Company).

 

(b)          There
are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Company or any
of its Subsidiaries or any of their properties or assets.

 

    	 	16	 

     

    

 

Section
3.19         Possession of Licenses and Permits. The Company and
each of its Subsidiaries (A) possesses the licenses, permits, certificates, authorizations, consents and approvals (collectively,
“Governmental Licenses”) issued by the appropriate Governmental Authorities necessary to conduct its business
as currently conducted as described in the SEC Documents, and (B) has obtained all necessary Governmental Licenses from other persons
necessary to conduct its business, except, in each case of clauses (A) and (B), (i) as described in the SEC Documents or (ii) to
the extent that any failure to possess any Governmental Licenses, provide any notice, make any filing, or obtain any Governmental
Licenses would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; none of the Company
and subsidiaries is in violation of, or in default under, any Governmental License, as except as would not reasonably be expected
to have a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except when the invalidity
of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor the Subsidiary has received
any notice of proceedings relating to the revocation or modification of any Governmental Licenses which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.

 

Section
3.20         Environmental Laws. Except as described in the SEC
Documents, (A) neither the Company nor any subsidiary is in violation of any Environmental Laws, except for those violations that
would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (B) each of the Company
and its subsidiaries has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance
in all material respects with their requirements except for those violations that would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, (C) there are no pending or, to the Company’s Knowledge, threatened
administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating to any Environmental Law against the Company or any subsidiary, and (D) to the Company’s
Knowledge, there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or
remediation, or an investigation, action, suit or proceeding by any private party or governmental body or agency, against or affecting
the Company or any subsidiary relating to Hazardous Materials or any Environmental Laws.

 

Section
3.21         Employee Benefit Matters.

 

(a)          Section
3.21(a) of the Disclosure Schedules contains a true and complete list of each pension, benefit, retirement, compensation, profit-sharing,
deferred compensation, incentive, performance award, phantom equity, stock or stock-based, change in control, retention, severance,
vacation, paid time off, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto),
in each case whether or not reduced to writing and whether funded or unfunded, including each “employee benefit plan”
within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA, which is or has
been maintained, sponsored, contributed to, or required to be contributed to by the Company for the benefit of any current or former
employee, officer, director, retiree, independent contractor or consultant of the Company or any spouse or dependent of such individual,
or under which the Company has or may have any Liability, or with respect to which Purchaser or any of its Affiliates would reasonably
be expected to have any Liability, contingent or otherwise (as listed on Section 3.21(a) of the Disclosure Schedules, each,
a “Benefit Plan”). With respect to each Benefit Plan, the Company has made available to Purchaser accurate,
current and complete copies of each of the following: (i) where the Benefit Plan has been reduced to writing, the plan document
together with all amendments; (ii) where the Benefit Plan has not been reduced to writing, a written summary of all material plan
terms; and (iii) in the case of any Benefit Plan that is intended to be qualified under Section 401(a) of the Code, a copy of the
most recent determination, opinion or advisory letter from the Internal Revenue Service.

 

    	 	17	 

     

    

 

(b)          Each
Benefit Plan (other than any multiemployer plan within the meaning of Section 3(37) of ERISA (each a “Multiemployer Plan”))
has been established, administered and maintained in accordance with its terms and in compliance with all applicable Laws (including
ERISA and the Code). Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a “Qualified
Benefit Plan”) is so qualified and has received a favorable and current determination letter from the Internal Revenue
Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype
plan sponsor, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are
exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and nothing has occurred that could
reasonably be expected to cause the revocation of such determination letter from the Internal Revenue Service or the unavailability
of reliance on such opinion letter from the Internal Revenue Service, as applicable, nor has such revocation or unavailability
been threatened. Nothing has occurred with respect to any Benefit Plan that has subjected or could reasonably be expected to subject
the Company to a penalty under Section 502 of ERISA or to tax or penalty under Section 4975 of the Code. All benefits, contributions
and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable
Laws and accounting principles, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued or otherwise adequately
reserved to the extent required by, and in accordance with, GAAP. There is no pending or, to the Company’s Knowledge, threatened
Action relating to a Benefit Plan (other than routine claims for benefits).

 

(c)          Neither
the Company nor any of its ERISA Affiliates has (i) incurred or reasonably expects to incur, either directly or indirectly, any
material Liability under Title I or Title IV of ERISA or related provisions of the Code or foreign Law relating to employee benefit
plans; (ii) failed to timely pay premiums to the Pension Benefit Guaranty Corporation; (iii) withdrawn from any Benefit Plan; or
(iv) engaged in any transaction which would give rise to liability under Section 4069 or Section 4212(c) of ERISA.

 

(d)          With
respect to each Benefit Plan (i) no such plan is a Multiemployer Plan; (ii) no such plan is a “multiple employer plan”
within the meaning of Section 413(c) of the Code or a “multiple employer welfare arrangement” (as defined in Section
3(40) of ERISA); and (iii) no Action has been initiated by the Pension Benefit Guaranty Corporation to terminate any such
plan or to appoint a trustee for any such plan.

 

    	 	18	 

     

    

 

(e)          Other
than as required under Section 601 et seq. of ERISA or other applicable Law, no Benefit Plan provides post-termination or retiree
welfare benefits to any individual for any reason, and neither the Company nor any of its ERISA Affiliates has any Liability to
provide post-termination or retiree welfare benefits to any individual.

 

Section
3.22         Employment Matters. The Company is not involved in
any labor dispute or, to the Knowledge of the Company, is any such dispute threatened. To the Knowledge of the Company, none of
the Company’s employees is a member of a union, works council or labor organization. The Company is and has been in compliance
in all material respects with all applicable Laws pertaining to employment and employment practices, including all Laws relating
to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation,
reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring,
promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’
compensation, leaves of absence and unemployment insurance. All individuals characterized and treated by the Company as independent
contractors or consultants are properly treated as independent contractors under all applicable Laws. All employees classified
as exempt under the Fair Labor Standards Act and state and local wage and hour laws are properly classified in all material respects.

 

Section
3.23         No Registration Required. Assuming the accuracy of
the representations and warranties of Purchaser contained in this Agreement, the sale and issuance of the shares pursuant to this
Agreement is exempt from the registration requirements of the Securities Act, and neither the Company nor, to the Company’s
knowledge, any authorized Representative acting on its behalf has taken or will take any action hereafter that would cause the
loss of such exemption.

 

Section
3.24         No Integration. Neither the Company nor any of its
Affiliates has, directly or indirectly through any agent, made any offers or sales of any security of the Company or solicited
any offers to buy any security that is or will be integrated with the sale of the Shares in a manner that would require such registration
under the Securities Act.

 

Section
3.25         No Side Agreements. There are no agreements by the
Company, on the one hand, and Purchaser or any of their Affiliates, on the other hand, with respect to the transactions contemplated
hereby other than the Transaction Documents, nor promises or inducements for future transactions between or among any of such parties.

 

    	 	19	 

     

    

 

Section
3.26         NASDAQ Listing of Shares. As of the Closing Date, the
Shares will be approved for listing, subject to official notice of issuance, on the NASDAQ Capital Market.

 

Section
3.27         Taxes. Except as set forth in Section 3.27 of
the Disclosure Schedules:

 

(a)          The
Company has timely filed all Tax Returns that it was required to file. All such Tax Returns were complete and correct in all respects.
All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been timely paid.

 

(b)          The
Company has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, customer, stockholder or other party, and complied with all information reporting and
backup withholding provisions of applicable Law.

 

(c)          No
extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company.

 

(d)          All
deficiencies asserted, or assessments made, against the Company as a result of any examinations by any taxing authority have been
fully paid.

 

(e)          The
Company is not a party to any Action by any taxing authority. There are no pending or threatened Actions by any taxing authority.

 

(f)          The
Company has not been a member of an affiliated, combined, consolidated or unitary Tax group for Tax purposes. The Company has no
Liability for Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any corresponding provision
of state, local or foreign Law), as transferee or successor, by contract or otherwise.

 

Section
3.28         Books and Records. The minute books and stock record
books of the Company, all of which have been made available to Purchaser, are complete and correct and have been maintained in
accordance with sound business practices. The minute books of the Company contain, in all material respects, accurate and complete
records of all meetings, and actions taken by written consent of, the stockholders, the board of directors and any committees of
the board of directors of the Company, and no meeting, or action taken by written consent, of any such stockholders, board of directors
or committee has been held for which minutes have not been prepared and are not contained in such minute books.

 

Section
3.29         Brokers.  No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement
or any other Transaction Document based upon arrangements made by or on behalf of the Company.

 

Section
3.30         Related Party Transactions. Except as disclosed in
the SEC Documents, there are no business relationships or related party transactions involving the Company or any other person
required to be described in the SEC Documents that have not been described as required.

 

    	 	20	 

     

    

 

Section
3.31         Money Laundering Laws. The Company has not, and, to
the Company’s Knowledge, none of the officers, directors, employees or agents purporting to act on behalf of the Company
or one of its Subsidiaries, as applicable, has, made any payment of funds of the Company or one of its Subsidiaries or received
or retained any funds in violation of any law, rule or regulation relating to the “know your customer” and anti-money
laundering laws of any jurisdiction (collectively, the “Money Laundering Laws”) and no action, suit or proceeding
by or before any Governmental Authority involving the Company or one of its Subsidiaries with respect to the Money Laundering Laws
is pending or, to the Company’s Knowledge, threatened.

 

Section
3.32         OFAC. The Company has not, and, to the Company’s
Knowledge, none of the respective directors, officers, agents or employees purporting to act on behalf of the Company or one of
its Subsidiaries, as applicable, is currently the target of or reasonably likely to become the target of any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company and
its Subsidiaries will not directly or indirectly use the proceeds of the sale of the Shares hereunder, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the
activities of any person currently the target of any U.S. sanctions administered by OFAC.

 

Section
3.33         Investment Company Act. The Company is not, nor upon
the sale of the Shares as contemplated herein and the application of the net proceeds therefrom, will the Company be, an “investment
company” or an entity “controlled” by an “investment company” (as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations promulgated thereunder).

 

Section
3.34         Foreign Corrupt Practices Act. Neither the Company
nor any of the directors, employees or officers of the Company or, to the Company’s Knowledge, any other person acting on
behalf of the Company has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal
price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or any political party or candidate for office (domestic or foreign)
or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection
with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Effect as reflected in
any of the Financial Statements or (iii) if not continued in the future, might have a Material Adverse Effect. The Company has
taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977, as amended.

 

    	 	21	 

     

    

 

Section
3.35         Officer’s Certificate. Any certificate pursuant
to this Agreement signed by any duly authorized officer of the Company and delivered to Purchaser shall be deemed a representation
and warranty by the Company to Purchaser as to the matters covered thereby).

 

Article
IV

Representations
and Warranties of Purchaser

 

Each Purchaser, with
respect to itself only and not with respect any other Purchaser, represents and warrants to the Company that the statements contained
in this Article IV are true and correct as of the date hereof.

 

Section
4.01         Organization and Authority of Purchaser. Such Purchaser
(i) if an entity, is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization
with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
(as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder, or (ii) if an individual,
has the legal capacity to enter into and to consummate the transactions contemplated by the Transaction Documents to which it is
a party and otherwise to carry out its obligations hereunder and thereunder.

 

Section
4.02         No Conflicts; Consents. The execution, delivery and
performance by such Purchaser of this Agreement and the other Transaction Documents to which it is a party, and the consummation
of the transactions contemplated hereby and thereby, do not and will not: (a) if an entity, conflict with or result in a violation
or breach of, or default under, any provision of the organizational documents of such Purchaser; (b) conflict with or result in
a violation or breach of any provision of any Law or Governmental Order applicable to such Purchaser; or (c) require the consent,
notice or other action by any Person under any Contract to which Purchaser is a party. No consent, approval, Permit, Governmental
Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to such Purchaser in
connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby.

 

Section
4.03         Investment Purpose. Such Purchaser is acquiring its
Shares for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof
in violation of applicable securities laws, except pursuant to sales registered or exempted under the Securities Act; provided,
however, by making the representations herein, such Purchaser does not agree, or make any representation or warranty, to hold any
of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance
with or pursuant to a registration statement or an exemption under the Securities Act. Such Purchaser does not presently have any
agreement or understanding, directly or indirectly, with any Person to distribute any of the Shares in violation of applicable
securities laws.

 

    	 	22	 

     

    

 

Section
4.04         Brokers. Except for the Placement Agent, no broker,
finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Purchaser.

 

Section
4.05         Accredited Investor Status. Such Purchaser is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D, as promulgated under the Securities Act.

 

Section
4.06         SEC Documents. Such Purchaser acknowledges and agrees
that the Company has provided or made available to it (through EDGAR, the Company’s website or otherwise) all SEC Documents,
as well as all press releases or investor presentations issued by the Company through the date of this Agreement that are included
in a filing by the Company on Form 8-K or clearly posted on the Company’s website.

 

Article
V

Conditions
to closing

 

Section
5.01         Conditions to Obligations of All Parties. The obligations
of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to
the Closing Date, of each of the following conditions:

 

(a)          No
Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and
has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation
of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

 

(b)          This
Agreement and each of the other Transaction Documents shall have been executed and delivered by the parties thereto and true and
complete copies thereof shall have been delivered to the parties.

 

(c)          The
Contemporaneous Closing of the transactions contemplated by the Interstate Battery Purchase Agreement.

 

    	 	23	 

     

    

 

Section
5.02         Conditions to Obligations of Purchaser. The obligations
of each Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or such Purchaser’s
waiver, at or prior to the Closing, of each of the following conditions:

 

(a)          The
Company shall have obtained all governmental, regulatory or third party consents and approvals necessary for the sale of the Shares.

 

(b)          The
Placement Agent, on behalf of such Purchaser, shall have received a certificate duly executed by the President and Chief Executive
Officer of the Company, dated as of the Closing, certifying:

 

(i)          
all representations and warranties of the Company shall be true and correct in all material respects as of the date hereof and
at and as of the Closing Date, with the same force and effect as though made on and as of the Closing Date; and

 

(ii)         the
Company shall have performed all obligations and agreements and complied with all covenants and conditions contained in this Agreement
to be performed or complied with by it prior to the Closing Date.

 

(c)          The
Placement Agent, on behalf of such Purchaser shall have received a certificate duly executed by the secretary or an assistant secretary
(or equivalent officer) of the Company, dated as of the Closing, certifying:

 

(i)          that
attached thereto are true and complete copies of all resolutions and other consents adopted by the board of directors and stockholders
of the Company authorizing and approving the execution, delivery, filing and performance of this Agreement and the other Transaction
Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions and consents
are in full force and effect as of the Closing and are all the resolutions and consents adopted in connection with the transactions
contemplated hereby and thereby;

 

(ii)         that
attached thereto are true and complete copies of the Certificate of Incorporation and Bylaws of the Company and that such organizational
documents are in full force and effect as of the Closing; and

 

(iii)        the
names and signatures of the officers of the Company authorized to sign this Agreement, the Transaction Documents and the other
documents to be delivered hereunder and thereunder.

 

(d)          The
Company shall have delivered to the Placement Agent, on behalf of such Purchaser, (i) a good standing certificate (or its equivalent)
for the Company and each of the Subsidiaries from the secretary of state of the State of Delaware and (ii) a foreign qualification
certificate (or its equivalent) for the Company and each of the Subsidiaries from the secretary of state or similar Governmental
Authority of each jurisdiction in which the Company has qualified, or is required to qualify, to do business as a foreign corporation.

 

    	 	24	 

     

    

 

(e)          The
Company shall have delivered, or caused to be delivered, to such Purchaser each of the following, each in form and substance satisfactory
to such Purchaser:

 

(i)          evidence
of the Shares credited to book-entry accounts maintained by the Transfer Agent, bearing the legend or restrictive notation set
forth in Section 8.04 of this Agreement, free and clear of all Encumbrances, other than transfer restrictions under the
Transaction Documents, the Bylaws and applicable federal and state securities laws;

 

(ii)         an
opinion of legal counsel to the Company, dated as of the Closing Date, stating that the Company is duly incorporated, the Transaction
Documents have been duly authorized, and that the Shares are duly authorized, fully paid and non-assessable, which opinion may
be subject to such assumptions and conditions are normally set forth in opinions of legal counsel in respect of such matters; and

 

(iii)        such
other documents or instruments as such Purchaser reasonably requests and are reasonably necessary to consummate the transactions
contemplated by this Agreement.

 

(f)          The
Company shall have fully complied with, or obtained appropriate consents or waivers with respect to, its obligations under each
of the agreements or other documents identified on Section 3.02(c) of the Disclosure Schedules, including with respect to
any outstanding rights of first refusal, rights of first offer, pre-emptive rights or anti-dilution rights or redemption or repurchase
rights.

 

(g)          The
NASDAQ shall have authorized, upon official notice of issuance, the listing of the Shares.

 

(h)          No
notice of delisting from the NASDAQ shall have been received by the Company with respect to the Shares.

 

(i)          The
Shares shall not have been suspended by the SEC or the NASDAQ from trading on the NASDAQ nor shall suspension by the SEC or the
NASDAQ have been threatened in writing by the SEC or the NASDAQ.

 

Section
5.03         Conditions to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or the Company’s
waiver, at or prior to the Closing, of each of the following conditions:

 

(a)          Each
Purchaser shall have delivered to the Company cash in an amount equal to such Purchaser’s Purchase Price by wire transfer
in immediately available funds, to an account or accounts designated in writing by the Company to the Purchasers.

 

    	 	25	 

     

    

 

Article
VI

Covenants

 

Section
6.01         Taking of Necessary Action. 
Each of the parties hereto shall use its commercially reasonable efforts promptly to take or cause to be taken all action
and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate
and make effective the transactions contemplated by this Agreement. Without limiting the foregoing, the Company and the Purchasers
shall each use its commercially reasonable efforts to make all filings and obtain all consents of Governmental Authorities that
may be necessary or, in the reasonable opinion of the other parties, as the case may be, advisable for the consummation of the
transactions contemplated by the Transaction Documents. The Company shall promptly and accurately respond, and shall use its commercially
reasonable efforts to cause its transfer agent to respond, to reasonable requests for information (which is otherwise not publicly
available) made by any Purchaser or its auditors relating to the actual holdings of such Purchaser or its accounts; provided, that
the Company shall not be obligated to provide any such information that could reasonably result in a violation of applicable Law
or conflict with the Company’s insider trading policy or a confidentiality obligation of the Company. The Company shall use
its commercially reasonable efforts to cause its transfer agent to reasonably cooperate with each Purchaser to ensure that the
Shares are validly and effectively issued to such Purchaser and that such Purchaser’s ownership of the Shares following the
Closing is accurately reflected on the appropriate books and records of the Company’s transfer agent.

 

Section
6.02         Supplemental Listing Application. 
The Company shall file prior to the Closing a supplemental listing application with the NASDAQ to list the Shares.

 

Article
VII

Indemnification

 

Section
7.01         Survival. Subject to the limitations and other provisions
of this Agreement, the representations, warranties and covenants contained herein shall survive the Closing and shall remain in
full force and effect until the date that is two (2) years from the Closing Date; provided, that the representations and
warranties in Section 3.17, Section 3.20, Section 3.21, Section 3.22 and Section 3.27 shall
survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof)
plus 60 days. All covenants and agreements of the parties contained herein shall survive the Closing indefinitely or for the period
explicitly specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to
the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration
date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty
and such claims shall survive until finally resolved.

 

Section
7.02         Indemnification By Company. Subject to the other terms
and conditions of this Article VII, the Company shall indemnify and defend each Purchaser and each Purchaser’s Affiliates
and their respective Representatives (collectively, the “Purchaser Indemnitees”)
against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses
incurred or sustained by, or imposed upon, the Purchaser Indemnitees based
upon, arising out of, with respect to or by reason of:

 

    	 	26	 

     

    

 

(a)          any
inaccuracy in or breach of any of the representations or warranties of the Company contained in this Agreement or in any certificate
or instrument delivered by or on behalf of the Company pursuant to this Agreement; or

 

(b)          any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Company pursuant to this Agreement.

 

Section
7.03         Payments. Once a Loss is agreed to by the Company or
finally adjudicated to be payable pursuant to this Article VII, the Company shall satisfy its obligations within fifteen
(15) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds. The parties hereto
agree that should the Company not make full payment of any such obligations within such fifteen (15)-Business Day period, any amount
payable shall accrue interest from and including the date of agreement of the Company or final, non-appealable adjudication to
the date such payment has been made at a rate of 18% per annum. Such interest shall be calculated daily on the basis of a 365-day
year and the actual number of days elapsed.

 

Section
7.04         Tax Treatment of Indemnification Payments. All indemnification
payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless
otherwise required by Law.

 

Section
7.05         Effect of Investigation. Neither the representations,
warranties and covenants of the Company, nor the right to indemnification of any Purchaser Indemnitee making a claim under this
Article VII with respect thereto, shall be affected or deemed waived by reason of any investigation made by or on behalf
of a Purchaser Indemnitee (including by any of its Representatives) or by reason of the fact that a Purchaser Indemnitee or any
of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by
reason of a Purchaser Indemnitee’s waiver of any condition set forth in Section 5.02.

 

Article
VIII

Miscellaneous

 

Section
8.01         Expenses. Except as otherwise expressly provided herein,
all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred
in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and
expenses, whether or not the Closing shall have occurred.

 

    	 	27	 

     

    

 

Section
8.02         Notices. All notices, requests, consents, claims, demands,
waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand
(with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier
(receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent
during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient
or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such
communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall
be specified in a notice given in accordance with this Section 8.02):

 

	If to the Company:	
        1010 Atlantic Avenue

        Alameda, California 94501

        E-mail: Steve.Clarke@aquametals.com

        Attention: Stephen R. Clarke

	 	 
	with a copy to:	
        Greenberg Traurig, LLP

        3161 Michelson Drive, Suite 1000

        Irvine, California 92612

        Facsimile: (949) 732-6501

        E-mail: donahued@gtlaw.com

        Attention: Daniel K. Donahue, Esq.

	 	 
	If to Purchaser:	to its address, facsimile number or e-mail address set forth on such Purchaser’s signature page hereto
	 	 
	with a copy to:	
        Golenbock Eiseman Assor Bell & Peskoe LLP

        437 Madison Avenue

        New York, New York 10022

        Facsimile: (212)754-0330

        E-mail: ahudders@tgolenbock.com

        Attention: Andrew D. Hudders, Esq.

 

Section
8.03         Interpretation. For purposes of this Agreement, (a)
the words “include,” “includes” and “including” shall be deemed to be followed by the words
“without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,”
“hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise
requires, references herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and
Disclosure Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement,
instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions
thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and
any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction
or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and
Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were
set forth verbatim herein.

 

    	 	28	 

     

    

 

Section 8.04         

 

(a)          Transfer
Agent Instructions. If a Purchaser effects a sale, assignment or transfer of the Shares, the Company shall permit the transfer
and shall promptly instruct its transfer agent to issue one or more certificates or, if the Shares are eligible for legend removal
under Section 8.04(c), credit shares to the applicable balance accounts at the Depository Trust Company (“DTC”)
in such name and in such denominations as specified by such Purchaser to effect such sale, transfer or assignment. In the event
that such sale, assignment or transfer involves Shares sold, assigned or transferred pursuant to an effective registration statement
or in compliance with Rule 144, the transfer agent shall issue such shares to such Purchaser, assignee or transferee (as the case
may be) without any restrictive legend in accordance with Section 8. 04(c) below. The Company acknowledges that a breach by it
of its obligations under this Section 8.04(a) will cause irreparable harm to each Purchaser. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 8.04(a) will be inadequate and agrees, in the event of
a breach or threatened breach by the Company of the provisions of this Section 8.04(a), that each Purchaser shall be entitled,
in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company
shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company’s
transfer agent on each Effective Date (as defined and provided in the Registration Rights Agreement), provided that the applicable
Purchaser(s) or its or their representatives and/or brokers have provided the documentation to counsel reasonably necessary or
required for the basis of such legal opinion. Any fees (with respect to the transfer agent, counsel to the Company or otherwise)
associated with the issuance of such opinion or the removal of any legends on any of the Shares shall be borne by the Company.

 

(b)          Legends.
Each Purchaser understands that the Shares have been issued pursuant to an exemption from registration or qualification under the
Securities Act and applicable state securities laws, and except as set forth below, the Shares shall bear any legend as required
by the “Blue Sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):

 

    	 	29	 

     

    

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY),
IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE
TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

(c)          Removal
of Legends. Certificates evidencing the Shares shall not be required to contain the legend set forth in Section 8.04(b) above
or any other legend (i) following any sale of such Shares pursuant to Rule 144 (assuming the transferor is not an affiliate of
the Company), (ii) if such Shares are eligible to be sold, assigned or transferred under Rule 144 without restriction under the
volume or disclosure requirements, (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided
that such Purchaser provides the Company with an opinion of counsel to such Purchaser, in a generally acceptable form, to the effect
that such sale, assignment or transfer of the Shares may be made without restrictive legends and thereafter made without registration
under the applicable requirements of the Securities Act, or (v) if such legend is not required under applicable requirements of
the Securities Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC, provided
that such Purchaser provides the Company with a reasonable description of the authority it is relying upon). If a legend is not
required pursuant to the foregoing, the Company, at its expense, shall no later than two (2) Business Days following the delivery
by a Purchaser to the Company or the transfer agent (with notice to the Company) of a legended certificate representing such Shares
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer, if applicable), together with any other deliveries from such Purchaser as may be required above in this Section 8.04(c),
as directed by such Purchaser, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program, credit the aggregate number of shares of Common Stock to which such Purchaser shall be entitled to
such Purchaser’s or its designee’s balance account with the DTC through its Deposit/Withdrawal at Custodian system
or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue
and dispatch for delivery (via reputable overnight courier) to such Purchaser, a certificate representing such Shares that is free
from all restrictive and other legends, registered in the name of such Purchaser or its designee (the date by which such credit
is so required to be made to the balance account of such Purchaser’s or such Purchaser’s nominee with DTC or such certificate
is required to be delivered to such Purchaser pursuant to the foregoing is referred to herein as the “Required Delivery
Date”).

 

    	 	30	 

     

    

 

(d)          Failure
to Timely Deliver; Buy-In. If the Company improperly fails to (i) issue and dispatch for delivery (or cause to be so dispatched)
to a Purchaser by the Required Delivery Date a certificate representing the Shares so delivered to the Company by such Purchaser
that is free from all restrictive and other legends or (ii) credit the balance account of such Purchaser’s or such Purchaser’s
nominee with DTC for such number of Shares so delivered to the Company, and if on or after the business day immediately following
the Required Delivery Date such Purchaser (or any other Person in respect, or on behalf, of such Purchaser) purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion
of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number
of shares of Common Stock, that such Purchaser so anticipated receiving from the Company without any restrictive legend, then,
in addition to all other remedies available to such Purchaser, the Company shall, within five (5) Business Days after such Purchaser’s
request and in such Purchaser’s sole discretion, either (x) pay cash to such Purchaser in an amount equal to such Purchaser’s
total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock
so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”),
at which point the Company’s obligation to so deliver such certificate or credit such Purchaser’s balance account shall
terminate and such shares shall be cancelled, or (y) promptly honor its obligation to so deliver to such Purchaser a certificate
or certificates or credit such Purchaser’s DTC account representing such number of shares of Common Stock that would have
been so delivered if the Company timely complied with its obligations hereunder and pay cash to such Purchaser in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such number of Shares that the Company was required to deliver
to such Purchaser by the Required Delivery Date multiplied by (B) the lowest closing sale price of the Common Stock on any Business
Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Shares and ending
on the date of such delivery and payment under this clause (y).

 

Section
8.05         Headings. The headings in this Agreement are for reference
only and shall not affect the interpretation of this Agreement.

 

Section
8.06         Severability. If any term or provision of this Agreement
is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any
other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest
extent possible.

 

    	 	31	 

     

    

 

Section
8.07         Entire Agreement. This Agreement and the other Transaction
Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained
herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect
to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the
other Transaction Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the
Disclosure Schedules), the statements in the body of this Agreement will control.

 

Section
8.08         Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and assigns, including, as contemplated below, any
assignee of any of the Shares. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Purchasers. A Purchaser may assign some or all of its rights hereunder in connection with any transfer of
any of its Shares without the consent of the Company, in which event such assignee shall be deemed to be a Purchaser hereunder
with respect to such assigned rights.

 

Section
8.09         No Third-party Beneficiaries. Except as provided in
Article VII, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section
8.10         Amendment and Modification; Waiver. This Agreement
may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of
any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver
by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by
such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure
to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed
as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section
8.11         Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial.

 

(a)          This
Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect
to any choice or conflict of law provision or rule.

 

    	 	32	 

     

    

 

(b)          ANY
LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE
OF NEW YORK IN EACH CASE LOCATED IN The City of New York, Borough of Manhattan, AND
EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF
PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

 

(c)          EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A)
NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE
FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.10(c).

 

Section
8.12         Specific Performance. The parties agree that irreparable
damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law
or in equity.

 

Section
8.13         Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed
copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same
legal effect as delivery of an original signed copy of this Agreement.

 

    	 	33	 

     

    

 

Section
8.14         Termination. 

 

(a)          Notwithstanding
anything herein to the contrary, this Agreement may be terminated at any time at or prior to the Closing by Purchaser (with respect
to Purchaser only), upon a breach in any material respect by the Company of any covenant or agreement set forth in this Agreement.

 

(b)          Notwithstanding
anything herein to the contrary, this Agreement shall automatically terminate at any time at or prior to the Closing if a statute,
rule, order, decree or regulation shall have been enacted or promulgated, or if any action shall have been taken by any Governmental
Authority of competent jurisdiction that permanently restrains, permanently precludes, permanently enjoins or otherwise permanently
prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement
illegal.

 

(c)          In
the event of the termination of this Agreement as provided in this Section 8.14, this Agreement shall forthwith become null
and void. In the event of such termination, there shall be no liability on the part of any party hereto, except as set forth in
Article VI of this Agreement.

 

Section
8.15         Recapitalization, Exchange, Etc. The provisions of
this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect
of, in exchange for or in substitution of, the Shares, and shall be appropriately adjusted for combinations, unit splits, recapitalizations
and the like occurring after the date of this Agreement.

 

    	 	34	 

     

    

 

Section
8.16         Independent Nature of Purchasers’ Obligations and
Rights. The obligations of each Purchaser under the Transaction Documents are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser
under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser
pursuant hereto or thereto, shall be deemed to constitute the Purchasers as, and the Company acknowledges that the Purchasers do
not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group or entity with respect to such obligations or the transactions
contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Purchasers are not acting in concert
or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated
by the Transaction Documents. The decision of each Purchaser to purchase Shares pursuant to the Transaction Documents has been
made by such Purchaser independently of any other Purchaser. Each Purchaser acknowledges that no other Purchaser has acted as agent
for such Purchaser in connection with such Purchaser making its investment hereunder and that no other Purchaser will be acting
as agent of such Purchaser in connection with monitoring such Purchaser’s investment in the Shares or enforcing its rights
under the Transaction Documents. The Company and each Purchaser confirms that each Purchaser has independently participated with
the Company in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Purchaser
shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this
Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase and sale of the Shares contemplated
hereby was solely in the control of the Company, not the action or decision of any Purchaser, and was done solely for the convenience
of the Company and not because it was required or requested to do so by any Purchaser. It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely,
and not between the Company and the Purchasers collectively and not between and among the Purchasers.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 	35	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto
duly authorized.

 

	 	COMPANY:
	 	 
	 	AQUA METALS, INC.
	 	 
	 	By:	/s/ Stephen R. Clarke
	 	 	Stephen R. Clarke
	 	 	Chief Executive Officer

 

Signature
Page to

Stock
Purchase Agreement

 

     

     

    

 

IN WITNESS WHEREOF, Purchaser and the Company
have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

 

	PURCHASERS:

 

	For Entity Purchasers	           	For Individual Purchasers:
	 	 	 
	Print Name: ________________________________	 	Print Name: _________________________________
	 	 	 
	Signature:__________________________________	 	Signature:___________________________________
	 	 	 
	Name of Signatory: __________________________	 	Social Security # or Fed ID #:____________________
	 	 	 
	Title: _____________________________________	 	If Joint Investment, 2nd investor should complete:
	 	 	 
	Telephone No. ______________________________	 	Print Name:___________________________________
	 	 	 
	Facsimile Number: ___________________________	 	Signature:_____________________________________
	 	 	 
	E-mail Address: _____________________________	 	Social Security # or Fed ID #:_____________________
	 	 	 
	Social Security # or Fed ID #___________________	 	Telephone No. ______________________________
	 	 	 
	___________________________________________	 	Facsimile No. _______________________________
	Street Address	 	 
	 	 	E-mail Address: _____________________________
	___________________________________________	 	 
	Street Address – 2nd line	 	__________________________________________
	 	 	Street Address
	___________________________________________	 	 
	City, State, Zip	 	__________________________________________
	 	 	Street Address – 2nd line
	 	 	 
	 	 	__________________________________________
	 	 	City, State, Zip

 

    	 	2Exhibit 10.3

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (the “Agreement”) is made and entered into as of this 18th day of May, 2016 (the “Closing Date”)
by and among Aqua Metals, Inc., a Delaware corporation (the “Company”), and the “Investors” named in that
certain Stock Purchase Agreement by and among the Company and the Investors (the “Purchase Agreement”). Capitalized
terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

 

The parties hereby
agree as follows:

 

1.          Certain
Definitions.

 

As used in this Agreement,
the following terms shall have the following meanings:

 

“Investors”
means the Investors identified in the Purchase Agreement and any Affiliate or permitted transferee of any Investor who is a subsequent
holder of any Registrable Securities.

 

“Prospectus”
means (i) any prospectus (preliminary or final) included in any Registration Statement, as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration
Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated
by reference in such prospectus, and (ii) any “issuer free writing prospectus” as defined in Rule 433 under the 1933
Act.

 

“Register,”
“registered” and “registration” refer to a registration made by preparing and filing a Registration
Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness
of such Registration Statement or document.

 

“Registrable
Securities” means (i) the Shares and (ii) any other securities issued or issuable with respect to or in exchange for
the Shares, whether by merger, charter amendment, or otherwise; provided, that, a security shall cease to be a Registrable Security
upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security becoming eligible for sale
without restriction by the Investors pursuant to Rule 144.

 

“Registration
Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of
the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

“Required
Investors” means the Investors beneficially owning a majority of the Registrable Securities.

 

“SEC”
means the U.S. Securities and Exchange Commission.

 

     

     

    

 

“1933 Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“1934 Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

2.             Registration.

 

(a)           Registration
Statements.

 

(i)          Initial
Registration Statement. On or before August 1, 2016 (the “Filing Deadline”), the Company
shall prepare and file with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is not then available to the Company,
on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities),
covering the resale of the Registrable Securities. Subject to any SEC comments, such Registration Statement shall include the plan
of distribution attached hereto as Exhibit A; provided, however, that no Investor shall be named as an “underwriter”
in the Registration Statement without the Investor’s prior written consent, provided, further, any Investor who unreasonably
refuses to be named as an underwriter in the Registration Statement shall be excluded as a selling shareholder from the Registration
Statement. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends
or similar transactions with respect to the Registrable Securities. Such Registration Statement shall not include any shares of
Common Stock or other securities for the account of any other holder without the prior written consent of the Required Investors;
provided, however, that the Registration Statement may also include the Other Shares. The Registration Statement (and each amendment
or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section
3(c) to the Investors prior to its filing or other submission. If a Registration Statement covering the Registrable Securities
is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to each Investor, as liquidated
damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by such Investor pursuant to the Purchase
Agreement for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement
is filed with respect to the Registrable Securities. Such payments shall constitute the Investors’ exclusive monetary remedy
for such events, but shall not affect the right of the Investors to seek injunctive relief. Such payments shall be made to each
Investor in cash no later than three (3) Business Days after the end of each 30-day period.

 

(b)           Expenses.
The Company will pay all expenses associated with effecting the registration of the Registrable Securities, including filing and
printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities
for sale under applicable state securities laws, listing fees and the Investors’ other reasonable expenses in connection
with the registration, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable Securities being sold and excluding the fees and disbursements
of counsel to any Investor.

 

    	 	-2-	 

     

    

 

(c)           Effectiveness.

 

(i)          The
Company shall use commercially reasonable efforts to have any Registration Statement declared effective as soon as practicable.
The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four
(24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with copies of
any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.

 

(ii)         For
not more than forty (40) consecutive days or for a total of not more than sixty (60) days in any twelve (12) month period, the
Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event
that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material non-public
information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the
best interests of the Company or (B) amend or supplement the affected Registration Statement or the related Prospectus so that
such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances
under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (a) notify
each Investor in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of an Investor)
disclose to such Investor any material non-public information giving rise to an Allowed Delay, (b) advise the Investors in writing
to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts
to terminate an Allowed Delay as promptly as practicable.

 

(d)          Rule
415; Cutback If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a
Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933
Act or requires any Investor to be named as an “underwriter”, the Company shall use its best efforts to persuade the
SEC that the offering contemplated by a Registration Statement is a bona fide secondary offering and not an offering “by
or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter”. In the
event that, despite the Company’s best efforts and compliance with the terms of this Section 2(d), the SEC refuses to alter
its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable Securities (the “Cut
Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities
as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC
Restrictions”). Any cut-back imposed pursuant to this Section 2(d) shall be allocated among the Investors on a pro rata basis,
unless the SEC Restrictions otherwise require or provide or the Investors otherwise agree. Any cut-back imposed pursuant to a SEC
comment shall be applied, first, to securities of the Company that are registered pursuant to an agreement subsequent to the date
of this Agreement and, next, to the Registrable Securities, and, next, to the Registrable Securities and any securities registered
pursuant to an agreement entered into contemporaneously with (including those securities with registration rights of Interstate
Emerging Investments, LLC) and prior to the date of this Agreement, on a pro rata basis taken together. No liquidated damages shall
accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance
with any SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares). From and after the
Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the liquidated
damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline for the
Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date,
and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c)
shall be the 60th day immediately after the Restriction Termination Date.

 

    	 	-3-	 

     

    

 

(e)           Right
to Piggyback Registration.

 

(i)          If
at any time following the date of this Agreement that any Registrable Securities remain outstanding and are not freely tradable
under Rule 144 (A) there is not one or more effective Registration Statements covering all of the Registrable Securities and (B)
the Company proposes for any reason to register any shares of Common Stock under the 1933 Act (other than pursuant to a registration
statement on Form S-4 or Form S-8 (or a similar or successor form)) with respect to an offering of Common Stock by the Company
for its own account or for the account of any of its stockholders, it shall at each such time promptly give written notice to the
holders of the Registrable Securities of its intention to do so (but in no event less than thirty (30) days before the anticipated
filing date) and, to the extent permitted under the provisions of Rule 415 under the 1933 Act, include in such registration all
Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15)
days after receipt of the Company’s notice (a “Piggyback Registration”). Notwithstanding the foregoing, the aforementioned
piggyback registration rights will not apply to any demand registration right being exercised pursuant to that certain Investor
Rights Agreement entered into between the Company and Interstate Emerging Investments, LLC, of even date herewith, as it may be
amended.

 

(ii)         Notwithstanding
the foregoing, (A) if such registration involves an underwritten public offering, the Investors must sell their Registrable Securities
to, if applicable, the underwriter(s) at the same price and subject to the same underwriting discounts and commissions that apply
to the other securities sold in such offering (it being acknowledged that the Company shall be responsible for other expenses as
set forth in Section 2(b)) and subject to the Investors entering into customary underwriting documentation for selling stockholders
in an underwritten public offering, and (B) if, at any time after giving written notice of its intention to register any Registrable
Securities pursuant to Section 2(e)(i) and prior to the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to cause such registration statement to become effective under the
1933 Act, the Company shall deliver written notice to the Investors and, thereupon, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration; provided, however, that nothing contained in this Section 2(e)(ii)
shall limit the Company’s liabilities and/or obligations under this Agreement, including, without limitation, the obligation
to pay liquidated damages under this Section 2.

 

    	 	-4-	 

     

    

 

3.             Company
Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities
in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

 

(a)          use
commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for
a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration
Statement as amended from time to time, have been sold, (ii) the date on which all Registrable Securities covered by such Registration
Statement may be sold without restriction pursuant to Rule 144; or (iii) one year from the date of this Agreement (the “Effectiveness
Period”) and advise the Investors in writing when the Effectiveness Period has expired;

 

(b)          prepare
and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be
necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933
Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;

 

(c)          provide
copies to the Investors to review each Registration Statement and all amendments and supplements thereto no fewer than seven (7)
days prior to their filing with the SEC and not file any document to which such Investor reasonably objects;

 

(d)          use
commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if
such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

 

(e)          prior
to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with
the Investors in connection with the registration or qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such U.S. jurisdictions requested by the Investors and do any and all other commercially reasonable
acts or things necessary or advisable to enable the distribution in such U.S. jurisdictions of the Registrable Securities covered
by the Registration Statement; provided,
however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business
in any U.S. jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to
general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general
consent to service of process in any such jurisdiction;

 

(f)          use
commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

 

(g)          immediately
notify the Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any
event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing,
and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be
necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

    	 	-5-	 

     

    

 

(h)          otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934
Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment
thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investors in writing if, at any time during
the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investors
are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as
may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security
holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement
covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose
of this subsection 3(i), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that
includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the
Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter); and

 

(i)          With
a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company
covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144,
until such date as all of the Registrable Securities shall have been resold pursuant to a Registration Statement, Rule 144 or otherwise
in a transaction in which the transferee receives freely tradable shares; (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the 1934 Act; and (iii) furnish to each Investor upon request, as long as such
Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements
of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and
(C) such other information as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC
that permits the selling of any such Registrable Securities without registration. In the event that the Company fails to comply
with the requirements of this Section 3(i) after the 180th day after the Closing Date, the Company will make pro rata payments
to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by such
Investor pursuant to the Purchase Agreement for each 30-day period or pro rata for any portion thereof until such failure is cured;
provided, however, that only Investors that have not sold or otherwise disposed of all of their Registrable Securities prior to
such failure shall be entitled to receive liquidated damages pursuant to this Section 3(i). Such payments shall constitute the
Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive
relief. Such payments shall be made to each Investor in cash no later than three (3) Business Days after the end of each 30-day
period.

 

    	 	-6-	 

     

    

 

4.             Omitted.

 

5.             Obligations
of the Investors.

 

(a)          Each
Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company
shall notify each Investor of the information the Company requires from such Investor if such Investor elects to have any of the
Registrable Securities included in the Registration Statement. An Investor shall provide such information to the Company at least
two (2) Business Days prior to the first anticipated filing date of such Registration Statement if such Investor elects to have
any of the Registrable Securities included in the Registration Statement. In the event that an Investor does not provide such information
on a timely basis, the Company shall provide prompt written notice to such Investor that the Registrable Securities attributable
to such Investor will be excluded from the Registration Statement unless such Investor provides the required information within
one (1) Business Day after its receipt of such notice. If such Investor does not provide the required information to the Company
by the end of the next Business Day after its receipt of such notice, the Company shall have the right to exclude the Registrable
Securities attributable to such Investor from the Registration Statement and the Investor shall not be entitled to receive any
liquidated damages pursuant to the provisions of this Agreement with respect to such Registration Statement. Notwithstanding anything
in this Agreement to the contrary, any Investor that elects not to have any of its Registrable Securities included in the Registration
Statement, shall not be entitled to receive any liquidated damages pursuant to the provisions of this Agreement with respect to
such Registration Statement.

 

(b)          Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company
in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company
in writing of its election to exclude all of its Registrable Securities from such Registration Statement.

 

(c)          Each
Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to
Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such Investor will immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Investor
is advised by the Company that such dispositions may again be made.

 

    	 	-7-	 

     

    

 

6.             Indemnification.

 

(a)          Indemnification
by the Company. The Company will indemnify and hold harmless each Investor and its officers, directors, members, managers,
partners, trustees, employees and agents and other representatives, successors and assigns, and each other person, if any, who
controls such Investor within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several,
to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged
omission of any material fact contained in any Registration Statement, any Prospectus, or any amendment or supplement thereof;
(ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities
under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”);
(iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated
under the 1933 Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection
with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration
Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will
undertake such registration or qualification on an Investor’s behalf and will reimburse such Investor, and each such officer,
director or member and each such controlling person for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished
by such Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus.

 

(b)          Indemnification
by the Investors. Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning
of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from
any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement
or Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but
only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Investor
to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. In no
event shall the liability of an Investor be greater in amount than the dollar amount of the proceeds (net of all expenses paid
by such Investor in connection with any claim relating to this Section 6 and the amount of any damages such Investor has otherwise
been required to pay by reason of such untrue statement or omission) received by such Investor upon the sale of the Registrable
Securities included in the Registration Statement giving rise to such indemnification obligation.

 

    	 	-8-	 

     

    

 

(c)          Conduct
of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses
of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses,
or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory
to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest
exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further,
that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the
defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding
in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such claim or litigation. The indemnifying party shall not be liable hereunder
for any settlements entered into by an indemnified party without the indemnifying party’s prior written consent, which shall
not be unreasonably withheld, conditioned or delayed.

 

(d)          Contribution.
If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party
or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution
obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon
the sale of the Registrable Securities giving rise to such contribution obligation.

 

    	 	-9-	 

     

    

 

7.             Miscellaneous.

 

(a)          Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company
and the Required Investors.

 

(b)          Notices.
All notices and other communications provided for or permitted hereunder shall be made as set forth in Section
___ of the Purchase Agreement.

 

(c)          Assignments
and Transfers by Investors. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign, in whole or from time to time in part, to one
or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Investor to such person,
provided that such Investor complies with all laws applicable thereto and provides written notice of assignment to the Company
promptly after such assignment is effected.

 

(d)          Assignments
and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise)
without the prior written consent of the Required Investors; provided, however, that in the event that the Company is a
party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted
into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue
of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be
deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received
by the Investors in connection with such transaction unless such securities are otherwise freely tradable by the Investors after
giving effect to such transaction.

 

(e)          Benefits
of the Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. 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.

 

(f)          Counterparts;
Faxes. 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. This Agreement may be delivered via facsimile or other form of electronic
communication, which shall be deemed an original.

 

(g)          Titles
and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

(h)          Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted
as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable
in any respect.

 

    	 	-10-	 

     

    

 

(i)          Further
Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions
as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements
herein contained.

 

(j)          Entire
Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.
This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

(k)          Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District
Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices
under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action
or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST
A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

    	 	-11-	 

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first
above written.

 

	The Company:	AQUA METALS, INC.	 
	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	 	-12-	 

     

    

 

	 	 	 
	 	(Name of Investor)	 
	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

    	 	-13-	 

     

    

 

Exhibit A

 

Plan of Distribution

 

The selling stockholders,
which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests
in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common
stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

 

The selling stockholders
may use any one or more of the following methods when disposing of shares or interests therein:

 

		-	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		-	block trades in which the broker-dealer will attempt to sell the shares as agent, but may position
and resell a portion of the block as principal to facilitate the transaction;

 

		-	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		-	an exchange distribution in accordance with the rules of the applicable exchange;

 

		-	privately negotiated transactions;

 

		-	short sales effected after the date the registration statement of which this Prospectus is a part
is declared effective by the SEC;

 

		-	through the writing or settlement of options or other hedging transactions, whether through an
options exchange or otherwise;

 

		-	broker-dealers may agree with the selling stockholders to sell a specified number of such shares
at a stipulated price per share;

 

		-	a combination of any such methods of sale; and

 

		-	any other method permitted by applicable law.

 

    	 	-14-	 

     

    

 

The selling stockholders
may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of
common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.

 

In connection with
the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions
they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out
their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus
(as supplemented or amended to reflect such transaction).

 

The aggregate proceeds
to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents
from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents.
We will not receive any of the proceeds from this offering.

 

The selling stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of
1933, provided that they meet the criteria and conform to the requirements of that rule.

 

The selling stockholders
and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be "underwriters"
within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale
of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are "underwriters"
within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities
Act.

 

To the extent required,
the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer
will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement
that includes this prospectus.

 

In order to comply
with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered
or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified
for sale or an exemption from registration or qualification requirements is available and is complied with.

 

    	 	-15-	 

     

    

 

We have advised the
selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable we will make
copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under
the Securities Act.

 

We have agreed to indemnify
the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating
to the registration of the shares offered by this prospectus.

 

We have agreed with
the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier
of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration
statement or (2) the date on which all of the shares may be sold without restriction pursuant to Rule 144 of the Securities Act.

 

    	 	-16-

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