As filed with the U.S. Securities and Exchange Commission on September 12, 2017.
Registration No. 333-220128
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3
to
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Celcuity LLC
(to be converted into CELCUITY INC.)
(Exact name of registrant as specified in its charter)
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Delaware
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8071
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45-3811132
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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16305 36th Avenue N., Suite 450
Minneapolis, MN 55446
(763) 392-0123
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Brian F. Sullivan
Chief Executive Officer
16305 36th Avenue N., Suite 450
Minneapolis, MN 55446
(763) 392-0767
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Ryan C. Brauer
Eric O. Madson
Fredrikson & Byron, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, Minnesota 55402
(612) 492-7000
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W. Morgan Burns
Jonathan R. Zimmerman
Faegre Baker Daniels LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402
(612) 766-7000
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☒
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(Do not check if a smaller reporting company)
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Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered
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Amount to be
Registered
(1)
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Proposed Maximum
Aggregate Price
Per Share
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Proposed
Maximum Aggregate
Offering Price
(1)
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Amount of
Registration
Fee
(2)
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Common stock, $0.001 par value per share
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2,300,000
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$
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10.00
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$
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23,000,000
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$
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2,666
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(1)
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(a) under the Securities Act. Includes an aggregate of 300,000 shares issuable upon exercise of a 30-day option granted to the underwriter to cover over-allotments, if any.
(2)
Previously paid.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended (the “Securities Act”) or until the registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
Celcuity LLC, the registrant whose name appears on the cover page of this registration statement, is a Minnesota limited liability company. Celcuity LLC will convert into a Delaware corporation immediately prior to the effective time of the registration statement of which this prospectus is a part, and change its name from Celcuity LLC to Celcuity Inc. Shares of common stock of Celcuity Inc. are being offered by the prospectus that forms a part of this registration statement.
This Amendment No. 3 to Form S-1 Registration Statement (Registration No. 333-220128) of Celcuity LLC is being filed solely for the purpose of filing Exhibits 1.1, 2.1, 3.1, 3.2, 4.1, 4.2, 5.1, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.17, 23.1 and 23.2 to the Registration Statement. No changes or additions are being made hereby to the prospectus constituting Part I of the Registration Statement (not included herein) or to Part II of the Registration Statement, except for Item 16.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale of the common stock being registered. All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee and the Nasdaq listing fee.
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Expense
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Amount to be Paid
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SEC registration fee
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$
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2,666
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FINRA filing fee
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3,950
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Nasdaq listing fee
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50,000
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Accountants’ fees and expenses
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75,000
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Legal fees and expenses
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825,000
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Blue Sky fees and expenses
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—
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Transfer Agent fees and expenses
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11,600
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Printing expenses
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72,000
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Miscellaneous
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59,784
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TOTAL
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$
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1,100,000
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Item 14. Indemnification of Directors and Officers.
We plan to convert to a Delaware corporation prior to the effectiveness of this registration statement. Section 102(b)(7) of the Delaware General Corporation Law, or DGCL, provides that a Delaware corporation, in its certificate of incorporation, may limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability for any:
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transaction from which the director derived an improper personal benefit;
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act or omission not in good faith or that involved intentional misconduct or a knowing violation of law;
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unlawful payment of dividends or redemption of shares; or
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breach of the director’s duty of loyalty to the corporation or its stockholders.
Section 145(a) of the DGCL provides, in general, that a Delaware corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) because that person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, so long as the person acted in good faith and in a manner he or she reasonably believed was in or not opposed to the corporation’s best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Section 145(b) of the DGCL provides, in general, that a Delaware corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or in the right of the corporation to obtain a judgment in its favor because the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action, so long as the person acted in good faith and in a manner the person reasonably believed was in or not opposed to the corporation’s best interests, except
that no indemnification shall be permitted without judicial approval if a court has determined that the person is to be liable to the corporation with respect to such claim. Section 145(c) of the DGCL provides that, if a present or former director or officer has been successful in defense of any action referred to in Sections 145(a) and (b) of the DGCL, the corporation must indemnify such officer or director against the expenses (including attorneys’ fees) he or she actually and reasonably incurred in connection with such action.
Section 145(g) of the DGCL provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise against any liability asserted against and incurred by such person, in any such capacity, or arising out of his or her status as such, whether or not the corporation could indemnify the person against such liability under Section 145 of the DGCL.
Our certificate of incorporation and our bylaws will provide for the limitation of liability and indemnification of our directors and officers to the fullest extent permitted under the DGCL.
We also expect to enter into separate indemnification agreements with our directors and officers in addition to the indemnification provided for in our certificate of incorporation and bylaws. These indemnification agreements will provide, among other things, that we will indemnify our directors and officers for certain expenses, including damages, judgments, fines, penalties, settlements and costs and attorneys’ fees and disbursements, incurred by a director or officer in any claim, action or proceeding arising in his or her capacity as a director or officer of the company or in connection with service at our request for another corporation or entity. The indemnification agreements also provide for procedures that will apply in the event that a director or officer makes a claim for indemnification.
We also expect to maintain a directors’ and officers’ insurance policy pursuant to which our directors and officers are insured against liability for actions taken in their capacities as directors and officers.
We have entered into an underwriting agreement in connection with this offering, which provides for indemnification by the underwriter of us, our officers and directors, for certain liabilities, including liabilities arising under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item 15. Recent Sales of Unregistered Securities.
The following includes certain information regarding all securities sold by Celcuity within the past three years which were not registered under the Securities Act.
S
ales
of
M
embership
U
nits
and
W
arrants
in
P
rivate
P
lacements
In February 2014, we sold an aggregate of 44,444,444 common units representing membership interests in Celcuity LLC to Brightstone Venture Capital Fund, LP, or Brightstone, and The Globe Resources Group LLC, or Globe, at a price of $0.09 per unit, which would be approximately 1,111,111 shares at a price of $3.60 per share on a post-LLC Conversion basis.
During March 2014, we sold an aggregate of 8,333,340 common units representing membership interests in Celcuity LLC at a price of $0.10 per unit, which would be approximately 208,334 shares at a price of $4.14 per share on a post-LLC Conversion basis. Cedar Point Capital, LLC, or Cedar Point, served as a placement agent for a portion of the units sold in the offering. The aggregate commission paid to Cedar Point was $112,069.
In February 2015, we sold 1,666,667 common units representing membership interests in Celcuity LLC to Brightstone at a price of $0.09 per unit, which would be approximately 41,667 shares at a price of $3.60 per share on a post-LLC Conversion basis.
From December 2015 through January 2016, we sold an aggregate of 27,370,836 common units representing membership interests in Celcuity LLC at a price of $0.19 per unit, which would be approximately 684,271 shares at a price of $7.56 per share on a post-LLC Conversion basis. Cedar Point served as a placement agent in the offering. The aggregate cash commission paid to Cedar Point was $510,000. Cedar Point also received a 10-year warrant to purchase 1,348,708 common units representing membership interests with an exercise price of $0.19 per unit, which would be approximately 33,718 shares at a price of $7.56 per share on a post-LLC Conversion basis.
From March 2016 through May 2016, we sold an aggregate of 17,224,640 common units representing membership interests in Celcuity LLC at a price of $ 0.19 per unit, which would be approximately 430,616 shares at a price of $7.56 per share on a post-LLC Conversion basis. Cedar Point served as a placement agent in the offering. The aggregate cash commission paid to Cedar Point was $325,666. Cedar Point also received a 10-year warrant to purchase 861,232 common units representing membership interests with an exercise price of $0.19 per unit, which would be approximately 21,531 shares at a price of $7.56 per share on a post-LLC Conversion basis.
The February 2014 sales of membership units to Brightstone and Globe, and the February 2015 sale of membership units to Brightstone, were made in reliance upon exemption from the registration requirements pursuant to Section 4(a)(2) under the Securities Act. The offer and sale of all other securities listed in this subsection entitled “Sales of Membership Units and Warrants in Private Placements” was made to a limited number of accredited investors in reliance upon exemptions from the registration requirements pursuant to Section 4(a)(2) under the Securities Act and Regulation D promulgated under the Securities Act. There was no general solicitation or advertising with respect to the private placements and each of the purchasers provided written representations of an intent to acquire the securities for investment only and not with a view to or for sale in connection with any distribution of the securities. Restrictive legends were affixed to each of the certificates representing the units issued in the private placements.
S
ales
of
U
nsecured
C
onvertible
P
romissory
N
otes
in
P
rivate
P
lacements
During April 2017, we sold 1.25% Unsecured Convertible Promissory Notes with an aggregate principal amount of $5,750,000 that mature on December 31, 2018, or the April 2017 Notes. Cedar Point served as a placement agent in the offering. The aggregate cash commission paid to Cedar Point was $560,000. Cedar Point also received a 10-year warrant to purchase 1,330,040 common units representing membership interests with an exercise price of $0.21 per unit, which would be approximately 33,251 shares at a price of $8.42 per share on a post-LLC Conversion basis.
During May 2017, we sold 1.25% Unsecured Convertible Promissory Notes with an aggregate principal amount of $2,587,500 that mature on December 31, 2018, or the May 2017 Notes. Cedar Point served as a placement agent in the offering. The aggregate cash commission paid to Cedar Point was $258,000. Cedar Point also received a 10-year warrant to purchase 614,550 common units representing membership interests with an exercise price of $0.21 per unit, which would be approximately 15,364 shares at a price of $8.42 per share on a post-LLC Conversion basis.
The offer and sale of all securities listed in this section entitled “Sales of Unsecured Convertible Promissory Notes in Private Placements” was made to a limited number accredited investors in reliance upon exemptions from the registration requirements pursuant to Section 4(a)(2) under the Securities Act and Regulation D promulgated under the Securities Act. There was no general solicitation or advertising with respect to the private placements and each of the purchasers provided written representations of an intent to acquire the securities for investment only and not with a view to or for sale in connection with any distribution of the securities. Restrictive legends were affixed to the April 2017 Notes and May 2017 Notes issued in the private placements.
Item 16. Exhibits and Financial Statement Schedules.
(a)
Exhibits.
See the Exhibit Index immediately following the signature page to this prospectus, which is incorporated herein by reference.
(b)
Financial Statement Schedules.
All schedules have been omitted because the information required to be presented in them is not applicable or is shown in the financial statements or related notes included in this prospectus.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1)
The registrant will provide to the underwriter at the closing as specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(2)
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(3)
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(4)
For the purpose of determining liability under the Securities Act, each prospectus filed pursuant to Rule 424(b) as part of this registration statement other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in this registration statement as of the date it is first used after effectiveness.
Provided, however,
that no statement made in this registration statement or prospectus that is part of this registration statement or made in a document incorporated or deemed incorporated by reference into this registration statement or prospectus that is part of this registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in this registration statement or prospectus that was part of this registration statement or made in any such document immediately prior to such date of first use.
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(1)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 under the Securities Act;
(2)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(3)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(4)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 12
th
day of September, 2017.
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CELCUITY LLC
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By:
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/s/ Brian F. Sullivan
Brian F. Sullivan
Chief Executive Officer
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Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Brian F. Sullivan
Brian F. Sullivan
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Chief Executive Officer (Principal Executive Officer),
Director (Governor) and Chairman
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September 12, 2017
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/s/ Vicky Hahne
Vicky Hahne
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Chief Financial Officer (Principal Financial and
Accounting Officer)
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September 12, 2017
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*
Lance G. Laing
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Chief Science Officer, Vice President and Secretary,
and Director (Governor)
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September 12, 2017
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*
Maureen Cronin
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Director (Governor)
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September 12, 2017
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*
David F. Dalvey
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Director (Governor)
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September 12, 2017
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*
Richard J. Nigon
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Director (Governor)
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September 12, 2017
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*By:
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/s/ Brian F. Sullivan
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Brian F. Sullivan
Attorney-in-Fact
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EXHIBIT INDEX
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Exhibit
Number
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Description
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1.1
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Form of Underwriting Agreement
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2.1
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Form of Plan of Conversion
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3.1
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Certificate of Incorporation, to be in effect immediately prior to the completion of this offering
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3.2
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Bylaws, to be in effect immediately prior to the completion of this offering
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4.1
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Specimen Certificate representing shares of common stock of Celcuity Inc.
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4.2
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Form of Underwriter’s Warrant
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5.1
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Opinion of Fredrikson & Byron, P.A.
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10.1
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Celcuity Inc. 2017 Employee Stock Purchase Plan+
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10.2
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Celcuity Inc. 2017 Stock Incentive Plan+
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10.3
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Form of Stock Option Agreement pursuant to Celcuity Inc. 2017 Stock Incentive Plan+
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10.4
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Form of Restricted Stock Agreement pursuant to Celcuity Inc. 2017 Stock Incentive Plan+
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10.5
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Form of Restricted Stock Unit Agreement pursuant to Celcuity Inc. 2017 Stock Incentive Plan+
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10.6
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Form of Stock Appreciation Rights Agreement pursuant to Celcuity Inc. 2017 Stock Incentive Plan+
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10.7
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Celcuity LLC 2012 Equity Incentive Plan, adopted August 10, 2012, as amended by First Amendment to the Celcuity LLC 2012 Equity Incentive Plan, adopted November 12, 2015+†
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10.8
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Form of Incentive Plan Unit Option Agreement pursuant to the Celcuity LLC 2012 Equity Incentive Plan+†
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10.9
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Form of Warrant to Purchase Units of Membership Interest issued by Celcuity LLC to Cedar Point Capital, LLC, as placement agent of membership units and unsecured convertible promissory notes of Celcuity LLC†
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10.10
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Form of 1.25% Unsecured Convertible Promissory Note issued by Celcuity LLC†
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10.11
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Form of Warrant to Purchase Shares of Common Stock to be issued by Celcuity Inc. in connection with the conversion of 1.25% Unsecured Convertible Promissory Notes†
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10.12
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Commercial Lease, dated March 11, 2014, as amended by First Amendment to Commercial Lease, dated March 20, 2014, as amended by Second Amendment to Commercial Lease, dated August 31, 2016, by and between West Glen Development, LLC and Celcuity LLC†
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10.13
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Clinical Trial Agreement, dated May 8, 2017, between NSABP Foundation, Inc. and Celcuity LLC†
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10.14
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Confidentiality, Assignment of Inventions and Non-Competition Agreement, dated November 15, 2011, between Celcuity LLC and Brian F. Sullivan+†
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10.15
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Confidentiality, Assignment of Inventions and Non-Competition Agreement, dated November 15, 2011, between Celcuity LLC and Lance G. Laing+†
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10.16
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Confidentiality, Non-Compete and Proprietary Rights Agreement, dated May 17, 2017, between Celcuity LLC and Vicky Hahne+†
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10.17
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Form of Indemnification Agreement between Celcuity Inc. and each of its officers and directors†
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23.1
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Consent of Boulay PLLP
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23.2
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Consent of Fredrikson & Byron, P.A. (included in Exhibit 5.1)
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24.1
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Power of Attorney (included on signature page)†
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+
Management contract or compensatory plan.
†
Previously filed.
Exhibit 1.1
[
l
]
Shares
1
celcuity
Inc.
Common Stock, par value $0.001 per share
UNDERWRITING AGREEMENT
[
l
], 2017
craig-hallum
capital group llc
As Representative of the several Underwriters
Named in Schedule I hereto
c/o Craig-Hallum Capital Group LLC
222 South Ninth Street, Suite 350
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
Celcuity Inc., a Delaware
corporation (together with its predecessor entity, Celcuity LLC, a Minnesota limited liability company, in existence prior to conversion
to a Delaware corporation, the
“Company”
), proposes to sell to the several Underwriters named in Schedule
I hereto (the
“Underwriters”
) an aggregate of [
l
] authorized
but unissued shares (the
“Firm Shares”
) of Common Stock, par value $0.001 per share (the
“Common
Stock”
), of the Company. The Company also has granted to the several Underwriters an option to purchase up to [
l
]
additional shares of Common Stock on the terms and for the purposes set forth in Section 3 hereof (the
“Option
Shares”
). The Firm Shares and any Option Shares purchased pursuant to this Underwriting Agreement (this “
Agreement
”)
are herein collectively called the
“Securities.”
The Company hereby
confirms its agreement with respect to the sale of the Securities to the several Underwriters, for whom Craig-Hallum Capital Group
LLC is acting as representative (the
“Representative”
or
“you”
).
1.
Registration
Statement and Prospectus
. A registration statement on Form S-1 (File No. 333- 220128) with respect to the Securities,
including a preliminary form of prospectus, has been prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the
“Act”
), and the rules and regulations (
“Rules and Regulations”
)
of the Securities and Exchange Commission (the
“Commission”
) thereunder and has been filed with the Commission.
Such registration statement, including the amendments, exhibits and schedules thereto, as of the time it became effective, including
the Rule 430A Information (as defined below), is referred to herein at the
“Registration Statement
.
”
The Company will prepare and file a prospectus pursuant to Rule 424(b) of the Rules and Regulations that discloses the information
previously omitted from the prospectus in the Registration Statement in reliance upon Rule 430A of the Rules and Regulations,
which information will be deemed retroactively to be a part of the Registration Statement in accordance with Rule 430A of the Rules
and Regulations (
“Rule 430A Information”
). If the Company has elected to rely upon Rule 462(b) of
the Rules and Regulations to increase the size of the offering registered under the Act, the Company will prepare and file with
the Commission a registration statement with respect to such increase pursuant to Rule 462(b) of the Rules and Regulations
(such registration statement, including the contents of the Registration Statement incorporated by reference therein is the
“Rule
462(b) Registration Statement”
). References herein to the
“Registration Statement”
will
be deemed to include the Rule 462(b) Registration Statement at and after the time of filing of the Rule 462(b) Registration Statement.
“Preliminary Prospectus”
means any prospectus included in the Registration Statement prior to the effective
time of the Registration Statement, any prospectus filed with the Commission pursuant to Rule 424(a) under the Rules and Regulations
and each prospectus that omits Rule 430A Information used after the effective time of the Registration Statement.
“Prospectus”
means the prospectus that discloses the public offering price and other final terms of the Securities and the offering and otherwise
satisfies Section 10(a) of the Act. All references in this Agreement to the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement to any of the foregoing, is deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System or any successor system thereto (
“EDGAR”
).
1
Plus an
option to purchase up to [
l
] additional shares to cover over allotments.
All references herein
to the Registration Statement, any Preliminary Prospectus or a Prospectus shall be deemed as of any time to include the documents
and information incorporated therein by reference in accordance with the Rules and Regulations.
2.
Representations
and Warranties of the Company
.
(a)
Representations
and Warranties of the Company
. The Company represents and warrants to, and agrees with, the several Underwriters as follows:
(i)
Registration
Statement and Prospectuses
. The Registration Statement and any post-effective amendment thereto has become effective under
the Act. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been
issued, and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by the Commission.
No order preventing or suspending the use of any Preliminary Prospectus or the Prospectus (or any supplement thereto) has been
issued by the Commission and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened
by the Commission. As of the time each part of the Registration Statement (or any post-effective amendment thereto) became or becomes
effective, such part conformed or will conform in all material respects to the requirements of the Act and the Rules and Regulations.
Upon the filing or first use within the meaning of the Rules and Regulations, each Preliminary Prospectus and the Prospectus (or
any supplement to either) conformed or will conform in all material respects to the requirements of the Act and the Rules and Regulations.
All references to the Company’s “
knowledge
” will mean the actual knowledge of the Company’s
Chief Executive Officer, Chief Financial Officer and Chief Science Officer after reasonable investigation.
(ii)
Accurate
Disclosure
. Each Preliminary Prospectus, at the time of filing thereof or the time of first use within the meaning of the
Rules and Regulations, did not contain 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 light of the circumstances under which they were made, not misleading.
Neither the Registration Statement nor any amendment thereto, at the effective time of each part thereof, at the First Closing
Date (as defined below) or at the Second Closing Date (as defined below), contained, contains or will contain an untrue statement
of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. As of the Time of Sale (as defined below), neither (A) the Time of Sale Disclosure Package (as
defined below) nor (B) any issuer free writing prospectus (as defined below), when considered together with the Time of Sale Disclosure
Package, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. Neither the Prospectus nor any supplement thereto,
as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b) of the Rules and Regulations, at the
First Closing Date or at the Second Closing, included, includes or will include an untrue statement of a material fact or omitted,
omits or will omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The representations and warranties in this Section 2(a)(ii) shall not apply to statements
in or omissions from any Preliminary Prospectus, the Registration Statement (or any amendment thereto), the Time of Sale Disclosure
Package or the Prospectus (or any supplement thereto) made in reliance upon, and in conformity with, written information furnished
to the Company by you, or by any Underwriter through you, specifically for use in the preparation of such document, it being understood
and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section
6(e).
“Time of Sale Disclosure
Package”
means the Preliminary Prospectus dated [
l
], 2017 and the information
on Schedule III, all considered together.
Each reference to a
“free
writing prospectus”
herein means a free writing prospectus as defined in Rule 405 of the Rules and Regulations.
“Time of Sale”
means [
l
] [a/p].m. (New York City time) on the date of this Agreement.
(iii)
No
Other Offering Materials
. The Company has not distributed and will not distribute any prospectus or other offering material
in connection with the offering and sale of the Securities other than any Preliminary Prospectus, the Time of Sale Disclosure Package
or the Prospectus or other materials permitted by the Act to be distributed by the Company
;
provided, further, that the Company has not made and will not make any offer relating to the Securities that would constitute a
free writing prospectus
and, except as set forth on Schedule IV, the Company
has not made and will not make any communication relating to the Securities that would constitute a Testing-the-Waters Communication
(as defined below), except in accordance with the provisions of Section 2(a)(v) of this Agreement
.
(iv)
Emerging
Growth Company
.
From the time of initial confidential submission of the Registration
Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized
to act on its behalf in any Testing-the-Waters Communication (as defined below)) through the date hereof, the Company has been
and is an “emerging growth company,” as defined in Section 2(a) of the Act (an
“Emerging Growth
Company”
).
“Testing-the-Waters Communication”
means any oral or written communication
with potential investors undertaken in reliance on Section 5(d) of the Act
.
(v)
Testing-the-Waters
Materials
. The Company (i) has not alone engaged in any Testing-the-Waters Communications, other than Testing-the-Waters
Communications with the prior consent of the Representative with entities that are qualified institutional buyers within the meaning
of Rule 144A under the Act or institutions that are accredited investors within the meaning of Rule 501 under the Act
and (ii) has not authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company
has not distributed any Written Testing-the-Waters Communications (as defined below) other than those listed on Schedule IV
hereto.
“Written Testing-the-Waters Communication”
means any Testing-the-Waters Communication
that is a written communication within the meaning of Rule 405 under the Act. Any individual Written Testing-the-Waters Communication
does not conflict with the information contained in the Registration Statement or the Time of Sale Disclosure Package, complied
in all material respects with the Act, and when taken together with the Time of Sale Disclosure Package as of the Applicable Time,
did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(vi)
Financial
Statements
. The financial statements of the Company, together with the related notes, set forth in the Registration Statement,
the Time of Sale Disclosure Package and Prospectus comply in all material respects with the requirements of the Act and the Rules
and Regulations and fairly present in all material respects the financial condition of the Company and its consolidated subsidiaries
as of the dates indicated and the results of operations, cash flows and changes in stockholders’ equity for the periods therein
specified. The financial statements of the Company, together with the related notes, set forth in the Registration Statement, the
Time of Sale Disclosure Package and Prospectus are in conformity with generally accepted accounting principles in the United States
(
“GAAP”
) consistently applied throughout the periods involved (except as described therein and subject,
in the case of the unaudited financial statements, to year-end adjustments). The supporting schedules of the Company included in
the Registration Statement present fairly the information required to be stated therein. All non-GAAP financial information included
in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus complies with the requirements of Regulation
G and Item 10 of Regulation S-K under the Act. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, there are no material off-balance sheet arrangements (as defined in Regulation S-K under the Act, Item 303(a)(4)(ii)).
No other financial statements or schedules are required to be included in the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus. To the Company’s knowledge, Boulay PLLP, which has expressed its opinion with respect to the financial
statements of the Company and related schedules filed as a part of the Registration Statement and included in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, is (x) an independent public accounting firm within the meaning
of the Act and the Rules and Regulations, (y) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley
Act of 2002 (the
“Sarbanes-Oxley Act”
)) and (z) not in violation of the auditor independence requirements
of the Sarbanes-Oxley Act.
(vii)
Organization
and Good Standing
. Each of the Company and its subsidiaries has been duly organized and is validly existing as an entity
in good standing under the laws of its jurisdiction of organization. Each of the Company and its subsidiaries has full corporate
power and authority to own its properties and conduct its business as currently being carried on and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and is duly qualified to do business as a foreign entity in
good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would have a material adverse effect upon the business, prospects, management, properties, operations, condition (financial or otherwise)
or results of operations of the Company and its subsidiaries, taken as a whole (
“Material Adverse Effect”
).
(viii)
Absence
of Certain Events
. Except as contemplated in the Registration Statement, the Time of Sale Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which information is given in the Time of Sale Disclosure Package, neither
the Company nor any of its subsidiaries has incurred any material liabilities or obligations, direct or contingent, or entered
into any material transactions, or declared or paid any dividends or made any distribution of any kind with respect to its capital
stock; and there has not been any change in the capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or warrants or conversion of convertible securities),
or any material change in the short-term or long-term debt (other than as a result of the conversion of convertible securities),
or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock, of the Company or
any of its subsidiaries, or any material adverse change in the general affairs, condition (financial or otherwise), business,
prospects, management, properties, operations or results of operations
of the Company and its subsidiaries, taken as a whole (
“Material Adverse Change”
) or any development
which would reasonably be expected to result in any Material Adverse Change.
(ix)
Absence
of Proceedings
. Except as set forth in the Time of Sale Disclosure Package and in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened or contemplated, any action, suit or proceeding (a) to which the Company or any
of its subsidiaries is a party or (b) which has as the subject thereof any officer or, to the Company’s knowledge, director
of the Company or any subsidiary, any employee benefit plan sponsored by the Company or any subsidiary or any property or assets
owned or leased by the Company or any subsidiary before or by any court or Governmental Authority (as defined below), or any arbitrator,
which, individually or in the aggregate, might result in any Material Adverse Change, or would materially and adversely affect
the ability of the Company to perform its obligations under this Agreement or the Representative’s Warrant (as defined below)
or which are otherwise material in the context of the sale of the Securities. There are no current or, to the knowledge of the
Company, pending, legal, governmental or regulatory actions, suits or proceedings (x) to which the Company or any of its subsidiaries
is subject or (y) which has as the subject thereof any officer or director of the Company or any subsidiary, any employee plan
sponsored by the Company or any subsidiary or any property or assets owned or leased by the Company or any subsidiary, that are
required to be described in the Registration Statement, Time of Sale Disclosure Package and Prospectus by the Act or by the Rules
and Regulations and that have not been so described.
(x)
Authorization;
No Conflicts; Authority
. This Agreement has been duly authorized, executed and delivered by the Company. The Representative’s
Warrant has been duly authorized and, at the First Closing Date and, if applicable, the Second Closing Date, will be duly executed
and delivered by the Company. This Agreement constitutes, and the Representative’s Warrant will constitute at the First Closing
Date and, if applicable, the Second Closing Date, a valid, legal and binding obligation of the Company, enforceable in accordance
with its terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject
to general principles of equity. The execution, delivery and performance of this Agreement and the Representative’s Warrant
and the consummation of the transactions herein contemplated will not (A) conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject,
(B) result in any violation of the provisions of the Company’s charter or bylaws or (C) result in the violation of any law
or statute or any judgment, order, rule, regulation or decree of any court or arbitrator or federal, state, local or foreign governmental
agency or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets
(each, a
“Governmental Authority”
), except in the case of clause (A) as would not result in a Material
Adverse Effect. No consent, approval, authorization or order of, or registration or filing with any Governmental Authority is required
for the execution, delivery and performance of this Agreement or the Representative’s Warrant or for the consummation of
the transactions contemplated hereby, including the issuance or sale of the Securities by the Company or the issuance of shares
of Common Stock upon the exercise of the Representative’s Warrant, except such as may be required under the Act, the rules
of the Financial Industry Regulatory Authority, Inc. (
“FINRA”
), The NASDAQ Stock Market Rules or state
securities or blue sky laws; and the Company has full power and authority to enter into this Agreement and the Representative’s
Warrant and to consummate the transactions contemplated hereby, including the authorization, issuance and sale of the Securities
as contemplated by this Agreement and the issuance of shares of Common Stock upon the exercise of the Representative’s Warrant.
(xi)
Capitalization;
the Securities; Registration Rights
. All of the issued and outstanding shares of capital stock of the Company, including
the outstanding shares of Common Stock, are duly authorized and validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities that have not been waived in writing (a copy of which has been delivered to
counsel to the Underwriters), and the holders thereof are not subject to personal liability by reason of being such holders; the
Securities which may be sold hereunder by the Company and the shares of Common Stock which may be sold pursuant to the Representative’s
Warrant have been duly authorized and, when issued, delivered and paid for in accordance with the terms of this Agreement and the
Representative’s Warrant (as applicable), will have been validly issued and will be fully paid and nonassessable, and the
holders thereof will not be subject to personal liability by reason of being such holders; and the capital stock of the Company,
including the Common Stock, conforms to the description thereof in the Registration Statement, in the Time of Sale Disclosure Package
and in the Prospectus. Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure Package and in
the Prospectus, (A) there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon
the voting or transfer of, any shares of Common Stock pursuant to the Company’s charter, bylaws or any agreement or other
instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound,
(B) none of the filing of the Registration Statement, the offering, the sale of the Securities or the Representative’s Warrant
as contemplated by this Agreement, or the issuance of shares of Common Stock upon exercise of the Representative’s Warrant,
give rise to any rights for or relating to the registration of any shares of Common Stock or other securities of the Company (collectively
“Registration Rights”
) and (C) any person to whom the Company has granted Registration Rights has
agreed not to exercise such rights until after expiration of the Lock-Up Period (as defined below). All of the issued and outstanding
shares of capital stock of each of the Company’s subsidiaries have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise described in the Registration Statement, in the Time of Sale Disclosure Package
and in the Prospectus, the Company owns of record and beneficially, free and clear of any security interests, claims, liens, proxies,
equities or other encumbrances, all of the issued and outstanding shares of such stock. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus under the
caption “Description of Capital Stock.” The Common Stock (including the Securities) conforms in all material respects
to the description thereof contained in the Time of Sale Disclosure Package and the Prospectus.
(xii)
Stock
Options
. Except as described in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus,
there are no options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company or any
subsidiary of the Company any shares of the capital stock of the Company or any subsidiary of the Company. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements (the
“Company Stock Plans”
),
and the options (the
“Options”
) or other rights granted thereunder, set forth in the Time of Sale Disclosure
Package and the Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements,
options and rights. Each grant of an Option (A) was duly authorized no later than the date on which the grant of such Option was
by its terms to be effective by all necessary corporate action, including, as applicable, approval by the board of directors of
the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number
of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party
thereto and (B) was made in accordance with the terms of the applicable Company Stock Plan, and all applicable laws and regulatory
rules or requirements, including all applicable federal securities laws.
(xiii)
Compliance
with Laws
. The Company and each of its subsidiaries holds, and is operating in compliance in all material respects with,
all material franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental
Authority or self-regulatory body required for the conduct of its business and all such franchises, grants, authorizations, licenses,
permits, easements, consents, certifications and orders are valid and in full force and effect; and neither the Company nor any
of its subsidiaries has received written, or to the Company’s knowledge, oral notice of any revocation or modification of
any such franchise, grant, authorization, license, permit, easement, consent, certification or order or has reason to believe that
any such franchise, grant, authorization, license, permit, easement, consent, certification or order will not be renewed in the
ordinary course; and the Company and each of its subsidiaries is in compliance in all material respects with all applicable federal,
state, local and foreign laws, regulations, orders and decrees.
(xiv)
Ownership
of Assets
. The Company and its subsidiaries have good and marketable title to all property (whether real or personal) described
in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus as being owned by them, in each case
free and clear of all liens, claims, security interests, other encumbrances or defects except such as are described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus. The property held under lease by the Company and its subsidiaries
is held by them under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as
do not interfere in any material respect with the conduct of the business of the Company or its subsidiaries.
(xv)
Intellectual
Property
.
(A) The
Company and each of its subsidiaries owns or has the right to use pursuant to a valid and enforceable written license or other
legally enforceable right, or can acquire on commercially reasonable terms, all Intellectual Property (as defined below) necessary
for the conduct of the Company’s and its subsidiaries’ businesses as now conducted or as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus to be conducted, except as such failure to own, right to use
or acquire such rights would not result in a Material Adverse Effect (the
“Company IP”
).
“Intellectual
Property”
means all patents, patent applications, trade and service marks, trade and service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets, domain names, technology, know-how and other intellectual property.
(B) To
the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any Company IP, except
for as such infringement, misappropriation or violation that would not result in a Material Adverse Effect. There is no pending
or, to the knowledge of the Company, threatened, action, suit, proceeding or claim by others challenging the Company’s or
its subsidiaries’ rights in or to any Company IP, and the Company is unaware of any facts which would form a reasonable basis
for any such claim. The Intellectual Property owned by the Company and its subsidiaries, and to the knowledge of the Company, the
Intellectual Property licensed to the Company and its subsidiaries, has not been adjudged invalid or unenforceable, in whole or
in part, and there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Company IP, and the Company is unaware of any facts which would form a reasonable basis for any such
claim. There is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others that the
Company or its subsidiaries infringe, misappropriate or otherwise violate any Intellectual Property or other proprietary rights
of others, and neither the Company nor any of its subsidiaries has received any written notice of such claim and the Company is
unaware of any other fact which would form a reasonable basis for any such claim.
(C) To
the Company’s knowledge, no employee of the Company or any of its subsidiaries is in or has ever been in material violation
of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of
such violation relates to such employee’s employment with the Company or any of its subsidiaries or actions undertaken by
the employee while employed with the Company or any of its subsidiaries.
(D) The
Company and its subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value
of all of their material Intellectual Property.
(E)
All
patent applications owned by the Company or its subsidiaries and filed with the U.S. Patent and Trademark Office (the
“PTO”
)
or any foreign or international patent authority that have resulted in patents or currently pending applications that describe
inventions necessary to conduct the business of the Company or its subsidiaries as now conducted or as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus to be conducted (collectively, the
“Company Patent
Applications”
) have been or were duly and properly filed.
(F)
The
Company and its subsidiaries have complied with their duty of candor and disclosure to the PTO for the Company Patent Applications.
To the Company’s knowledge, there are no facts required to be disclosed to the PTO that were not disclosed to the PTO and
which would preclude the grant of a patent for the Company Patent Applications.
The
Company
has no knowledge of any facts which would preclude it or its applicable subsidiary from having clear title to the Company Patent
Applications that have been identified by the Company as being exclusively owned by the Company or one of its subsidiaries.
(xvi)
No
Violations or Defaults
. Neither the Company nor any of its subsidiaries is in violation of its respective charter, bylaws
or other organizational documents, or in breach of or otherwise in default, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default in the performance of any material obligation, agreement or condition contained
in any bond, debenture, note, indenture, loan agreement or any other material contract, lease or other instrument to which it is
subject or by which any of them may be bound, or to which any of the material property or assets of the Company or any of its subsidiaries
is subject.
(xvii)
Taxes
.
The Company and its subsidiaries have timely filed all federal, state, local and foreign income and franchise tax returns required
to be filed (except where the failure to make such timely filing would not be material) and are not in default in the payment of
any taxes which were payable pursuant to said returns or any assessments with respect thereto, other than any which the Company
or any of its subsidiaries is contesting in good faith. There is no pending dispute with any taxing authority relating to any of
such returns, and the Company has no knowledge of any proposed liability for any tax to be imposed upon the properties or assets
of the Company or any of its subsidiaries for which there is not an adequate reserve reflected in the Company’s financial
statements included in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
(xviii)
Exchange
Listing and Exchange Act Registration
. The
Securities
have been approved for listing on the Nasdaq Capital Market upon official notice of issuance and, on the date the Registration
Statement became effective, the Company’s Registration Statement on Form 8-A or other applicable form under the Securities
Exchange Act of 1934, as amended (the
“Exchange Act”
), became effective
. Except as previously
disclosed to counsel for the Underwriters or as set forth in the Time of Sale Disclosure Package and the Prospectus, there are
no affiliations with members of FINRA among the Company’s officers or directors or, to the knowledge of the Company, any
five percent or greater stockholders of the Company or any beneficial owner of the Company’s unregistered equity securities
that were acquired during the 180-day period immediately preceding the initial filing date of the Registration Statement. The Company
is currently in compliance in all material respects with the applicable requirements of the Nasdaq Capital Market for maintenance
of inclusion of the Common Stock thereon.
(xix)
Ownership
of Other Entities
. Other than the subsidiaries of the Company listed in Exhibit 21.1 to the Registration Statement
or as otherwise disclosed in the Registration Statement, Time of Sale Disclosure Package and Prospectus, the Company, directly
or indirectly, owns no capital stock or other equity or ownership or proprietary interest in any corporation, partnership, association,
trust or other entity.
(xx)
Internal
Controls
. The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed in the Registration Statement, in the Time of Sale Disclosure Package
and in the Prospectus, the Company’s internal control over financial reporting is effective and none of the Company, its
board of directors, its audit committee or its Chief Executive Officer are aware of any “significant deficiencies”
or “material weaknesses” (each as defined by the Public Company Accounting Oversight Board) in its internal control
over financial reporting, or any fraud, whether or not material, that involves management or other employees of the Company or
its subsidiaries who have a significant role in the Company’s internal controls; and since the end of the latest audited
fiscal year, there has been no change in the Company’s internal control over financial reporting (whether or not remediated)
that has materially adversely affected, or is reasonably likely to materially adversely affect, the Company’s internal control
over financial reporting[
; provided, however, that none of the foregoing shall constitute
a representation as to the Company’s compliance with Section 404 of the Sarbanes-Oxley Act and the rules and regulations
of the Commission thereunder].
The Company’s board of directors has, subject to the exceptions, cure periods and the
phase-in periods specified in the applicable stock exchange rules (
“Exchange Rules”
), validly appointed
an audit committee to oversee internal accounting controls whose composition satisfies the applicable requirements of the Exchange
Rules and the Company’s board of directors and/or the audit committee has adopted a charter that satisfies the requirements
of the Exchange Rules.
(xxi)
No
Brokers or Finders
. Other than as contemplated by this Agreement, the Company has not incurred and will not incur any liability
for any finder’s or broker’s fee or agent’s commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(xxii)
Insurance
.
The Company and each of its subsidiaries carries, or is covered by, insurance from reputable insurers in such amounts and covering
such risks as the Company reasonably believes is adequate for the conduct of its business and the value of its properties and the
properties of its subsidiaries and as is customary for companies engaged in similar businesses in similar industries; all policies
of insurance and any fidelity or surety bonds insuring the Company or any of its subsidiaries or its business, assets, employees,
officers and directors are, to the Company’s knowledge, in full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all material respects; there are no material claims by the Company
or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought
or applied for; and neither the Company nor any of its subsidiaries has reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse Effect.
(xxiii)
Investment
Company Act
. The Company is not and, after giving effect to the offering and sale of the Securities, will not be an “investment
company,” as such term is defined in the Investment Company Act of 1940, as amended.
(xxiv)
Sarbanes-Oxley
Act
. The Company is in material compliance with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations
of the Commission thereunder.
(xxv)
Disclosure
Controls
. The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-14 and
15d-14 under the Exchange Act) and such controls and procedures are effective in ensuring that material information relating
to the Company, including its subsidiaries, is made known to the principal executive officer and the principal financial
officer and such controls and procedures are effective to perform the functions for which they were established. The Company
has utilized such controls and procedures in preparing and evaluating the disclosures in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus.
(xxvi)
Anti-Bribery
and Anti-Money Laundering Laws
. Each of the Company, its subsidiaries, and, to the Company’s knowledge, its affiliates
and any of their respective officers, directors, supervisors, managers, agents, or employees, has not violated, its participation
in the offering will not violate, and the Company and each of its subsidiaries has instituted and maintains policies and procedures
designed to ensure continued compliance with, each of the following laws: (A) anti-bribery laws, including but not limited to,
any applicable law, rule, or regulation of any locality, including but not limited to any law, rule, or regulation promulgated
to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed
December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act 2010, or any
other law, rule or regulation of similar purposes and scope or (B) anti-money laundering laws, including but not limited to, applicable
federal, state, international, foreign or other laws, regulations or government guidance regarding anti-money laundering, including,
without limitation, Title 18 US. Code section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money
laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money
Laundering, of which the United States is a member and with which designation the United States representative to the group or
organization continues to concur, all as amended, and any executive order, directive, or regulation pursuant to the authority of
any of the foregoing, or any orders or licenses issued thereunder. The Company has instituted, maintains and enforces policies
and procedures designed to ensure compliance with any-bribery laws.
(xxvii)
OFAC
.
(A) Neither
the Company nor any of its subsidiaries, nor any or their directors, officers or employees, nor, to the Company’s knowledge,
any agent, affiliate or representative of the Company or its subsidiaries, is an individual or entity that is, or is owned or controlled
by an individual or entity that is:
(1) the
subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control,
the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively,
“Sanctions”
), nor
(2) located,
organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, the Crimea Region
of the Ukraine, Cuba, Iran, North Korea, Sudan and Syria).
(B) Neither
the Company nor any of its subsidiaries will, directly or indirectly, use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity:
(1) to
fund or facilitate any activities or business of or with any individual or entity or in any country or territory that, at the time
of such funding or facilitation, is the subject of Sanctions; or
(2) in
any other manner that will result in a violation of Sanctions by any individual or entity (including any individual or entity participating
in the offering, whether as underwriter, advisor, investor or otherwise).
(C) For
the past five years, neither the Company nor any of its subsidiaries has knowingly engaged in, and is not now knowingly engaged
in, any dealings or transactions with any individual or entity, or in any country or territory, that at the time of the dealing
or transaction is or was the subject of Sanctions.
(xxviii)
Compliance
with Environmental Laws
. Except as disclosed in the Registration Statement, the Time of Disclosure Package and the Prospectus,
neither the Company nor any of its subsidiaries is in material violation of any statute, any rule, regulation, decision or order
of any Governmental Authority or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively,
“Environmental Laws”
), to the Company’s knowledge, owns or operates any real property contaminated
with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to
any Environmental Laws, or is subject to any claim relating to any Environmental Laws, which violation, contamination, liability
or claim would individually or in the aggregate, have a Material Adverse Effect; and the Company is not aware of any pending investigation
which might lead to such a claim. Neither the Company nor any of its subsidiaries anticipates incurring any material capital expenditures
relating to compliance with Environmental Laws.
(xxix)
Compliance with Occupational Laws
. The Company and each of its subsidiaries (A) is in compliance, in all material
respects, with any and all applicable foreign, federal, state and local laws, rules, regulations, treaties, statutes and codes
promulgated by any and all Governmental Authorities (including pursuant to the Occupational Health and Safety Act) relating to
the protection of human health and safety in the workplace (
“Occupational Laws”
); (B) has received all
material permits, licenses or other approvals required of it under applicable Occupational Laws to conduct its business as currently
conducted; and (C) is in compliance, in all material respects, with all terms and conditions of such permit, license or approval.
No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries relating to Occupational Laws, and the Company does not have knowledge of any facts,
circumstances or developments relating to its operations or cost accounting practices that would reasonably be expected to form
the basis for or give rise to such actions, suits, investigations or proceedings and would reasonably be expected to have a Material
Adverse Effect.
(xxx)
ERISA
and Employee Benefits Matters
. (A) To the knowledge of the Company, no “prohibited transaction” as defined
under Section 406 of ERISA or Section 4975 of the Code and not exempt under ERISA Section 408 and the regulations and published
interpretations thereunder has occurred with respect to any Employee Benefit Plan. At no time has the Company or any ERISA Affiliate
maintained, sponsored, participated in, contributed to or has or had any liability or obligation in respect of any Employee Benefit
Plan subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA, or Section 412 of the Code or any “multiemployer
plan” as defined in Section 3(37) of ERISA or any multiple employer plan for which the Company or any ERISA Affiliate has
incurred or could incur liability under Section 4063 or 4064 of ERISA. No Employee Benefit Plan provides or promises, or at any
time provided or promised, retiree health, life insurance, or other retiree welfare benefits except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law. Each Employee Benefit Plan is and has
been operated in material compliance with its terms and all applicable laws, including but not limited to ERISA and the Code and,
to the knowledge of the Company, no event has occurred (including a “reportable event” as such term is defined in
Section 4043 of ERISA) and no condition exists that would subject the Company or any ERISA Affiliate to any material tax, fine,
lien, penalty or liability imposed by ERISA, the Code or other applicable law. Each Employee Benefit Plan intended to be qualified
under Code Section 401(a) is so qualified and has a favorable determination or opinion letter from the IRS upon which it can rely,
and any such determination or opinion letter remains in effect and has not been revoked; to the knowledge of the Company, nothing
has occurred since the date of any such determination or opinion letter that is reasonably likely to adversely affect such qualification;
(B) with respect to each Foreign Benefit Plan, such Foreign Benefit Plan (1) if intended to qualify for special tax treatment,
meets, in all material respects, the requirements for such treatment, and (2) if required to be funded, is funded to the extent
required by applicable law, and with respect to all other Foreign Benefit Plans, adequate reserves therefor have been established
on the accounting statements of the applicable Company or subsidiary; (C) the Company does not have any obligations under any
collective bargaining agreement with any union and no organization efforts are underway with respect to Company employees. As
used in this Agreement,
“Code”
means the Internal Revenue Code of 1986, as amended;
“Employee
Benefit Plan”
means any “employee benefit plan” within the meaning of Section 3(3) of ERISA, including,
without limitation, all stock purchase, stock option, stock-based severance, employment, change-in-control, medical, disability,
fringe benefit, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA, under which (x) any current or former employee, director or independent
contractor of the Company or its subsidiaries has any present or future right to benefits and which are contributed to, sponsored
by or maintained by the Company or any of its respective subsidiaries or (y) the Company or any of its subsidiaries has had or
has any present or future obligation or liability;
“ERISA”
means the Employee Retirement Income Security
Act of 1974, as amended;
“ERISA Affiliate”
means any member of the company’s controlled group
as defined in Code Section 414(b), (c), (m) or (o); and
“Foreign Benefit Plan”
means any Employee Benefit
Plan established, maintained or contributed to outside of the United States of America or which covers any employee working or
residing outside of the United States.
(xxxi)
Business Arrangements
. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, neither the Company nor any of its subsidiaries has granted any material rights to develop, manufacture, produce,
assemble, distribute, license, market or sell its products to any other person and is not bound by any material agreement that
affects the exclusive right of the Company or such subsidiary to develop, manufacture, produce, assemble, distribute, license,
market or sell its products.
(xxxii)
Labor
Matters
. To the Company’s knowledge, no labor problem or dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, that would reasonably be
expected to have a Material Adverse Effect.
(xxxiii)
Statistical
Information
. Any third-party statistical and market-related data included in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate
in all material respects.
(xxxiv)
Forward-looking
Statements
. No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the
Exchange Act) contained in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(xxxv)
Regulatory
Compliance
.
Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
the Company (A) has not received any unresolved FDA Form 483, notice of observations, warning letter, untitled letter
or other written correspondence from the U.S. Food and Drug Administration (“
FDA
”), or any other court
or arbitrator or federal, state, local or foreign governmental or regulatory authority, alleging or asserting noncompliance with
the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301
et seq
.); (B) is and has been in material compliance
with applicable health care laws, including without limitation, the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301
et
seq
.), the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the civil False Claims Act (31 U.S.C. §§
3729
et seq
.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Physician Payment Sunshine
Act ( 42 U.S.C. § 1320a-7h), the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the Health Insurance Portability
and Accountability Act of 1996 (42 U.S.C. § 1320d
et seq
.), as amended by the Health Information Technology for
Economic and Clinical Health Act of 2009, the exclusion laws, Social Security Act § 1128 (42 U.S.C. § 1320a-7), Medicare
program laws (including Title XVIII of the Social Security Act), Medicaid programs laws (including Title XIX of the Social Security
Act), and the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation
Act of 2010, and the regulations promulgated pursuant to such laws, and comparable state laws applicable to the Company (collectively,
“
Health Care Laws
”); (C) possesses all material licenses, certificates, registrations, approvals,
clearances, authorizations, permits and supplements or amendments thereto required by any such Health Care Laws and/or to carry
on its businesses as now conducted (“
Authorizations
”) and such Authorizations are valid and in full
force and effect and the Company is not in material violation of any term of any such Authorizations; (D) has not received
written notice of any ongoing claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action
from any Governmental Authority or third party alleging that any product operation or activity is in material violation of any
Health Care Laws or Authorizations and has no knowledge that any such Governmental Authority or third party is considering any
such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received written notice that
any Governmental Authority has taken, is taking or intends to take action to suspend, revoke or restrict any Authorizations and
has no knowledge that any such Governmental Authority is considering such action; (F) has filed, obtained, maintained or
submitted all material reports, schedules, statements, filings, registrations, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments thereto as required by any Health Care Laws or Authorizations and that all such
reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and
correct on the date filed (or were corrected or supplemented by a subsequent submission); (G) has not, either voluntarily
or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal
or replacement, safety alert, “dear doctor” letter, or other notice or action relating to the alleged lack of safety
or efficacy of any product or any alleged product defect or violation and, to the Company’s knowledge, no third party has
initiated or conducted any such notice or action; (H) is not party to any corporate integrity agreement, deferred prosecution
agreement, monitoring agreement, consent decree, settlement order, or similar agreements, or have any reporting obligations pursuant
to any such agreement, plan or correction or other remedial measure entered into with any Governmental Authority; (I) has
not been convicted of any criminal offense relating to the delivery of any item or service reimbursable under a federal or state
health care program; and (J) neither the Company nor, to the knowledge of the Company, its respective officers, directors,
employees, agents or contractors has been or is currently excluded from participation in the Medicare and Medicaid programs or
any other state or federal health care program.
(xxxvi)
No
Rated Securities.
There are no debt securities or preferred stock of, or guaranteed by, the Company that are rated
by a “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of
the Exchange Act.
(xxxvii)
Related Party Transactions
.
To the Company’s knowledge, no transaction
has occurred between or among the Company, on the one hand, and any of the Company’s officers, directors or five percent
or greater stockholders or any affiliate or affiliates of any such officer, director or five percent or greater stockholders that
is required to be described that is not so described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus. The Company has not, directly or indirectly, extended or maintained credit, or arranged for the extension of credit,
or renewed an extension of credit, in the form of a personal loan to or for any of its directors or executive officers in violation
of applicable laws, including Section 402 of the Sarbanes-Oxley Act.
(b)
Effect
of Certificates
. Any certificate signed by any officer of the Company and delivered to you or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
3.
Purchase,
Sale and Delivery of Securities
.
(a)
Firm
Shares
. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions
herein set forth, the Company agrees to issue and sell the Firm Shares to the several Underwriters, and each Underwriter agrees,
severally and not jointly, to purchase from the Company the number of Firm Shares set forth opposite the name of such Underwriter
in Schedule I hereto. The purchase price for each Firm Share shall be $[
l
] per share.
In making this Agreement, each Underwriter is contracting severally and not jointly; except as provided in paragraph (d) of this
Section 3, the agreement of each Underwriter is to purchase only the respective number of Firm Shares specified in Schedule I.
(b)
Option
Shares
. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions
herein set forth, the Company hereby grants to the several Underwriters an option to purchase all or any portion of the Option
Shares at the same purchase price as the Firm Shares, for use solely in covering any over-allotments made by the Underwriters in
the sale and distribution of the Firm Shares. The option granted hereunder may be exercised in whole or in part at any time within
30 days after the effective date of this Agreement upon notice (confirmed in writing) by the Representative to the Company setting
forth the aggregate number of Option Shares as to which the several Underwriters are exercising the option and the date and time,
as determined by you, when the Option Shares are to be delivered, but in no event earlier than the First Closing Date (as defined
below) nor earlier than the second business day or later than the tenth business day after the date on which the option shall have
been exercised. The number of Option Shares to be purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of Firm Shares to be purchased by such Underwriter is
of the total number of Firm Shares to be purchased by the several Underwriters, as adjusted by the Representative in such manner
as the Representative deems advisable to avoid fractional shares. No Option Shares shall be sold and delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered.
(c)
Payment
and Delivery
.
(i) The
Securities to be purchased by each Underwriter hereunder, in book-entry form in such authorized denominations and registered in
such names as you may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf
of the Company to you, through the facilities of the Depository Trust Company (
“DTC”
), for the account
of such Underwriter, with any transfer taxes payable in connection with the transfer of the Securities to the Underwriters duly
paid, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day)
funds to the account specified by the Company to you at least forty-eight hours in advance. The time and date of such delivery
and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City time, on [
l
],
2017, or such other time and date as you and the Company may agree upon in writing, and, with respect to the Option Shares, 9:30 a.m.,
New York City time, on the date specified by you in each written notice given by you of the election to purchase such Option Shares,
or such other time and date as you and the Company may agree upon in writing. Such time and date for delivery of the Firm Shares
is herein called the
“First Closing Date
,
”
each such time and date for delivery of the
Option Shares, if not the First Closing Date, is herein called a
“Second Closing Date,”
and each such
time and date for delivery is herein called a
“Closing.”
(ii) The
documents to be delivered at each Closing by or on behalf of the parties hereto pursuant to Section 5 hereof, including the
cross receipt for the Securities and any additional documents requested by the Underwriters pursuant to Section 5(l) hereof,
will be delivered at the offices of the Company, and the Securities will be delivered to you, through the facilities of the DTC,
for the account of such Underwriter, all at such Closing.
(d)
Purchase
by Representative on Behalf of Underwriters
. It is understood that you, individually and not as Representative of the several
Underwriters, may (but shall not be obligated to) make payment to the Company, on behalf of any Underwriter for the Securities
to be purchased by such Underwriter. Any such payment by you shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an unincorporated association or partner with the Company.
4.
Covenants
.
The Company covenants and agrees with the several Underwriters as follows:
(a)
Required
Filings
. The Company will prepare and file a Prospectus with the Commission containing the Rule 430A Information omitted
from the Preliminary Prospectus within the time period required by, and otherwise in accordance with the provisions of, Rules 424(b)
and 430A of the Rules and Regulations. If the Company has elected to rely upon Rule 462(b) of the Rules and Regulations to
increase the size of the offering registered under the Act and the Rule 462(b) Registration Statement has not yet been filed and
become effective, the Company will prepare and file the Rule 462(b) Registration Statement with the Commission within the time
period required by, and otherwise in accordance with the provisions of, Rule 462(b) of the Rules and Regulations and the Act.
The Company will prepare and file with the Commission, promptly upon your request, any amendments or supplements to the Registration
Statement or Prospectus that, in your opinion, may be necessary or advisable in connection with the distribution of the Securities
by the Underwriters; and the Company will furnish you and counsel for the Underwriters a copy of any proposed amendment or supplement
to the Registration Statement or Prospectus and will not file any amendment or supplement to the Registration Statement or Prospectus
to which you shall reasonably object by notice to the Company after having been furnished a copy a reasonable time prior to the
filing, unless legal counsel to the Company advises the Company that such amendment is required by applicable law or regulation.
(b)
Notification
of Certain Commission Actions
. The Company will advise you, promptly after it shall receive notice or obtain knowledge
thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or preventing or suspending the use of any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus or any issuer free writing prospectus, of the suspension of the qualification of the Securities for offering
or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and the Company will promptly
use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued.
(c)
Continued
Compliance with Securities Laws
.
(A) Within
the time during which a prospectus (assuming the absence of Rule 172) relating to the Securities is required to be delivered under
the Act by any Underwriter or any dealer, the Company will comply with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Securities as contemplated by the provisions hereof, the Time of Sale Disclosure Package and the
Prospectus. If during such period any event occurs as a result of which the Prospectus (or if the Prospectus is not yet available
to prospective purchasers, the Time of Sale Disclosure Package) would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading,
or if during such period it is necessary to amend the Registration Statement or supplement the Prospectus (or if the Prospectus
is not yet available to prospective investors, the Time of Sale Disclosure Package) to comply with the Act, the Company promptly
will (x) notify you of such untrue statement or omission, (y) amend the Registration Statement or supplement the Prospectus
(or, if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) (at the expense of
the Company) so as to correct such statement or omission or effect such compliance and (z) notify you when any amendment to the
Registration Statement is filed or becomes effective or when any supplement to the Prospectus (or, if the Prospectus is not yet
available to prospective purchasers, the Time of Sale Disclosure Package) is filed.
(B) If
at any time following issuance of a Written Testing-the-Waters Communication there occurred or occurs an event or development as
a result of which such Written Testing-the-Waters Communication conflicted or would conflict with the information contained in
the Registration Statement, any Preliminary Prospectus or the Prospectus relating to the Securities or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company (x) has promptly notified
or promptly will notify the Representative of such conflict, untrue statement or omission, (y) has promptly amended or will promptly
amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such conflict, untrue
statement or omission and (z) has notified or promptly will notify you when such amendment or supplement was or is filed with the
Commission to the extent required to be filed by the Rules and Regulations.
(d)
Blue
Sky Qualifications
. The Company shall take or cause to be taken all necessary action to qualify the Securities for sale
under the securities laws of such domestic United States or foreign jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as required for the distribution of the Securities, except that the Company shall not be required
in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process in any state.
(e)
Provision
of Documents
. The Company will furnish, at its own expense, to the Underwriters and counsel for the Underwriters copies
of the Registration Statement (three of which will be signed and will include all consents and exhibits filed therewith), and to
the Underwriters and any dealer each Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, and all amendments
and supplements to such documents, in each case as soon as available and in such quantities as you may from time to time reasonably
request.
(f)
Rule
158
. The Company will make generally available to its security holders as soon as practicable, but in no event later than
15 months after the end of the Company’s current fiscal quarter, an earnings statement (which need not be audited) covering
a 12-month period beginning after the effective date of the Registration Statement (which, for purposes of this paragraph, will
be deemed to be the effective date of the Rule 462(b) Registration Statement, if applicable) that shall satisfy the provisions
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations.
(g)
Payment
and Reimbursement of Expenses
. The Company, whether or not the transactions contemplated hereunder are consummated or this
Agreement is terminated, will pay or cause to be paid (A) all expenses (including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Underwriters of the Securities, (B) all expenses and fees (including, without limitation,
fees and expenses of the Company’s accountants and counsel in connection with the preparation, printing, filing, delivery,
and shipping of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits
thereto), the Securities, each Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, and any amendment thereof
or supplement thereto, and the printing, delivery, and shipping of this Agreement and other underwriting documents, including Blue
Sky Memoranda (covering the states and other applicable jurisdictions), (C) all filing fees and fees incurred in connection with
the qualification of the Securities for offering and sale by the Underwriters or by dealers under the securities or blue sky laws
of the states and other jurisdictions which you shall designate, (D) the fees and expenses of any transfer agent or registrar,
(E) the reasonable out-of-pocket accountable fees and disbursements incurred by the Underwriters in connection with the offer,
sale or marketing of the Securities and performance of the Underwriters’ obligations hereunder, including all reasonable
out-of-pocket accountable fees and disbursements of Underwriters’ counsel, and for the avoidance of doubt, excluding any
general overhead, salaries, supplies, or similar expenses of the Underwriters incurred in the normal conduct of business, (F) listing
fees, if any, (G) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors
(H) the cost and expenses of the Company relating to investor presentations or any “road show” undertaken in connection
with marketing of the Securities, including, without limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with
the road show, and (H) all other costs and expenses of the Company incident to the performance of its obligations hereunder that
are not otherwise specifically provided for herein. The expenses to be paid by the Company and reimbursed to the Underwriters under
Subsection 4(g) shall be capped at $275,000. If this Agreement is terminated by you pursuant to Section 8 hereof or if the sale
of the Securities provided for herein is not consummated by reason of any failure, refusal or inability on the part of the Company
to perform any agreement on its part to be performed, or because any other condition of the Underwriters’ obligations hereunder
required to be fulfilled by the Company is not fulfilled, the Company will reimburse the several Underwriters for all reasonable
out-of-pocket accountable disbursements (including but not limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges) incurred by the Underwriters in connection with their investigation, preparing
to market and marketing the Securities or in contemplation of performing their obligations hereunder, subject to the terms and
conditions set forth in the Engagement Letter (as defined below).
(h)
Use
of Proceeds
. The Company will apply the net proceeds from the sale of the Securities to be sold by it hereunder for the
purposes set forth in the Time of Sale Disclosure Package and in the Prospectus and will file such reports with the Commission
with respect to the sale of the Securities and the application of the proceeds therefrom as may be required in accordance with
Rule 463 of the Rules and Regulations.
(i)
Company
Lock Up
. The Company will not, without the prior written consent of the Representative, from the date of execution of this
Agreement and continuing to and including the date 180 days after the date of the Prospectus (the
“Lock-Up Period”
),
(A) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (B) enter into
any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (A) or (B) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise, except to the Underwriters pursuant to this Agreement and (x) grants of options, shares of Common Stock
and other awards to purchase or receive shares of Common Stock under the Company Stock Plans that are in effect as of or prior
to the date hereof, or (y) issuances of shares of Common Stock upon the exercise of options or other awards granted under
such Company Stock Plans or the Company’s preferred stock outstanding as of the date hereof pursuant to the terms thereof
as of such date. The Company agrees not to accelerate the vesting of any option or warrant or the lapse of any repurchase right
prior to the expiration of the Lock-Up Period.
(j)
Stockholder
Lock-Ups
. The Company has caused to be delivered to you prior to the date of this Agreement a letter, in the form of Exhibit
A hereto (the
“Lock-Up Agreement”
), from each individual or entity listed on Schedule II. The Company
will enforce the terms of each Lock-Up Agreement and issue stop-transfer instructions to its transfer agent and registrar for the
Common Stock with respect to any transaction or contemplated transaction that would constitute a breach of or default under the
applicable Lock-Up Agreement.
(k)
Lock-up
Release or Waiver
.
If the Representative in its sole discretion, agrees to release or waive the restrictions set forth
in a lock-up agreement described in Section 4(j) hereof for an officer or director of the Company and provide the Company with
notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the
Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C hereto through
a major news service at least two business days before the effective date of the release or waiver.
(l)
No Market Stabilization or Manipulation
. The Company has not taken and will not take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities, and has not effected
any sales of Common Stock which are required to be disclosed in response to Item 701 of Regulation S-K under the Act
which have not been so disclosed in the Registration Statement.
(m)
SEC
Reports
. The Company will file on a timely basis with the Commission such periodic and special reports as required by the
Rules and Regulations.
(n)
Free
Writing Prospectuses
. The Company represents and agrees that, unless it obtains the prior written consent of the Representative,
and each Underwriter represents and agrees that, unless it obtains the prior written consent of the Company and the Representative,
it has not made and will not make any offer relating to the Securities that would constitute an issuer free writing prospectus
or that would otherwise constitute a free writing prospectus.
Each Underwriter severally
represents and agrees that, (A) unless it obtains the prior written consent of the Company and the Representative, it has
not distributed, and will not distribute any Written Testing-the-Waters Communication other than those listed on Schedule IV,
and (B) any Testing-the-Waters Communication undertaken by it was with entities that are qualified institutional buyers with
the meaning of Rule 144A under the Act or institutions that are accredited investors within the meaning of Rule 501 under
the Act.
(n)
Emerging
Growth Company
.
The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company
at any time prior to the later of (A) completion of the distribution of Securities within the meaning of the Act and (B) completion
of the Lock-up Period referenced to in Section 4(i) hereof.
(o)
Representative’s
Warrant
.
On each Closing Date, the Company shall sell to the Representative, for an aggregate purchase price of $50, a
warrant in the form attached as Exhibit B hereto (the
“Representative’s Warrant”
) to purchase
the number of shares of the Company’s Common Stock equal to 5.0% of the Firm Shares issued on such Closing Date (rounded
up to the nearest whole share) at an exercise price equal to 110% of the public offering price per share in the Offering.
5.
Conditions
of Underwriters’ Obligations
. The obligations of the several Underwriters hereunder are subject to the accuracy,
as of the date hereof and at each of the First Closing Date and the Second Closing Date (as if made at such Closing Date), of and
compliance with all representations, warranties and agreements of the Company contained herein, to the performance by the Company
of its obligations hereunder and to the following additional conditions:
(a)
Required
Filings; Absence of Certain Commission Actions
. The Registration Statement shall have become effective not later than 5:30
p.m., New York City time, on the date of this Agreement, or such later time and date as you, as Representative of the several Underwriters,
shall approve and all filings required by Rules 424, 430A and 433 of the Rules and Regulations shall have been timely made
(without reliance on Rule 424(b)(8) or Rule 164(b)); no stop order suspending the effectiveness of the Registration Statement or
any part thereof or any amendment thereof, nor suspending or preventing the use of the Time of Sale Disclosure Package or the Prospectus
shall have been issued; no proceedings for the issuance of such an order shall have been initiated or threatened; and any request
of the Commission for additional information (to be included in the Registration Statement, the Time of Sale Disclosure Package,
the Prospectus or otherwise) shall have been complied with to your satisfaction.
(b)
Continued
Compliance with Securities Laws
. No Underwriter shall have advised the Company that (i) the Registration Statement or any
amendment thereof or supplement thereto contains an untrue statement of a material fact which, in your opinion, is material or
omits to state a material fact which, in your opinion, is required to be stated therein or necessary to make the statements therein
not misleading, or (ii) the Time of Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto,
contains an untrue statement of fact which, in your opinion, is material, or omits to state a fact which, in your opinion, is material
and is required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they
are made, not misleading.
(c)
Absence
of Certain Events
. Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus, subsequent to the
respective dates as of which information is given in the Time of Sale Disclosure Package and the Prospectus, neither the Company
nor any of its subsidiaries shall have incurred any material liabilities or obligations, direct or contingent, or entered into
any material transactions, or declared or paid any dividends or made any distribution of any kind with respect to its capital stock;
and there shall not have been any change in the capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or warrants or conversion of convertible securities),
or any material change in the short-term or long-term debt of the Company (other than as a result of the conversion of convertible
securities), or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock of the
Company or any of its subsidiaries, or any Material Adverse Change or any development involving a prospective Material Adverse
Change (whether or not arising in the ordinary course of business), that, in your judgment, makes it impractical or inadvisable
to offer or deliver the Securities on the terms and in the manner contemplated in the Time of Sale Disclosure Package and in the
Prospectus.
(d)
Opinion
of Company Counsel
. On each Closing Date, there shall have been furnished to you, as Representative of the several Underwriters,
the opinion of Fredrikson & Byron, P.A., counsel for the Company, dated such Closing Date and addressed to you in form and
substance reasonably satisfactory to you.
(e)
Opinion
of Underwriters’ Counsel
. On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, such opinion or opinions and negative assurance statement from Faegre Baker Daniels LLP, counsel for the
Underwriters, dated such Closing Date and addressed to you, with respect to such matters as you reasonably may request, and such
counsel shall have received such papers and information as they request to enable them to pass upon such matters.
(f)
Opinion
of Company Intellectual Property Counsel
. On each Closing Date, there shall have been furnished to you the opinion of Nelson
Mullins Riley & Scarborough LLP, special intellectual property counsel for the Company, dated such Closing Date and addressed
to you in form and substance reasonably satisfactory to you.
(g)
Comfort Letters
. On the date hereof, on the effective date of any post-effective amendment to the Registration Statement
filed after the date hereof and on each Closing Date, you, as Representative of the several Underwriters, shall have received a
letter from Boulay PLLP, each dated such date and addressed to you, in form and substance satisfactory to you.
(h)
Officers’
Certificate
. On each Closing Date, there shall have been furnished to you, as Representative of the several Underwriters,
a certificate, dated such Closing Date and addressed to you, signed by the chief executive officer and by the chief financial officer
of the Company, to the effect that:
(i) The
representations and warranties of the Company in this Agreement are true and correct as if made at and as of such Closing Date,
and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date; and
(ii) No
stop order or other order suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof
or the qualification of the Securities for offering or sale, nor suspending or preventing the use of the Time of Sale Disclosure
Package, the Prospectus or any issuer free writing prospectus, has been issued, and no proceeding for that purpose has been instituted
or, to the best of their knowledge, is contemplated by the Commission or any state or regulatory body.
(i)
Lock-Up
Agreement
. The Representative shall have received all of the Lock-Up Agreements referenced in Section 4 and the Lock-Up
Agreements shall remain in full force and effect.
(j)
Intentionally
Omitted.
(k)
Representative’s
Warrant
. The Representative shall have received the Representative’s Warrant referenced in Section 4(o) with the
respect to the Securities to be delivered on such Closing Date.
(l)
Other
Documents
. The Company shall have furnished to you, as Representative of the several Underwriters, and counsel for the
Underwriters such additional documents, certificates and evidence as you or they may have reasonably requested.
(m)
FINRA
No Objections
. FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(n)
Exchange
Listing
. The Securities to be delivered on such Closing Date will have been approved for listing on the Nasdaq Capital
Market.
All such opinions,
certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form
and substance to you, as Representative of the several Underwriters, and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and other documents as you shall reasonably request.
6.
Indemnification
and Contribution
.
(a)
Indemnification
by the Company
. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors and officers
and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, from and against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of
the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including
the 430A Information and any other information deemed to be a part of the Registration Statement at the time of effectiveness and
at any subsequent time pursuant to the Rules and Regulations, if applicable, any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus, or any amendment or supplement thereto, any issuer free writing prospectus, any issuer information that
the Company has filed or is required to file pursuant to Rule 433(d) of the Rules and Regulations,
or
any Written Testing-the-Waters Communication,
or any road show as defined in Rule 433(h) under the Act (a
“road
show”
), or (ii) arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim,
damage, liability or action as such expenses are incurred;
provided, however,
that the Company will not be liable in any
such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished
to the Company by you, or by any Underwriter through you, specifically for use in the preparation thereof; it being understood
and agreed that the only information furnished by an Underwriter consists of the information described as such in Section 6(e).
(b)
Indemnification
by the Underwriters
. Each Underwriter will, severally and not jointly, indemnify and hold harmless the Company, its affiliates,
directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Act and Section
20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto, any issuer free writing
prospectus, any issuer information that the Company has filed or is required to file pursuant to Rule 433(d) of the Rules and Regulations,
or any Written Testing-the-Waters Communication,
or any road show, or (ii) arise
out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in conformity with written information furnished to the Company
by you, or by such Underwriter through you, specifically for use in the preparation thereof (it being understood and agreed that
the only information furnished by an Underwriter consists of the information described as such in Section 6(e)), and will
reimburse the Company for any legal or other expenses reasonably incurred and documented by the Company in connection with investigating
or defending against any such loss, claim, damage, liability or action as such expenses are incurred.
(c)
Notice
and Procedures
. Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent
such indemnifying party has been materially prejudiced by such failure (through the forfeiture of substantive rights or defenses).
In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of the indemnifying party’s election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in your sole judgment, it is advisable for the Underwriters to be represented as a group
by separate counsel, you shall have the right to employ a single counsel (in addition to local counsel) to represent all Underwriters
who may be subject to liability arising from any claim in respect of which indemnity may be sought by the Underwriters under subsection
(a) above, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to the Underwriters as incurred. An indemnifying party shall not be obligated under any settlement agreement
relating to any action under this Section 6 to which it has not agreed in writing. In addition, no indemnifying party shall,
without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld or delayed) effect
any settlement of any pending or threatened proceeding unless such settlement includes an unconditional release of such indemnified
party for all liability on claims that are the subject matter of such proceeding and does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an indemnified party. Notwithstanding the foregoing, if
at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel pursuant to this Section 6(c), such indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(d)
Contribution;
Limitations on Liability; Non-Exclusive Remedy
. If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred
to in subsection (a) or (b), (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters and the parties’ relevant intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid
by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating
or defending against any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total underwriting
discounts and commissions received by such Underwriter with respect to the Securities exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting obligations and not joint. The remedies provided for
in this Section 6 are not exclusive and shall not limit any rights or remedies that might otherwise be available to any indemnified
party at law or in equity.
(e)
Information
Provided by the Underwriters
. The Underwriters severally confirm that the statements with respect to the public offering
of the Securities by the Underwriters set forth in the second paragraph under the caption “Underwriting” and the estimate
of the Underwriters’ reasonable out-of-pocket accountable fees and disbursements in connection with the offering of the Securities
in the Time of Sale Disclosure Package and in the Prospectus are correct and the Company acknowledges such statements constitute
the only information concerning the Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically
for inclusion in the Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or
any issuer free writing prospectus.
7.
Representations
and Agreements to Survive Delivery
. All representations, warranties, and agreements of the Company herein or in certificates
delivered pursuant hereto, and the agreements of the several Underwriters and the Company contained in Section 6 hereof, shall
remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any controlling
person thereof, or the Company or any of its officers, directors, or controlling persons, and shall survive delivery of, and payment
for, the Securities to and by the Underwriters hereunder and any termination of this Agreement.
8.
Termination
.
(a)
Right
to Terminate
. You shall have the right to terminate this Agreement by giving notice as hereinafter specified at any time
at or prior to the First Closing Date, and the option referred to in Section 3(b), if exercised, may be cancelled at any time
prior to the Second Closing Date, if (i) the Company shall have failed, refused or been unable, at or prior to such Closing
Date, to perform any agreement on its part to be performed hereunder, (ii) any other condition of the Underwriters’
obligations hereunder is not fulfilled, (iii) trading on The NASDAQ Stock Market or New York Stock Exchange shall have been
wholly suspended, (iv) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on The NASDAQ Stock Market or New York Stock Exchange, by such Exchange or by order of the Commission
or any other Governmental Authority, (v) a banking moratorium shall have been declared by federal or state authorities, or
(vi) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or
crisis that, in your judgment, is material and adverse and makes it impractical or inadvisable to proceed with the completion of
the sale of and payment for the Securities. Any such termination shall be without liability of any party to any other party except
that the provisions of Section 4(g) and Section 6 hereof shall at all times be effective.
(b)
Notice
of Termination
. If you elect to terminate this Agreement as provided in this Section, the Company shall be notified promptly
by you by telephone, confirmed by letter.
9.
Default
by the Company
.
(a)
Default
by the Company
. If the Company shall fail at the First Closing Date to sell and deliver the Securities which it is obligated
to sell hereunder, then this Agreement shall terminate without any liability on the part of any Underwriter.
(b)
No
Relief from Liability
. No action taken pursuant to this Section shall relieve the Company from liability, if any, in respect
of any default hereunder.
10.
Notices.
Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Underwriters, shall
be mailed via overnight delivery service or hand delivered via courier, to the Representative c/o Craig-Hallum Capital Group LLC,
222 South Ninth Street, Suite 350, Minneapolis, Minnesota 55402, Attention: Investment Banking, with a copy to Faegre Baker Daniels
LLP, 2200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, Attention: W. Morgan Burns; and (ii) if to
the Company, shall be mailed or delivered to it 16305 36
th
Avenue North, Suite 450, Minneapolis, Minnesota 55446, Attention:
Brian F. Sullivan, with a copy to Fredrikson & Byron, P.A., 200 South Sixth Street, Suite 4000, Minneapolis, Minnesota 55402,
Attention: Eric O. Madson. Any party to this Agreement may change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.
11.
Persons
Entitled to Benefit of Agreement
. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective successors and assigns and the controlling persons, officers and directors referred to in Section 6. Nothing in
this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy
or claim under or in respect of this Agreement or any provision herein contained. The term “successors and assigns”
as herein used shall not include any purchaser, as such purchaser, of any of the Securities from any of the several Underwriters.
12.
Absence
of Fiduciary Relationship
. The Company acknowledges and agrees that: (a) the Representative has been retained solely to
act as an underwriter in connection with the sale of the Securities and that no fiduciary, advisory or agency relationship between
the Company and the Representative has been created in respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Representative has advised or is advising the Company on other matters; (b) the price and other terms of the Securities
set forth in this Agreement were established by the Company following discussions and arms-length negotiations with the Representative
and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (c) it has been advised that the Representative and its affiliates are engaged in a broad range
of transactions which may involve interests that differ from those of the Company and that the Representative has no obligation
to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; (d) it has
been advised that the you are acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of
the Underwriters, and not on behalf of the Company; (e) it waives to the fullest extent permitted by law, any claims it may have
against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty in respect of any of the transactions
contemplated by this Agreement and agrees that the Underwriters shall have no liability (whether direct or indirect) to the Company
in respect of such a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors
of the Company.
13.
Governing
Law; Waiver of Jury Trial
. This Agreement shall be governed by and construed in accordance with the laws of the State of
New York. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates)
and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this Agreement, the Representative’s Warrant or the transactions
contemplated hereby.
14.
Counterparts
.
This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts
shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.
15.
General
Provisions.
This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written
or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof, including
that certain engagement letter dated March 17, 2017, by and between the Company and the Representative (the “
Engagement
Letter
”), except as to the provisions contained in Sections 4, 5, 8, 10, 11, 12, 13, 16 and 17 thereto that shall
survive and remain in full force and effect. This Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is
meant to benefit. The Section headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph
or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
[Signature Page Follows]
Please sign and return
to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement between the Company
and the several Underwriters in accordance with its terms.
|
|
Very truly yours,
|
|
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|
|
|
Celcuity Inc.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
Brian F. Sullivan
|
|
|
Title:
|
Chief Executive Officer
|
Confirmed as of the date first
above mentioned, on behalf of
itself and the other several
Underwriters named in Schedule I hereto.
|
Craig-Hallum Capital Group LLC
|
|
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By:
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|
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Name:
|
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Title:
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[Signature Page to Underwriting Agreement]
SCHEDULE I
|
Underwriter
|
|
Number of Firm Shares (1)
|
|
Craig-Hallum Capital Group LLC
|
|
[
l
]
|
|
[
l
]
|
|
[
l
]
|
|
|
|
|
|
Total
|
|
[
l
]
|
(1) The
Underwriters may purchase up to an additional [
l
] Option Shares, to the extent the
option described in Section 3(b) of the Agreement is exercised, in the proportions and in the manner described in the Agreement.
SCHEDULE II
List of Individuals and Entities Executing
Lock-Up Agreements
Maureen Cronin
David F. Dalvey
Lance G. Laing
Richard J. Nigon
Brian F. Sullivan
The Globe Resources Group, LLC
SCHEDULE III
Pricing Information
Firm Shares: [
l
]
Option Shares: [
l
]
Price to the public: $[
l
]
per share
Price to the Underwriters: $[
l
]
per share
SCHEDULE IV
Written Testing-the-Waters
Communications
None.
Exhibit 2.1
PLAN OF CONVERSION
OF
CELCUITY LLC
a Minnesota limited liability company
TO
CELCUITY INC.,
a Delaware corporation
This Plan of Conversion
is entered into by Celcuity LLC, a Minnesota limited liability company, which desires to convert to Celcuity Inc., a Delaware corporation,
effective as of the Effective Date set forth below.
1.
The
Converting Organization
. The name of the converting organization is Celcuity LLC, a Minnesota limited liability company (the
“
Converting Organization
”).
2.
The
Converted Organization
. After the conversion, the name of the converted organization shall be Celcuity Inc., a Delaware corporation
(the “
Converted Organization
”).
3.
Conversion
.
Celcuity LLC shall be converted into Celcuity Inc., pursuant to the applicable provisions of the Minnesota Limited Liability Company
Act, and the Delaware General Corporation Law (the “
Conversion
”).
4.
Organizational
Documents
. The Certificate of Incorporation attached hereto as
Appendix 1
shall be the Certificate of Incorporation
of the Converted Organization. Upon effectiveness of the Conversion, the Amended and Restated Member Control Agreement of the Converting
Organization, dated February 27, 2014, shall be deemed to be terminated.
5.
Effective
Date
. The Conversion shall become effective upon filing with the Delaware Secretary of State (the “
Effective Date
”).
After the conversion, the Converted Organization will be a corporation organized under the General Corporation Law of the State
of Delaware.
6.
Conversion
of Membership Interests
. By virtue of the Conversion and without any action on the part of Converting Organization or the holder
of any unit representing membership interests of the Converting Organization, all units representing membership interests in the
Converting Organization will be converted into validly issued, fully paid and non-assessable shares of common stock, $0.001 par
value per share, of the Converted Organization at a ratio of 40 units for each share of common stock (the “
Conversion
Ratio
”). The aggregate number of shares of common stock of each stockholder in the Converted Organization following
the Conversion will be rounded up to the nearest whole share.
7.
Adjustment
to Options, Warrants and Other Rights
. Effective upon the Conversion, and without any action on the part of any holder of unit
options, warrants or rights to acquire units, all outstanding unit options and warrants of the Converting Organization, and any
other rights to acquire units representing membership interests of the Converting Organization, shall be converted into a right
to acquire common stock, $0.001 par value per share, of the Converted Organization at a ratio equal to the Conversion Ratio, and
the exercise price thereof shall be adjusted so that the aggregate exercise price payable upon exercise shall remain unchanged.
The aggregate number of shares of common stock underlying each option, warrant or instrument reflecting rights to acquire common
stock following the Conversion will be rounded up to the nearest whole share.
8.
Directors
and Officers of Converted Organization
. The members of the Board of Governors of the Converting Organization holding office
immediately before the Effective Date shall constitute the Board of Directors of the Converted Organization immediately upon the
Effective Date. The officers of the Converting Organization immediately before the Effective Date shall be the officers of the
Converted Organization immediately upon the Effective Date.
9.
Continuation
.
As of the Effective Date, the Converted Organization shall possess all rights, privileges, powers, franchises, assets, property,
and immunities of the Converting Organization. The title to any real property or any interest therein vested by deed or otherwise
in the Converting Organization shall remain vested in the Converted Organization. All rights of creditors, and all liens upon any
property of Converting Organization, shall be preserved unimpaired, limited in lien to the property affected by such liens at the
Effective Date, and all other debts, liabilities, and duties of the Converting Organization shall continue as obligations of the
Converted Organization, including without limitation, any obligation under an agreement or applicable law to indemnify governors,
managers, members, employees or agents of the Converting Organization with respect to events occurring prior to the Effective Date.
10.
Abandonment
of Conversion
. At any time before the Articles of Conversion are delivered to the Secretary of State of the Statement of Minnesota
for filing, this Plan of Conversion may be abandoned by action of the board of governors of the Converting Organization.
11.
Further
Assurances
. If at any time upon or after the Effective Date, the Converted Organization shall determine or be advised that
any instrument of further assurance is needed in order to evidence the continued vesting in it of the title of the Converting Organization
to any of the property rights of the Converting Organization, the appropriate officers or managers of the Converted Organization
and the Converting Organization are hereby authorized to execute, acknowledge and deliver all such instruments of further assurance
and to do all acts or things, in the name of the Converted Organization and the Converting Organization, as may be required or
desirable to carry out the provisions of this Plan of Conversion.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned being
duly authorized to sign on behalf of the Converting Organization, has executed this Plan of Conversion on September ___, 2017.
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CELCUITY LLC
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a Minnesota limited liability company
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By:
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Name: Brian Sullivan
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Title: Chief Executive Officer
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[Signature page to Plan of Conversion]
Appendix 1
Certificate of Incorporation
[see attached]
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
CELCUITY INC.
The undersigned, being
of full age, for the purpose of forming a corporation under and pursuant to the Delaware General Corporation Law, as amended (the
“
DGCL
”), hereby adopts the following Certificate of Incorporation:
Article
1
NAME
The name of the corporation
is Celcuity Inc.
Article
2
REGISTERED OFFICE AND AGENT
The address of the
registered office of the corporation in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801. The name of the registered agent of the corporation at such address is The Corporation Trust Company.
Article
3
PURPOSE
The purpose of this
corporation is to engage in any lawful act or activity for which a corporation may be organized under the DGCL.
Article
4
CAPITAL STOCK
4.1 The
aggregate number of shares the corporation has authority to issue is 50,000,000 shares, par value of $0.001 per share, consisting
of 45,000,000 shares of Common Stock and 5,000,000 shares of undesignated Preferred Stock. The Board of Directors of the corporation
has the authority, without first obtaining approval of the stockholders of the corporation or any class thereof, to establish from
the undesignated shares of Preferred Stock, by resolution adopted and filed in the manner provided by law, one or more series of
Preferred Stock and to fix the number of shares, the voting powers, designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or restrictions of such class or series.
4.2 The
Board of Directors is expressly authorized to increase or decrease the number of shares of any series subsequent to the issuance
of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any
series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status
that they had prior to the adoption of the resolution originally fixing the number of shares of such series. The number of authorized
shares of Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding)
by the affirmative vote of the holders of a majority of the votes represented by all outstanding shares of stock of the Company
entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.
4.3 Unless
and except to the extent set forth in a resolution adopted and filed in the manner provided by law establishing one or more series
of Preferred Stock, no holder of shares of the corporation of any class or series now or hereafter authorized has any preferential
or preemptive right provided under applicable law to subscribe for, purchase or receive any shares of the corporation of any class
or series now or hereafter authorized, or any options or warrants for such shares, that may at any time be issued, sold or offered
for sale by the Company.
4.4 No
holder of shares of the Company of any class now or hereafter authorized will be entitled to cumulative voting.
Article
5
MEETINGS AND BOOKS
5.1 Meetings
of the stockholders may be held within or outside the State of Delaware, as the Bylaws may provide.
5.2 Advance
notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting
of the stockholders of the corporation shall be given in the manner provided in the Bylaws of the corporation.
5.3 The
books of the corporation may be kept within or (subject to any provision contained in the statutes) outside the State of Delaware
at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the corporation.
Article
6
INCORPORATOR
The name and mailing
address of the incorporator are as follows:
Annette Peterson-Igbinovia
Fredrikson & Byron, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402-1425
Article
7
DIRECTORS
7.1 The
management of the business and the conduct of the affairs of the corporation shall be vested in its Board of Directors. The number
of directors which shall constitute the Board of Directors shall be fixed exclusively by resolutions adopted by a majority of the
authorized number of directors then constituting the Board of Directors.
7.2 The
directors of the corporation need not be elected by written ballot unless the Bylaws so provide.
7.3 To
the fullest extent permitted by law, any past or present director of the corporation shall not be personally liable to the corporation
or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. If the DGCL is amended
to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director
of the corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. No amendment to,
modification of or repeal of this Article 7 will apply to or have any effect on the liability or alleged liability of any past
or present director of the Company for or with respect to any acts or omissions of such director occurring prior to such amendment.
Article
8
BYLAWS
The Board of Directors
is expressly empowered to adopt, amend or repeal the Bylaws of the corporation. The stockholders shall also have power to adopt,
amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or
series of stock of the corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders
of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the then-outstanding shares of the capital
stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required
to adopt, amend or repeal any provision of the Bylaws of the corporation.
Article
9
shareholder action
Any action required
or permitted to be taken by the stockholders of the corporation must be effected at an annual or special meeting of stockholders
called in accordance with the Bylaws and may not be effected by any consent in writing by such stockholders pursuant to Section
228 of the DGCL or any other provision of the DGCL.
Article
10
amendment
10.1 The
corporation reserves the right to amend, alter or repeal any provision contained in this Certificate of Incorporation in the manner
now or hereafter prescribed by statute, except as provided in Section 10.2, and all rights conferred upon the stockholders herein
are granted subject to this reservation.
10.2 Notwithstanding
any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or
no vote, but in addition to any affirmative vote of the holders of any particular class or series of the corporation required by
law or by this Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock,
the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding
shares of capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single
class, shall be required to alter, amend or repeal Articles 5, 7, 8, 9 and 10.
THE UNDERSIGNED, being
the incorporator named herein, for the purpose of forming a corporation pursuant to the DGCL, makes this Certificate, hereby declaring
and certifying that this is his or her act and deed and the facts herein stated are true, and accordingly has hereunto set his
or her hand on ______________, 2017.
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Annette Peterson-Igbinovia, Incorporator
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Exhibit
3.2
BYLAWS
OF
CELCUITY
INC.
(a
Delaware Corporation)
BYLAWS
OF
CELCUITY INC.
(a Delaware Corporation)
ARTICLE
1
Offices
1.1. Registered
Office
. The registered office of the corporation in the State of Delaware shall be in the City of Wilmington, County of New
Castle.
1.2. Other
Offices.
The corporation shall also have and maintain an office or principal place of business at such place as may be fixed
by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware as the
Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE
2
Meetings of Stockholders
2.1. Place
of Meetings.
Meetings of the stockholders of the corporation may be held at such place, either within or without the State
of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion,
determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided
under the Delaware General Corporation Law (“
DGCL
”).
2.2. Annual
Meetings.
(a)
Date,
Time and Purpose.
The annual meeting of the stockholders of the corporation, for the purpose of electing directors and transacting
such other business as may lawfully come before it, shall be held on such date and at such time as may be designated from time
to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the corporation and the proposal
of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporation’s
notice of meeting of stockholders; (ii) by or at the direction of the Board of Directors; or (iii) by any stockholder
of the corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in the following
paragraph, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 2.2.
Clause (iii) above shall be the exclusive means for a stockholder to make nominations and propose other business (other than matters
properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “
1934 Act
”) and
included in the corporation’s notice of meeting of stockholders) to be considered at an annual meeting of stockholders.
(b)
Nominations
and Proposals by Stockholders.
At an annual meeting of the stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting by
a stockholder pursuant to clause (iii) of Section 2.2(a) of these Bylaws, (i) the stockholder must have given timely
notice thereof in proper form and timely updates and supplements thereof, in each case in proper form, in writing to the Secretary
of the corporation, (ii) such other business must be a proper matter for stockholder action under the DGCL, (iii) if
the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the corporation
with a Solicitation Notice (as defined in Section 2.2(c)), such stockholder or beneficial owner must, in the case of a proposal,
have delivered a proxy statement and form of proxy to holders of at least the percentage of the corporation’s voting shares
required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy
statement and form of proxy to holders of a percentage of the corporation’s voting shares reasonably believed by such stockholder
or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in
either case, have included in such materials the Solicitation Notice, and (iv) if no Solicitation Notice relating thereto
has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must
not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section 2.2.
To be timely, a stockholder’s
notice shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business
on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first
anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is advanced
more than thirty (30) days prior to or delayed by more than sixty (60) days after the anniversary of the preceding year’s
annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred
twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th)
day prior to such annual meeting or, if the first public announcement of the date of such annual meeting is less than one hundred
(100) days prior to the date of such annual meeting, the tenth (10th) day following the day on which public announcement of the
date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a
new time period for the giving of a stockholder’s notice as described above.
Notwithstanding anything
in the immediately preceding paragraph to the contrary, if the number of directors to be elected to the Board of Directors of the
corporation is increased and no public announcement naming all of the nominees for director or specifying the size of the increased
Board of Directors is made by the corporation at least one hundred (100) days prior to the first anniversary of the preceding year’s
annual meeting, a stockholder’s notice required by this Section 2.2 shall also be considered timely, but only with respect
to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive
offices of the corporation not later than the close of business on the tenth (10th) day following the day on which a public announcement
naming all of the nominees for director or specifying the size of the increased Board of Directors is first made by the corporation.
In addition, to be
considered timely, a stockholder’s notice must further be updated and supplemented, if necessary, so that the information
provided or required to be provided in such notice is true and correct as of the record date for the meeting and as of the date
that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement
must be delivered to the Secretary at the principal executive offices of the corporation not later than five (5) business days
after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not
later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of
the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement
thereof. For the avoidance of doubt, the obligation to update and supplement set forth in this paragraph or any other Section of
these Bylaws will not limit the corporation’s rights with respect to any deficiencies in any notice provided by a stockholder,
extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder
to amend or update any proposal or to submit any new proposal, including by changing or adding nominees, matters, business and/or
resolutions proposed to be brought before a meeting of the stockholders.
(c)
Stockholder’s
Notice.
To be in proper form, a stockholder’s notice to the Secretary must include the following, as applicable:
(1) As
to each person whom the stockholder proposed to nominate for election or reelection as a director (i) all information relating
to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or
is otherwise required, in each case pursuant to Regulation 14A under the 1934 Act and Rule 14a-4(d) thereunder (including such
person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and
(ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings
during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any,
and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee,
and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without
limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K under the
1934 Act if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any
affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule
and the nominee were a director or executive officer of such registrant;
(2) As
to any other business the stockholder proposes to bring before the meeting, (i) a brief description of the business desired
to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business
of such stockholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith,
if any, in such business, (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration
and, if such proposal or business includes a proposal to amend the Bylaws of the corporation, the text of the proposed amendment),
and (iii) a description of any agreements, arrangements and understandings between such stockholder, such beneficial owner
and their respective affiliates or associates or others acting in concert therewith, if any, and any other person or persons (including
their names) in connection with the proposal of such business by such stockholder; and
(3) As
to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (i) the
name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, if any, and
of their respective affiliates or associates or others acting in concert therewith, (ii) (1) the class or series and number
of shares of the corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, such beneficial
owner and their respective affiliates or associates or others acting in concert therewith, (2) any option, warrant, convertible
security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism
at a price related to any class or series of shares of the corporation or with a value derived in whole or in part from the value
of any class or series of shares of the corporation, or any derivative or synthetic arrangement having the characteristics of a
long position in any class or series of shares of the corporation, or any contract, derivative, swap or other transaction or series
of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or
series of shares of the corporation, including due to the fact that the value of such contract, derivative, swap or other transaction
or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the
corporation, whether or not such instrument, contract or right is subject to settlement in the underlying class or series of shares
of the corporation, through the delivery of cash or other property, or otherwise, and without regard to whether the stockholder
of record, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, may have entered
into transactions that hedge or mitigate the economic effect of such instrument, contract or right, or any other direct or indirect
opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the corporation (any
of the foregoing, a “
Derivative Instrument
”) directly or indirectly owned beneficially by such stockholder,
the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, (3) any proxy, contract,
arrangement, understanding, or relationship pursuant to which such stockholder, such beneficial owner and their respective affiliates
or associates or others acting in concert therewith have any right to vote any class or series of shares of the corporation, (4) any
agreement, arrangement, understanding, relationship or otherwise, including any repurchase or similar so-called “stock borrowing”
agreement or arrangement, involving such stockholder, such beneficial owner and their respective affiliates or associates or others
acting in concert therewith, directly or indirectly, the purpose or effect of which is to mitigate loss to, reduce the economic
risk (of ownership or otherwise) of any class or series of the shares of the corporation by, manage the risk of share price changes
for, or increase or decrease the voting power of, such stockholder, such beneficial owner and their respective affiliates or associates
or others acting in concert therewith with respect to any class or series of the shares of the corporation, or which provides,
directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any
class or series of the shares of the corporation (any of the foregoing, a “
Short Interest
”), (5) any rights
to dividends on the shares of the corporation owned beneficially by such stockholder, such beneficial owner and their respective
affiliates or associates or others acting in concert therewith that are separated or separable from the underlying shares of the
corporation, (6) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly,
by a general or limited partnership in which such stockholder, such beneficial owner and their respective affiliates or associates
or others acting in concert therewith is a general partner or, directly or indirectly, beneficially owns an interest in a general
partner of such general or limited partnership, (7) any performance-related fees (other than an asset-based fee) to which
such stockholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith are
entitled based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, including
without limitation any such interests held by members of the immediate family sharing the same household of such stockholder, such
beneficial owner and their respective affiliates or associates or others acting in concert therewith, (8) any significant
equity interests or any Derivative Instruments or Short Interests in any principal competitor of the corporation held by such stockholder,
such beneficial owner and their respective affiliates or associates or others acting in concert therewith and (9) any direct
or indirect interest of such stockholder, such beneficial owner and their respective affiliates or associates or others acting
in concert therewith in any contract with the corporation, any affiliate of the corporation or any principal competitor of the
corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (iii) whether
either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of
the proposal, at least the percentage of the corporation’s voting shares required under applicable law to carry the proposal
or, in the case of a nomination or nominations, a sufficient number of holders of the corporation’s voting shares to elect
such nominee or nominees (an affirmative statement of such intent, a “
Solicitation Notice
”), (iv) all information
that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or an amendment pursuant to Rule 13d-2(a)
if such a statement were required to be filed under the Exchange Act and the rules and regulations promulgated thereunder by such
stockholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any,
and (v) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal
and/or for the election of directors in a contested election pursuant to Section 14 of the 1934 Act and the rules and regulations
promulgated thereunder.
(4) In
addition, such stockholder’s notice shall be accompanied by, with respect to each nominee for election or reelection to the
Board of Directors, a completed and signed questionnaire, representation and agreement required by Section 2.2(g). The corporation
may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine
the eligibility of such proposed nominee to serve as an independent director of the corporation or that could be material to a
reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.
(d)
Business
to be Conducted.
Only such persons who are nominated in accordance with the procedures set forth in this Section 2.2 shall
be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought
before the meeting in accordance with the procedures set forth in this Section 2.2. Except as otherwise provided by law, the
chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought
before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and,
if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination
shall not be presented for stockholder action at the meeting and shall be disregarded.
(e)
Compliance
with Federal Securities Laws.
Notwithstanding the foregoing provisions of this Section 2.2, in order to include information
with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, a stockholder
must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to matters
set forth in this Section 2.2; however, any references in these Bylaws to the 1934 Act or the rules promulgated thereunder
are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be
considered pursuant to this Section 2.2. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request
inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act.
(f)
Public
Announcement.
For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported
by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation
with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act and the rules and regulations
promulgated thereunder.
(g)
Eligibility
of Stockholder-Proposed Nominees.
To be eligible to be a stockholder-proposed nominee for election or reelection as a director
of the corporation in accordance with Section 2.2 or 2.3, a person must deliver (in accordance with the time periods prescribed
for delivery of notice under Sections 2.2 and 2.3, as applicable) to the Secretary at the principal executive offices of the
corporation a written questionnaire with respect to the background and qualification of such person and the background of any other
person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written
request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person
(A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any
commitment or assurance to, any person or entity as to how such person, if elected as a director of the corporation, will act or
vote on any issue or question (a “
Voting Commitment
”) that has not been disclosed to the corporation or (2) any
Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the corporation,
with such person’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement
or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement
or indemnification in connection with service or action as a director that has not been disclosed therein, and (C) in such
person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be
in compliance, if elected as a director of the corporation, and will comply with all applicable publicly disclosed corporate governance,
conflict of interest, confidentiality and stock trading policies and guidelines of the corporation.
2.3. Special
Meetings.
(a)
Right
to Call.
Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the
Chairman of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution
adopted by the affirmative vote of a majority of the directors then in office.
(b)
Time,
Place and Purpose.
The Board of Directors shall determine the time and place of such special meeting. Upon determination of
the time and place of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote,
in accordance with the provisions of Section 2.4 of these Bylaws. No business may be transacted at such special meeting other
than the business specified in the notice of meeting. Nothing contained in this paragraph (b) shall be construed as limiting,
fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.
(c)
Nominations.
Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors
are to be elected pursuant to the corporation’s notice of meeting (i) by or at the direction of the Board of Directors
or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder
of the corporation who is a stockholder of record at the time of giving notice provided for in this paragraph who shall be entitled
to vote at the meeting and who complies with the notice procedures set forth in Section 2.2 of these Bylaws. If the corporation
calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such position(s) as specified in the corporation’s
notice of meeting, if the stockholder’s notice and other materials required by Section 2.2(c) of these Bylaws (including
the completed and signed questionnaire, representation and agreement required by Section 2.2(g)) shall be delivered to the
Secretary at the principal executive offices of the corporation not earlier than the close of business on the one hundred twentieth
(120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior
to such meeting or, if the first public announcement of the date of such special meeting is less than 100 days prior to the date
of such special meeting, the tenth (10th) day following the day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement
of an adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.
(d)
Nominations
by Stockholders.
Notwithstanding the foregoing provisions of this Section 2.3, a stockholder must also comply with all
applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to matters set forth in this Section 2.3;
however, any references in these Bylaws to the 1934 Act or the rules promulgated thereunder are not intended to and shall not limit
the requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.3.
Nothing in these Bylaws shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the
corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of
Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws. Subject to Rule
14a-8 under the Exchange Act, nothing in these Bylaws will be construed to permit any stockholder, or give any stockholder the
right, to include or have disseminated or described in the corporation’s proxy statement any nomination of director or directors
or any other business proposal.
2.4. Notice
of Meetings.
Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of
stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting. Such notice shall specify the place, if any, and date and hour of the meeting; in the case of
special meetings, the purpose or purposes of the meeting; and the means of remote communications, if any, by which stockholders
and proxy holders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited
in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the
records of the corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing,
signed by the person entitled to notice thereof, or by electronic transmission by such person, either before or after such meeting,
and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by
proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such
meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
2.5. Quorum.
At all meetings of stockholders, except where otherwise provided by statute or by the Certificate of Incorporation or these
Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority
of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of
a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of
the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders
present at a duly called or convened meeting at which a quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute, by
applicable stock exchange rules, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election
of directors the affirmative vote of the majority of shares present in person, by remote communication, if applicable, or represented
by proxy at the meeting and entitled to vote generally on the subject matter shall be the act of the stockholders. Except as otherwise
provided by statute, the Certificate of Incorporation or these Bylaws, the election of directors shall be by a plurality of the
votes present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally
on the election of directors. Where a separate vote by a class or classes or series is required, except as otherwise provided by
statute or by the Certificate of Incorporation or these Bylaws, a majority of the outstanding shares of such class or classes or
series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a
quorum entitled to take action with respect to the vote on that matter. Except as otherwise provided by statute or by the Certificate
of Incorporation or these Bylaws, the affirmative vote of the majority (except in the case of the election of directors) of shares
of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting
shall be the act of such class or classes or series. Except as otherwise provided by statute or by the Certificate of Incorporation
or these Bylaws, the affirmative vote of a plurality of shares of such class or classes or series present in person, by remote
communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series in the
case of the election of directors.
2.6. Adjournment
and Notice of Adjourned Meetings.
Any meeting of stockholders, whether annual or special, may be adjourned from time to time
either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if
applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not
be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
2.7. Voting
Rights.
For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise
provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided
in Section 2.9 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall
have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy
granted in accordance with Delaware law. An agent so appointed need not be a stockholder.
2.8. Joint
Owners of Stock.
If shares or other securities having voting power stand of record in the names of two (2) or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two
(2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice
to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it
is so provided, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, the voting person’s
act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; (c) if more than one (1)
votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally,
or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed
with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c)
shall be a majority or even-split in interest.
2.9. List
of Stockholders.
The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, (a) on a reasonably accessible electronic network, provided that the information required
to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal
place of business of the corporation. If the corporation determines to make the list available on an electronic network, the corporation
may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list shall
be open to examination of any stockholder during the time of the meeting as provided by law.
2.10. Action
Without a Meeting.
No action shall be taken by the stockholders except at an annual or special meeting of stockholders called
in accordance with these Bylaws, and no action shall be taken by the stockholders by written consent or by electronic transmission.
2.11. Organization
of Meetings
.
(a)
Chairman
of the Meeting.
At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed
or is absent, the Chief Executive Officer, or, if the Chief Executive Officer is absent, the President, or, if the President is
absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by
proxy, shall act as chairman. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the President,
shall act as secretary of the meeting.
(b)
Conduct
of Meeting.
The Board of Directors of the corporation shall be entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board
of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of
the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders
of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions
or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted
on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at
the meeting shall be announced at the meeting. Unless and except to the extent determined by the Board of Directors or the chairman
of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
ARTICLE
3
Directors
3.1. Number
and Term of Office.
The authorized number of directors of the corporation shall be fixed in accordance with the Certificate
of Incorporation. Directors need not be stockholders unless so required by the Certificate of Incorporation or Section 2.2(g)
of these Bylaws. If for any reason the directors shall not have been elected at an annual meeting, they may be elected as soon
thereafter as convenient at a special meeting of the stockholders called for that purpose in the manner provided in these Bylaws.
Each director shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation
or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent
director.
3.2. Powers.
The powers of the corporation shall be exercised, its business conducted and its property controlled by the Board of Directors,
except as may be otherwise provided by statute or by the Certificate of Incorporation.
3.3. Vacancies.
Unless otherwise provided in the Certificate of Incorporation, and subject to the rights of the holders of any series of Preferred
Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and
any newly created directorships resulting from any increase in the number of directors shall, unless the Board of Directors determines
by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by the affirmative
vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining
director,
provided, however
, that whenever the holders of any class or classes of stock or series thereof are entitled to
elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of
such class or classes or series shall, unless the Board of Directors determines by resolution that any such vacancies or newly
created directorships shall be filled by stockholders, be filled by a majority of the directors elected by such class or classes
or series thereof then in office, or by a sole remaining director so elected. Any director elected in accordance with the preceding
sentence shall hold office until such director’s successor shall have been elected and qualified or until his or her earlier
death, resignation or removal.
3.4. Resignation.
Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary,
such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure
of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors.
When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then
in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion
of the term of the director whose place shall be vacated and until his or her successor shall have been duly elected and qualified
or until his or her earlier death, resignation or removal.
3.5. Meetings.
(a)
Regular
Meetings.
Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be
held at any time or date and at any place within or without the State of Delaware which has been designated by the Board of Directors
and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system
designed to record and communicate messages, facsimile, electronic mail or other electronic means. No further notice shall be required
for regular meetings of the Board of Directors.
(b)
Special
Meetings.
Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may
be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board, the Chief
Executive Officer or a majority of the directors then in office.
(c)
Meetings
by Electronic Communications Equipment.
Any member of the Board of Directors, or of any committee thereof, may participate
in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d)
Notice
of Special Meetings.
Notice of the time and place of all special meetings of the Board of Directors shall be given orally or
in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages,
facsimile, electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the
date and time of the meeting. If notice is sent by US mail, it shall be sent by first class mail, charges prepaid, at least three
(3) days before the date of the meeting. Notice of any meeting may be waived in writing, or by electronic transmission, at any
time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the
meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
(e)
Waiver
of Notice.
The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called
or noticed, or wherever held, shall be as valid as though taken at a meeting duly held after regular call and notice, if a quorum
is present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign
a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate
records or made a part of the minutes of the meeting.
3.6. Quorum
and Voting.
(a) Unless
the Certificate of Incorporation requires a greater number, and except with respect to questions related to indemnification arising
under Article 5 for which a quorum shall be one-third of the directors then in office, a quorum of the Board of Directors
shall consist of a majority of the of the directors then in office; provided, however, at any meeting whether a quorum is present
or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting
of the Board of Directors, without notice other than by announcement at the meeting.
(b) At
each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative
vote of a majority of the directors present, unless a different vote is required by law, the Certificate of Incorporation or these
Bylaws.
3.7. Action
Without a Meeting.
Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all
members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and
such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or
committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the
minutes are maintained in electronic form.
3.8. Fees
and Compensation.
Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors,
including, if so approved by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance
at each regular or special meeting of the Board of Directors and any meeting of a committee of the Board of Directors. Nothing
herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor.
3.9. Chairman
of the Board.
The Board of Directors may elect or appoint a Chairman of the Board who, if elected or appointed, shall preside
at all meetings of the Board of Directors and of the stockholders. The Chairman of the Board of Directors shall perform other duties
commonly incident to the office and shall perform such other duties and have such other powers, as the Board of Directors shall
designate from time to time.
3.10. Committees.
(a)
Executive
Committee.
The Board of Directors may appoint an Executive Committee to consist of one (1) or more members of the Board of
Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors appointing
such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it;
but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the
stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted
to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the corporation.
(b)
Other
Committees.
The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other
committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have
such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event
shall any such committee have the powers denied to the Executive Committee in these Bylaws.
(c)
Term.
The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of subsections (a)
or (b) of this Section 3.10, may at any time increase or decrease the number of members of a committee or terminate the existence
of a committee. The membership of a committee member shall terminate on the date of his or her death or voluntary resignation from
the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee
member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number
of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification
of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or
not they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member.
(d)
Meetings.
Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed
pursuant to this Section 3.10 shall be held at such times and places as are determined by the Board of Directors, or by any
such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings
need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to
time by such committee, and may be called by any Director who is a member of such committee, upon notice to the members of such
committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the
Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee
may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except
when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in
the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee
shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a
quorum is present shall be the act of such committee.
3.11. Organization
of Meetings
. At each meeting of the directors, the Chairman of the Board of Directors, or, if a Chairman has not been appointed
or is absent, the Chief Executive Officer (if a director), or, if the Chief Executive Officer is absent, the President (if a director),
or if the President is absent, the most senior Vice President (if a director), or, in the absence of any such person, a chairman
of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his or her absence,
any Assistant Secretary or other officer, director or other person directed to do so by the chairman of the meeting or the Board
of Directors, shall act as secretary of the meeting.
ARTICLE
4
Officers
4.1. Number
and Designation.
The Board of Directors shall appoint a Chief Executive Officer, a Chief Financial Officer, and a Secretary
and may elect or appoint a President, Vice Presidents, a Secretary, a Treasurer and such other officers and agents as it may from
time to time determine. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem
appropriate. Any number of offices may be held by the same person.
4.2. Appointment
and Term of Office.
Unless otherwise provided at the time of election or appointment, each officer shall hold office at the
pleasure of the Board of Directors and until such officer’s successor is elected and qualified or until such officer’s
earlier death, resignation, or removal.
(a)
Resignation.
Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors, the
Chief Executive Officer or the Secretary. Any such resignation shall be effective when received by the person or persons to whom
such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective.
Any resignation shall be without prejudice to the rights or obligations, if any, of the resigning officer or the corporation under
any contract with the resigning officer.
(b)
Removal.
Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of
the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee
upon whom such power of removal may have been conferred by the Board of Directors, or by the Chief Executive Officer or other superior
officers upon whom such power of removal may have been conferred by the Board of Directors. Any removal shall be without prejudice
to the rights or obligations, if any, of such officer or the corporation under any contract with such officer.
4.3. Vacancies
in Offices.
If there be a vacancy in any office of the corporation, by reason of death, resignation, removal or otherwise,
such vacancy may be filled for the unexpired term by the Board of Directors.
4.4. Duties
of Officers.
(a)
Chief
Executive Officer.
The Chief Executive Officer shall (a) have general active management of the business of the corporation;
(b) in the absence of the Chairman of the Board, or if no Chairman shall have been elected, preside at all meetings of the Board
of Directors and of the stockholders; (c) see that all orders and resolutions of the Board of Directors are carried into effect;
(d) sign and deliver in the name of the corporation any deeds, mortgages, bonds, contracts, certificates for shares or other instruments
pertaining to the business of the corporation, except in cases in which the authority to sign and deliver is required by law to
be exercised by another person or is expressly delegated by the articles or these Bylaws or by the Board of Directors to some other
officer or agent of the corporation; and (e) perform other duties prescribed by the Board of Directors.
(b)
Chief
Financial Officer.
The Chief Financial Officer shall (a) keep accurate financial records for the corporation; (b) deposit all
moneys, drafts and checks in the name of and to the credit of the corporation in the banks and depositories designated by the Board;
(c) endorse for deposit all notes, checks and drafts received by the corporation as ordered by the Board, making proper vouchers
therefor; (d) disburse corporate funds and issue checks and drafts in the name of the corporation, as ordered by the Board; (e)
render to the Board and the Chief Executive Officer, whenever requested, an account of all transactions by the Chief Financial
Officer and of the financial condition of the corporation; (f) perform other duties prescribed by the Board or by the Chief Executive
Officer; and (g) if required by the Board, give a bond for the faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board shall determine.
(c)
President;
Vice President.
Unless otherwise determined by the Board of Directors, the President shall be the Chief Executive Officer.
If an officer other than the President is designated Chief Executive Officer, the President shall perform such duties as may from
time to time be assigned to the president by the Board of Directors. Each Vice President shall have such powers and shall perform
such duties as may be specified in these Bylaws or prescribed by the Board of Directors. In the event of absence or disability
of the President, the Board of Directors may designate a Vice President or Vice Presidents to succeed to the power and duties of
the President. In the absence of the Chief Executive Officer or in the event of his or her death, inability or refusal to act,
the President (if one is elected or appointed) or the Vice President (or in the event there be more than one Vice President, the
Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order
of their election) shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the Chief Executive Officer. The President or any Vice President may sign, with the Secretary
or an assistant secretary, certificates for shares of the corporation, and shall perform other duties prescribed by the Board of
Directors or by the Chief Executive Officer.
(d)
Secretary.
The Secretary shall (a) maintain records of and, whenever necessary, certify all proceedings of the Board of Directors and the
stockholders; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law;
(c) be custodian of the corporate records and of the corporate seal, if any; (d) see that a share register of the corporation is
maintained in accordance with Section
Error! Reference source not found.
of these Bylaws; (e) sign with the Chief Executive
Officer, the President or a Vice President, certificates for shares of the corporation; and (f) perform other duties prescribed
by the Board of Directors or by the Chief Executive Officer.
(e)
Treasurer.
Unless otherwise determined by the Board of Directors, the Treasurer shall be the Chief Financial Officer. If an officer other
than the Treasurer is designated Chief Financial Officer, the Treasurer shall perform such duties as may be prescribed by the Board
of Directors or the Chief Executive Officer from time to time.
(f)
Other
Officers.
The Board of Directors may appoint one or more Assistant Secretaries, one or more Assistant Treasurers, and such
other officers, agents and employees as the Board of Directors may deem advisable. Each officer, agent or employee so appointed
shall hold office at the pleasure of the Board of Directors and shall perform such duties as may be assigned by the Board of Directors,
Chief Executive Officer or President.
4.5. Delegation
of Authority.
The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer
or agent, notwithstanding any provision hereof.
ARTICLE
5
Indemnification
5.1. Indemnification
of Directors, Officers, Employees and Other Agents.
(a)
Directors
and Officers.
The corporation shall indemnify its current and former directors and officers to the fullest extent not prohibited
by the DGCL or any other applicable law;
provided, however
, that the corporation may modify the extent of such indemnification
by individual contracts with its directors and officers; and,
provided, further,
that the corporation shall not be required
to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the
corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested
in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under Section
5.3. Except as provided in Section 5.5, the corporation shall not be obligated to indemnify any director or officer in connection
with any proceeding brought by or on behalf of the corporation against such director or officer that is authorized by the corporation’s
Board of Directors.
(b)
Employees
and Other Agents.
The corporation shall have power to indemnify its employees and other agents as set forth in the DGCL or
any other applicable law. The Board of Directors shall have the power to delegate the determination of whether indemnification
shall be given to any such person to such officers or other persons as the Board of Directors shall determine.
5.2. Advancement
of Expenses.
The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact
that he or she is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition
of the proceeding, promptly following request therefor, all expenses actually and reasonably incurred by any director or officer
in connection with such proceeding; provided, however, that an advancement of expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking
(hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately
be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”)
that such indemnitee is not entitled to be indemnified for such expenses under this Article 5 or otherwise.
Notwithstanding the
foregoing, unless otherwise determined pursuant to Section 5.4, no advance shall be made by the corporation to an officer
of the corporation (except by reason of the fact that such officer is or was a director of the corporation in which event this
paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination
is reasonably and promptly made (i) by a majority vote of directors who were not parties to the proceeding, even if not a
quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a
quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion,
that the facts known to the decision-making party at the time such determination is made demonstrate that such person acted in
bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation, or
with respect to any criminal action or proceeding, that such person had reasonable cause to believe that his or her conduct was
unlawful.
5.3. Enforcement.
Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and officers
under this Bylaw shall be deemed to be vested contractual rights and be effective to the same extent and as if provided for in
a contract between the corporation and the director or officer. Such rights shall be deemed to have vested as of the effective
date of this Bylaw. Any right to indemnification or advances granted by this Article 5 to a director or officer shall be enforceable
by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification
or advances is denied, in whole or in part, by the corporation, or (ii) no disposition of such claim is made by the corporation
within ninety (90) days of request therefor. The claimant in such enforcement action, if successful in whole or in part, shall
be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation
shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it
permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. In
connection with any claim by an officer of the corporation (except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such officer is or was a director of the corporation) for advances,
the corporation shall be entitled to raise as a defense to any such action that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests of the corporation, or with respect to any criminal action
or proceeding that such person acted without reasonable cause to believe that his or her conduct was lawful. Neither the failure
of the corporation (including its Board of Directors or independent legal counsel) to have made a determination prior to the commencement
of such enforcement action that indemnification of, or advancement to, the claimant is proper in the circumstances because he or
she has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by
the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable
standard of conduct. In any suit brought by a director or officer to enforce a right to indemnification or to an advancement of
expenses hereunder, the burden of proving that the director or officer is not entitled to be indemnified, or to such advancement
of expenses, under this Article 5 or otherwise shall be on the corporation.
5.4. Non-Exclusivity
of Rights.
The rights conferred on any person by this Article 5 shall not be exclusive of any other right which such person
may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote
of stockholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or
all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited
by the DGCL or by any other applicable law.
5.5. Indemnification
for Expenses of Successful Party.
Notwithstanding the limitations of any other provisions of these Bylaws, to the extent that
a director or officer is successful on the merits or otherwise in defense of any proceeding, or in defense of any claim, issue
or matter therein, including, without limitation, the dismissal of any action without prejudice, or if it is ultimately determined
that the director or officer is otherwise entitled to be indemnified against expenses, the director and/or officer shall be indemnified
against all expenses actually and reasonably incurred in connection therewith. If the director or officer is partially successful
on the merits or otherwise in defense of any proceeding, such indemnification shall be apportioned appropriately to reflect the
degree of success.
5.6. Survival
of Rights.
The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director,
officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
5.7. Insurance.
To the fullest extent permitted by the DGCL or any other applicable law, the corporation, upon approval by the Board of Directors,
may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Article 5.
5.8. Amendments.
Any repeal or modification of this Article 5 shall only be prospective and shall not affect the rights under this Article 5
in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any
agent of the corporation.
5.9. Saving
Clause.
If this Article 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction,
then the corporation shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable
portion of this Article 5 that shall not have been invalidated or by any other applicable law. If this Article 5 shall
be invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify
each director and officer to the full extent under any other applicable law.
5.10. Certain
Definitions.
For the purposes of this Bylaw, the following definitions shall apply:
(a) The
term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation,
prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative.
(b) The
term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees,
witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in
connection with any proceeding.
(c) References
to a “director,” “officer,” “employee,” or “agent” of the corporation shall include,
without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, officer,
employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
(d) References
to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation”
shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services
by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and
a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation”
as referred to in this Article 5.
ARTICLE
6
Shares Of Stock
6.1. Form
and Execution of Certificates.
The shares of the corporation shall be represented by certificates, or shall be uncertificated,
or a combination thereof. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate
of Incorporation and applicable law. Every holder of stock represented by certificate in the corporation shall be entitled to have
a certificate signed by or in the name of the corporation by the Chairman of the Board of Directors, the Chief Executive Officer,
the President or any Vice President and the Chief Financial Officer, Treasurer or Assistant Treasurer, or the Secretary or Assistant
Secretary, certifying the number of shares owned by such stockholder in the corporation. Any or all of the signatures on the certificate
may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may
be issued with the same effect as if he or she were such officer, transfer agent, or registrar at the date of issue. Each certificate
shall state upon the face or back thereof, in full or in summary, all of the powers, designations, preferences, and rights, and
the limitations or restrictions of the shares authorized to be issued or shall, except as otherwise required by law, set forth
on the face or back a statement that the corporation will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional, or other special rights of each class of stock or series thereof
and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance
or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the
information required to be set forth or stated on certificates pursuant to this section or otherwise required by law or with respect
to this section a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations,
preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
6.2. Lost
Certificates.
A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued
by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the
issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the
owner’s legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation
a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen, or destroyed.
6.3. Transfers.
(a) Transfers
of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney
duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or
certificates for a like number of shares.
(b) The
corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes
of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by
such stockholders in any manner not prohibited by the DGCL.
6.4. Fixing
Record Dates.
(a) In
order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, subject to applicable
law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the
Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however,
that
the Board of Directors may fix a new record date for the adjourned meeting.
(b) In
order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or
allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date
shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more
than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
6.5. Registered
Stockholders.
The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
ARTICLE
7
General Provisions
7.1. Fiscal
Year.
The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.
7.2. Corporate
Seal.
The Board of Directors may adopt a corporate seal. The corporate seal shall consist of a die bearing the name of the
corporation and the inscription, “Corporate Seal-Delaware.” The corporate seal, if adopted, may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
7.3. Notices.
(a)
Notice
to Stockholders.
Written notice to stockholders of stockholder meetings shall be given as provided in Section 3.4 herein.
Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract
with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder
meetings may be sent by US mail or nationally recognized overnight courier, or by facsimile, electronic mail or other electronic
means.
(b)
Notice
to Stockholders Sharing an Address.
Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL,
the Certificate of Incorporation or these Bylaws shall be effective if given by a single written notice to stockholders who share
an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed
to have been given if such stockholder fails to object in writing to the corporation within 60 days of having been given notice
by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice
to the corporation.
(c)
Notice
to Directors.
Any notice required to be given to any director may be given by the method stated in subsection (a), as
otherwise provided in these Bylaws, or by overnight delivery service, facsimile, except that such notice other than one which is
delivered personally shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the
absence of such filing, to the last known post office address of such director.
(d)
Methods
of Notice.
It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice,
but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed
in respect of any other or others.
(e)
Affidavit
of Notice.
An affidavit, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed
with respect to the class of stock affected, or other agent, specifying the name and address or the names and addresses of the
stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method
of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(f)
Notice
to Person with Whom Communication is Unlawful.
Whenever notice is required to be given, under any provision of law or of the
Certificate of Incorporation or these Bylaws, to any person with whom communication is unlawful, the giving of such notice to such
person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit
to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice had been duly given. If the action taken by the
corporation requires the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact
and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication
is unlawful.
7.4. Dividends.
(a)
Declaration
of Dividends.
Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation
and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation
and applicable law.
(b)
Dividend
Reserve.
Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends
such sum or sums as the Board of Directors from time to time, in their absolute discretion, deem proper as a reserve or reserves
to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such
other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created.
7.5. Voting
of Securities Owned by the Corporation.
All stock and other securities of other corporations owned or held by the corporation
for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the
person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of
the Board of Directors, the Chief Executive Officer, the President, or any Vice President.
7.6. Execution
of Corporate Instruments.
The Board of Directors may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign
on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except
where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation.
All checks and drafts
drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall
be signed by such person or persons as the Board of Directors shall authorize so to do.
Unless authorized or
ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power
or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose
or for any amount.
7.7. Execution
of Other Securities.
All bonds, debentures and other corporate securities of the corporation, other than stock certificates
(covered in Section 6.1), may be signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President
or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the
Chief Financial Officer or Treasurer or an Assistant Treasurer;
provided, however,
that where any such bond, debenture or
other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee
under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons
signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of
the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated
by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as
may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer
who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon
or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so
signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the
corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used
thereon had not ceased to be such officer of the corporation.
ARTICLE
8
EXCLUSIVE FORUM FOR CERTAIN ACTIONS
8.1. Exclusive
Forum.
Unless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for
(i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of breach
of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation’s
stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or the Certificate of Incorporation
or these Bylaws, (iv) any action asserting a claim governed by the internal affairs doctrine, or (v) any other action
asserting an internal corporate claim, as defined in Section 115 of the DGCL, shall be the Court of Chancery of the State of Delaware
(or, if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware or, if no state
court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware), in all cases
subject to such court’s having personal jurisdiction over the indispensable parties named as defendants. Any person or entity
purchasing or otherwise acquiring any interest in shares of capital stock of the corporation shall be deemed to have notice of
and consented to the provisions of this Article.
8.2. Enforcement.
If any action the subject matter of which is within the scope of Section 8.1 above is filed in a court other than a court
located within the State of Delaware (a “
Foreign Action
”) in the name of any stockholder, such stockholder shall
be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware
in connection with any action brought in any such court to enforce Section 8.1 above (an “
FSC Enforcement Action
”)
and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s
counsel in the Foreign Action as agent for such stockholder.
ARTICLE
9
Amendments
9.1. Amendments.
Subject to the limitations set forth in Section 5.8 of these Bylaws or the provisions of the Certificate of Incorporation,
the Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation. Any adoption, amendment
or repeal of the Bylaws of the corporation by the Board of Directors shall require the approval of a majority of the directors
then in office. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the corporation; provided, however,
that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate
of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to
vote generally in the election of directors, voting together as a single class.
CERTIFICATION OF
BYLAWS
The undersigned hereby
certifies that the foregoing Bylaws of Celcuity Inc. were adopted pursuant to an Action by Written Consent of the Board of Directors
effective as of the ___ day of September, 2017.
[Certification of Bylaws]
Exhibit 4.1
INCORPORATED UNDER
THE LAWS OF THE STATE OF DELAWARE SEE REVERSE SIDE FOR CERTAIN DEFINITIONS CUSIP 15102K 10 0
THIS CERTIFIES THAT is the owner
of
FULLY PAID AND NON-ASSESSABLE COMMON SHARES, $0.001 PAR VALUE, OF CELCUITY INC.
transferable
on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this certificate properly endorsed.
This certificate is not valid until countersigned and registered by the Transfer Agent and Registrar. IN WITNESS WHEREOF, the
said Corporation has caused this certificate to be signed by facsimile signatures of its duly authorized officers. Dated:
SECRETARY
CHAIRMAN & CHIEF EXECUTIVE OFFICER COUNTERSIGNED AND REGISTERED: Continental Stock Transfer & Trust Co. TRANSFER AGENT
AND REGISTRAR BY AUTHORIZED SIGNATURE
THE BOARD OF THIS
CORPORATION HAS THE AUTHORITY TO CREATE AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF CLASSES OR SERIES OF SHARES OF CAPITAL
STOCK OTHER THAN COMMON STOCK. THIS CORPORATION WILL FURNISH TO ANY STOCKHOLDER UPON WRITTEN REQUEST SENT TO ITS PRINCIPAL EXECUTIVE
OFFICES, AND WITHOUT CHARGE, A FULL STATEMENT OF THE BOARD’S AUTHORITY TO CREATE AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES
OF CLASSES OR SERIES OF SHARES OF CAPITAL STOCK AS WELL AS THE DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF THE
SHARES OF EACH CLASS OR SERIES THEN OUTSTANDING OR AUTHORIZED TO BE ISSUED. The following abbreviations, when used in the inscription
on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM – as tenants in common UTMA – Custodian (Cust) (Minor) TEN ENT as tenants by entireties under Uniform Transfers
to Minors JT TEN – as joint tenants with right of survivorship and not as tenants in common Act (State) Additional abbreviations
may also be used though not in the above list.
For value received hereby sell, assign, and transfer unto
PLEASE INSERT
SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE)
Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.
Dated
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. SIGNATURE GUARANTEED ALL GUARANTEES MUST BE MADE BY
A FINANCIAL INSTITUTION (SUCH AS A BANK OR BROKER) WHICH IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM
(“STAMP”), THE NEW YORK STOCK EXCHANGE, INC. MEDALLION SIGNATURE PROGRAM (“MSP”), OR THE STOCK EXCHANGES
MEDALLION PROGRAM (“SEMP”) AND MUST NOT BE DATED. GUARANTEES BY A NOTARY PUBLIC ARE NOT ACCEPTABLE.
Exhibit 4.2
THIS WARRANT AND THE UNDERLYING SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
Securities
ACT”) OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION THEREFROM.
This
Warrant is subject to restrictions on transfer and may not be sold, transferred, assigned, pledged, or hypothecated, or be the
subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition
of this Warrant or the Shares acquirable upon exercise hereof, other than in compliance with Rule 5110(g) of the Financial Industry
Regulatory Authority, Inc. and Section 7 hereof.
WARRANT
To Subscribe for and Purchase
Shares of Common Stock of
CELCUITY
Inc.
Date: [_________], 2017
THIS CERTIFIES THAT,
for value received, Craig-Hallum Capital Group LLC, or its registered assigns, (herein referred to as the “
Purchaser
”
or “
holder
”), is entitled to subscribe for and purchase from Celcuity Inc., a Delaware corporation (herein called
the “
Company
”), ____________ (____________) shares (the “
Shares
”) of common stock, par value
$0.001 per share (the “
Common Stock
”), of the Company (subject to adjustment as noted below) at the exercise
price of $[____] per Share (the “
Warrant Purchase Price
”) (subject to adjustment as noted below). This Warrant
may only be exercised during the Exercise Period specified herein. This Warrant has been issued pursuant to the Underwriting Agreement,
dated [______], 2017, between the Company and the Purchaser as representative of the several underwriters listed in Schedule I
thereto, in connection with a public offering (the “
Offering
”) of [_______] shares of Common Stock.
This Warrant is subject
to the following provisions, terms and conditions:
1.
The
Warrant exercise period (the “
Exercise Period
”) for this Warrant shall begin the effective date of the Offering
and shall end on the fifth (5
th
) anniversary of the effective date of the Offering. As used herein, the “effective
date of the Offering” means [
insert pricing date
], 2017.
2.
The
rights represented by this Warrant may be exercised, in whole or in part, by the holder hereof as follows:
(a) The
holder hereof shall deliver to the Company written notice of exercise of this Warrant and in connection therewith shall surrender
this Warrant (properly endorsed if required) at the principal office of the Company and pay the Warrant Purchase Price for such
Shares as provided for herein.
(b) The
holder hereof shall pay the Warrant Purchase Price (i) in immediately available funds or (ii) by “cashless exercise”,
in which event the Company shall issue to the holder hereof a number of Shares determined as follows:
X = Y * [(A-B)/A]
where:
X = the number of Shares
to be issued to the holder.
Y = the
total number of Shares with respect to which this Warrant is being exercised.
A = the
fair market value of one Share at the time the “cashless exercise” election is made.
B = the
Warrant Purchase Price then in effect for the Shares at the “cashless exercise” election is made.
For purposes of this Warrant, the
fair market value of one Share as of a particular date shall be determined as follows: (i) if the Common Stock is traded on a U.S.
national securities exchange, the value shall be deemed to be the average of the closing prices of the Common Stock on such exchange
over the 10-Trading Day period ending on the Trading Day prior to the net exercise election; (ii) if clause (i) is not applicable,
the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) of the Common Stock on
the principal securities exchange or securities market on which the Common Stock trades over the 10-Trading Day period ending on
the Trading Day prior to the net exercise election; and (iii) if none of the foregoing is applicable, the value shall be the fair
market value of one share of Common Stock mutually agreed upon by the holder and the Company; provided, that if the Company and
the holder are unable to agree upon the fair market value of a Share, then the board of directors of the Company shall use its
good faith judgment to determine the fair market value, and such determination shall be binding upon all parties absent demonstrable
error.
For purposes of this Warrant, “
Trading
Day
” means any day on which the Common Stock is traded on a U.S. stock exchange or, if inapplicable, the principal securities
exchange or securities market on which the Common Stock is then traded.
(c) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than three Trading Days after the date this Warrant
is exercised in accordance with its terms) issue or cause to be issued and cause to be delivered to or upon the written order of
the holder and in such name or names as the holder may designate (provided that, if the holder directs the Company to deliver a
certificate for the Shares in a name other than that of the holder or an affiliate (as defined in Rule 405 under the Securities
Act of 1933, as amended (the “
Securities Act
”)) of the holder, it shall deliver to the Company on the date of
exercise an opinion of counsel reasonably satisfactory to the Company to the effect that the issuance of such Shares in such other
name may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable
state securities or blue sky laws), a certificate for the Shares issuable upon such exercise or credit for such Shares through
the facilities of The Depository Trust Company (“
DTC
”) to the account designated by the holder (with any restrictive
legends required by applicable securities laws). The form of delivery of the Shares acquired upon exercise will be at the election
of the holder, subject to the other terms of this Warrant. The holder, or any person permissibly so designated by the holder to
receive the Shares acquired upon exercise hereof, shall be deemed to have become the holder of record of such Shares as of the
date notice of exercise of payment of the applicable Warrant Purchase Price is made in accordance with the terms hereof.
(d) If
by the fifth Trading Day after the date this Warrant is exercised in accordance with this Section 2 the Company fails to deliver
the required number of Shares in the manner required pursuant to Section 2(c), then, in addition to any other remedy the holder
may have at law or in equity (including a decree of specific performance or injunctive relief), the holder hereof will have the
right to rescind such exercise.
(e) In
the event that this Warrant has not been exercised prior to the end of the Exercise Period and the fair market value of one Share
as determined in accordance with the provisions hereof exceeds the Warrant Purchase Price on the last day of the Exercise Period,
on such date this Warrant will be automatically exercised pursuant to the cashless exercise provisions set forth in Section 2(b);
provided, that the holder hereof, upon the request of the Company, must surrender to the Company of this Warrant within 30 days
of a request for delivery of thereof by the Company. If the holder hereof does not surrender this Warrant within such time period,
this Warrant will be deemed to not have been exercised under this Section 2(e) and will terminate and no longer be exercisable.
3. The Company represents and warrants that this Warrant has been duly authorized by all necessary corporate action, has been duly
executed and delivered and is a legal and binding obligation of the Company, enforceable against the Company in accordance with
the terms of this Warrant, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of equity. The Company covenants and agrees that
all Shares which may be issued upon the exercise of the rights represented by this Warrant according to the terms hereof have been
duly authorized and will, upon issuance and payment therefor, be validly issued and fully paid. The Company further covenants and
agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times
have authorized, and reserved for the purpose of issue upon exercise of the subscription rights evidenced by this Warrant, a sufficient
number of its shares of Common Stock to provide for the exercise of the rights represented by this Warrant, free from preemptive
rights or other actual contingent purchase rights other than those held by a holder of this Warrant (as a result of holding this
Warrant).
4. The
Company will pay any documentary stamp taxes attributable to the issuance of Shares upon the exercise of this Warrant;
provided,
however
, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in
the registration of any certificates for Warrants, or Shares issued upon exercise of this Warrant, in a name other than that of
the Purchaser. The Purchaser shall be responsible for all other tax liability that may arise as a result of holding or transferring
this Warrant or receiving Shares upon exercise hereof.
5. The
above provisions are, however, subject to the following:
(a) The
Warrant Purchase Price shall, from and after the date of issuance of this Warrant, be subject to adjustment from time to time as
hereinafter provided. Upon each adjustment of the Warrant Purchase Price, the holder of this Warrant shall thereafter be entitled
to purchase, at the Warrant Purchase Price resulting from such adjustment, the number of Shares obtained by multiplying the Warrant
Purchase Price in effect immediately prior to such adjustment by the number of Shares purchasable pursuant hereto immediately prior
to such adjustment and dividing the product thereof by the Warrant Purchase Price resulting from such adjustment.
(b) In
case the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares, the Warrant
Purchase Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of shares, the Warrant Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
(c) If
any capital reorganization or reclassification of the capital stock of the Company, shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock or securities with respect to or in exchange for Common Stock, then, as a condition
of such reorganization, reclassification or consolidation, lawful and adequate provision shall be made whereby the holder hereof
shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in this Warrant
and in lieu of the Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby,
such shares of stock or securities as may be issued or payable with respect to or in exchange for a number of Shares equal to the
number of Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby had such
reorganization, reclassification or consolidation not taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of the holder of this Warrant to the end that the provisions hereof (including without limitation
provisions for adjustments of the warrant purchase price and of the number of shares purchasable upon the exercise of this Warrant)
shall thereafter be applicable, as nearly as may be, in relation to any shares of stock or securities thereafter deliverable upon
the exercise hereof.
(d) Upon
any adjustment of the Warrant Purchase Price or any adjustment of any material terms hereof, then and in each such case an officer
of the Company shall, as soon as practicable after the occurrence of any event that requires an adjustment or readjustment, give
signed written notice thereof, by first–class mail, postage prepaid, addressed to the registered holder of this Warrant at
the address of such holder as shown on the books of the Company, which notice shall state the Warrant Purchase Price resulting
from such adjustment, any material change in the terms of the Warrant, and the increase or decrease, if any, in the number of Shares
purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
(e) If
at any time during the Exercise Period:
(i)
there shall be any capital reorganization, or reclassification of the capital stock of the Company; or
(ii)
there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;
then, in any
one or more of said cases, the Company shall give written notice, by first–class mail, postage prepaid, addressed to the
registered holder of this Warrant at the address of such holder as shown on the books of the Company, of the date on which (A)
the books of the Company shall close or a record shall be taken for such distribution or subscription rights, or (B) such reorganization,
reclassification or consolidation, dissolution, liquidation or winding up, or conversion or redemption shall take place, as the
case may be. Such notice shall also specify the date as of which the holders of capital stock of record shall participate in such
distribution or subscription rights, or shall be entitled to exchange their capital stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, dissolution, liquidation or winding up, or conversion or redemption,
as the case may be. Such written notice shall be given at least 20 days prior to the action in question and not less than 20 days
prior to the record date or the date on which the Company’s transfer books are closed in respect thereto.
(f) If
any event occurs as to which in the opinion of the Board of Directors of the Company the other provisions of this Section 5 are
not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the holder of this Warrant or
of the Common Stock in accordance with the essential intent and principles of such provisions, then the Board of Directors shall
make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect
such purchase rights as aforesaid.
6. This
Warrant shall not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company.
7. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the principal office of the Company, for new Warrants
of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares which may be subscribed
for and purchased hereunder, each of such new Warrants to represent the right to subscribe for and purchase such number of shares
as shall be designated by said holder hereof at the time of such surrender. Subject to compliance with applicable securities laws
and the other terms of this Warrant, this Warrant may be assigned or transferred by the holder and this Warrant shall be binding
on and inure to the benefit of the parties hereto and their respective transferees, successors and assigns. Notwithstanding the
foregoing, pursuant to Rule 5110(g) of the Financial Industry Regulatory Authority, Inc. (“
FINRA
”), this Warrant
shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging,
short sale, derivative, put, or call transaction that would result in the effective economic disposition of this Warrant or the
Shares acquirable upon exercise hereof, by any person for a period of 180 days immediately following the effective date of the
Offering, except as provided in paragraph (g)(2) of Rule 5110(g) of the FINRA.
8. Each
certificate for the securities purchased under this Warrant shall bear a legend as follows unless such securities have been registered
under the Securities Act of 1933, as amended (the “
Act
”):
“The
securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”),
or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the Act
and applicable state law which, in the opinion of counsel to the Company, is available.”
The securities evidenced by this Warrant
shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities
may be transferred pursuant to an exemption from registration under the Act and applicable state securities laws, the availability
of which is established to the reasonable satisfaction of the counsel of the Company, or (ii) a registration statement relating
to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange
Commission and compliance with applicable state securities law has been established.
9. The
Company will not be required upon the exercise of this Warrant to issue fractions of Shares, but may, at its option, either (a)
purchase such fraction for an amount in cash equal to the current value of such fraction computed on the basis of the closing market
price of the Common Stock as quoted on the principal exchange or trading facility on which the Common Stock is traded on the Trading
Day immediately preceding the day upon which this Warrant was surrendered for exercise in accordance with Section 2 hereof, or
(b) issue the required Share. By accepting this Warrant, the holder hereof expressly waives any right to receive any fractional
share upon exercise of a Warrant, except as expressly provided in this Section 9.
10. If
this Warrant is exercised for less than all of the then-current number of Shares purchasable hereunder, then the Company shall,
concurrently with the issue of the Shares purchased by the holder hereof upon such exercise in accordance with Section 2, issue
a new warrant exercisable for the remaining number of Shares purchasable under this Warrant.
11. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and security reasonably satisfactory to it, the Company shall execute and deliver a new warrant of like tenor as the Warrant so
lost, stolen, destroyed or mutilated.
12. This
Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect
to conflict of laws principles thereof. The Company and the holder agree that the prevailing party(ies) in any action or proceeding
arising out of or relating to this Warrant shall be entitled to recover from the other party(ies) all of its reasonable attorneys’
fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor.
13. All
modifications or amendments of this Warrant shall require the written consent of and be signed by the party against whom enforcement
of the modification or amendment is sought.
14. This
Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Warrant) constitutes
the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings
of the parties, oral and written, with respect to the subject matter hereof.
15. This
Warrant shall inure solely to the benefit of and shall be binding upon, the holder and the Company and their permitted assignees,
respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Warrant or any provisions herein contained.
[Signature Page Follows]
IN WITNESS WHEREOF,
Celcuity Inc. has caused this Warrant to be signed by its duly authorized officer and this Warrant to be dated as of the date set
forth above.
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Name: Brian F. Sullivan
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Title: Chief Executive Officer
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Acknowledged and agreed:
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CRAIG-HALLUM CAPITAL GROUP LLC
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By:
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Name:
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Title:
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[Signature Page to Representative’s
Warrant]
SUBSCRIPTION FORM
To be Executed by the Holder of this
Warrant if such Holder
Desires to Exercise this Warrant in Whole or in Part
To: Celcuity Inc. (the “
Company
”)
The undersigned
___________________________________
Please insert Social Security or other
identifying number of Subscriber:
_______________________________
hereby irrevocably elects to exercise the
right of purchase represented by this Warrant for, and to purchase thereunder, ___________ shares of Common Stock (the “
Shares
”)
provided for therein.
Payment of the Warrant Purchase Price for
the Shares shall take the form of [Check the applicable box below]:
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¨
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Immediately available U.S. funds; or
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¨
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the cancellation of such number of Shares as is necessary to satisfy the Warrant Purchase Price
with respect to the exercise of the number of Shares set forth above in accordance with the formula set forth in Section 2(b) of
the Warrant.
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The undersigned requests that such Shares
be registered in the name of the undersigned or in such other name specified below:
The Shares shall be delivered as follows:
and, if such number of Shares does not
constitute all shares purchasable under the Warrant, that a new Warrant for the balance remaining of such shares be registered
in the name of, and delivered to, the undersigned at the address stated above.
Unless the undersigned has selected the
“cashless exercise” option provided for in Section 2(b) of the Warrant, the undersigned hereby represents and warrants
that the undersigned is acquiring the Shares for its own account for investment purposes only, and not for resale or with a view
to distribution of such shares or any part thereof.
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Dated:
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Name of Holder:
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Signature
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Title
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Exhibit 5.1
FREDRIKSON & BYRON, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, Minnesota 55402
Telephone: (612) 492-7000
Facsimile: (612) 492-7077
September 12,
2017
Celcuity LLC
16305 36th Avenue North
Suite 450
Minneapolis, MN 55446
Re:
Registration Statement on Form
S-1 – Exhibit 5.1
Ladies and Gentlemen:
This opinion is being furnished to Celcuity
LLC, a Minnesota limited liability company, which we have been informed will, prior to the consummation of the offering described
below, be converted (the “
Conversion
”) into Celcuity Inc., a Delaware corporation (the “
Company
”),
in connection with the filing of the Registration Statement (as amended, the “
Registration Statement
”) on Form
S-1 (File No. 333-220128) with the Securities and Exchange Commission (the “
Commission
”) under the Securities
Act of 1933, as amended (the “
Act
”). We have been advised that the Registration Statement relates to the proposed
offering of up to 2,300,000 shares of the Company’s common stock, par value $0.001 per share (“
Common Stock
”),
to be issued and sold by the Company pursuant to the terms of the Underwriting Agreement (the “
Shares
”). The
Shares are to be sold by the Company in accordance with an Underwriting Agreement to be entered into by and between the
Company and Craig-Hallum Capital Group LLC, as the representative of the underwriters named on Schedule I thereto (the “
Underwriting
Agreement
”), the form of which has been filed as Exhibit 1.1 to the Registration Statement.
In connection herewith, we have examined
originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the form of
Underwriting Agreement, (iii) the form of Plan of Conversion of the Company, including a form of Certificate of Conversion attached
thereto pursuant to which the Conversion will be effected, (iv) forms of the Company’s Certificate of Incorporation
and Bylaws, each to be in effect upon the Conversion, and (v) certain resolutions of the Board of Governors of the Company
pertaining to the issuance by the Company of the Shares.
We have examined and relied upon the information
set forth in the Registration Statement and such other records, agreements, certificates, statements of public officials and officers
of the Company, and documents as in each case have been provided to us and we have considered material to the opinions hereinafter
set forth. We have not verified the accuracy or completeness of the contents of such information, records, agreements, certificates,
statements or documents, and we have not made any independent investigation of any factual matter. In our examination, we have
assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with
the original of all documents submitted to us as copies thereof. We have examined such matters of law as in our experience we have
deemed appropriate in connection with the opinions hereinafter set forth.
In connection herewith, we have assumed
that, other than with respect to the Company, at such times as the Shares are issued and sold, all of the documents referred to
in this opinion letter will have been duly authorized by, duly executed and delivered and countersigned by, and will constitute
the valid, binding and enforceable obligations of, all of the parties to such documents, all of the signatories to such documents
will have been duly authorized and all such parties will be duly organized and validly existing and will have the power and authority
(corporate or other) to execute, deliver and perform such documents.
Based upon the foregoing and in reliance
thereon, and subject to the assumptions, comments, qualifications, limitations and exceptions set forth herein, and assuming the
Certificate of Conversion and the Certificate of Incorporation have been duly filed with the Secretary of State of the State of
Delaware and the Conversion has been effected, we are of the opinion that assuming the due execution and delivery of the Underwriting
Agreement by the Company and the underwriters named therein, and the receipt by the Company of all consideration in the manner
contemplated by the Underwriting Agreement and the Registration Statement, the Shares, when issued as contemplated by the Agreement,
will be duly authorized, validly issued, fully paid and nonassessable.
Our opinions herein reflect only the application
of the General Corporation Law of the State of Delaware. The opinions set forth herein are made as of the date hereof and are subject
to, and may be limited by, future changes in factual matters, and we undertake no duty to advise you of the same. The opinions
expressed herein are based upon the law in effect (and published or otherwise generally available) on the date hereof, and we assume
no obligation to revise or supplement these opinions should such law be changed by legislative action, judicial decision or otherwise.
We do not render any opinions except as
set forth above. We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the
use of our name under the caption “Legal Matters” in the prospectus filed as a part thereof. In giving such consent,
we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
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Very truly yours,
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FREDRIKSON & BYRON, P.A.
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/s/ Eric Madson
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By: Eric Madson
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Its: Vice President
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Exhibit 10.1
CELCUITY INC.
2017 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions
of the Employee Stock Purchase Plan of Celcuity Inc.
1.
Purpose
.
The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company. It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan”
under Section 423 of the Code. The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of the Code.
2.
Definitions
.
(a) “
Board
”
means the Board of Directors of the Company.
(b) “
Code
”
means the Internal Revenue Code of 1986, as amended.
(c) “
Common
Stock
” means the Common Stock of the Company.
(d) “
Company
”
means Celcuity Inc., a Delaware corporation.
(e) “
Compensation
”
means regular cash compensation received by an Employee from the Company or a Designated Subsidiary. By way of illustration, but
not limitation, Compensation includes regular compensation such as salary, wages, overtime, shift differentials and commissions,
but excludes bonuses, incentive compensation, relocation, expense reimbursements, tuition or other reimbursements and income realized
as a result of participation in any stock option, stock purchase, or similar plan of the Company or any Designated Subsidiary.
(f) “
Continuous
Status as an Employee
” means the absence of any interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Administrator, provided that such leave is for a period of not more than 90 days, unless reemployment upon
the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted
from time to time; or (iv) in the case of transfers between locations of the Company or between the Company and its Designated
Subsidiaries.
(g) “
Contributions
”
means all amounts credited to the account of a participant pursuant to the Plan.
(h) “
Corporate
Transaction
” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other
capital reorganization of the Company with or into another corporation, or any other transaction or series of related transactions
in which the Company’s stockholders immediately prior thereto own less than 50% of the voting stock of the Company (or its
successor or parent) immediately thereafter.
(i) “
Designated
Subsidiaries
” means the Subsidiaries that have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan; provided however that the Board shall only have the discretion to designate Subsidiaries
if the issuance of options to such Subsidiary’s Employees pursuant to the Plan would not cause the Company to incur adverse
accounting charges.
(j) “
Employee
”
means any person, including an Officer, who is an Employee for tax purposes and who is customarily employed for at least twenty
(20) hours per week by the Company or one of its Designated Subsidiaries.
(k) “
Exchange
Act
” means the Securities Exchange Act of 1934, as amended.
(l)
“
Offering Date
” means the first business day of each Offering Period of the Plan.
(m) “
Offering
Period
” means a period of twenty-four (24) months commencing on November 1 and May 1 of each year, except for the first
Offering Period as set forth in Section 4(a).
(n) “
Officer
”
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) “
Plan
”
means this Employee Stock Purchase Plan.
(p) “
Purchase
Date
” means the last day of each Purchase Period of the Plan.
(q) “
Purchase
Period
” means a period of six (6) months within an Offering Period, except for the Purchase Periods in the first Offering
Period as set forth in Section 4(b).
(r) “
Purchase
Price
” means with respect to a Purchase Period an amount equal to 85% of the Fair Market Value (as defined in Section
7(b) below) of a Share of Common Stock on the Offering Date or on the Purchase Date, whichever is lower.
(s) “
Share
”
means a share of Common Stock, as adjusted in accordance with Section 19 of the Plan.
(t) “
Subsidiary
”
means a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary.
3.
Eligibility
.
(a) Any
person who is an Employee as of the Offering Date of a given Offering Period shall be eligible to participate in such Offering
Period under the Plan, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code.
(b) Any
provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d)
of the Code) would own capital stock of the Company and/or hold outstanding options to purchase stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of stock of the Company or of any subsidiary of the Company,
or (ii) if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section
423 of the Code) of the Company and its Subsidiaries to accrue at a rate that exceeds Twenty-Five Thousand Dollars ($25,000) of
the Fair Market Value (as defined in Section 7(b) below) of such stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
4.
Offering
Periods and Purchase Periods
.
(a)
Offering
Periods
. The Plan shall be generally implemented by a series of Offering Periods of twenty-four (24) months’ duration,
with new Offering Periods (other than the first Offering Period) commencing on or about May 1 and November 1 of each year (or at
such other time or times as may be determined by the Board of Directors). The first Offering Period shall commence on the day before
the effective date of the Registration Statement on Form S-1 for the initial public offering of the Company’s Common Stock
(the “IPO Date”) and continue until April 30, 2019. The Plan shall continue until terminated in accordance with Section
19 hereof. The Board of Directors of the Company shall have the power to change the duration and/or the frequency of Offering Periods
with respect to future offerings without stockholder approval if such change is announced at least five (5) days prior to the scheduled
beginning of the first Offering Period to be affected.
(b)
Purchase
Periods
. Each Offering Period shall generally consist of four (4) consecutive purchase periods of six (6) months’ duration.
The last day of each Purchase Period shall be the “Purchase Date” for such Purchase Period. A Purchase Period commencing
on May 1 shall end on the next October 31. A Purchase Period commencing on November 1 shall end on the next April 30.
The first Offering Period shall have three Purchase Periods. The first Purchase Period of the first Offering Period shall commence
on the IPO Date and shall end on April 30, 2018, with the second Purchase Period beginning on May 1, 2018 and ending on October
31, 2018, and the third Purchase Period beginning on November 1, 2018 and ending on April 30, 2019. The Board of Directors of the
Company shall have the power to change the duration and/or frequency of Purchase Periods with respect to future purchases without
stockholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Purchase
Period to be affected.
5.
Participation
.
(a) An
eligible Employee may become a participant in the Plan by completing a subscription agreement on the form provided by the Company
and filing it with the Company’s Human Resources Department or the stock brokerage or other financial services firm designated
by the Company (the “Designated Broker”) prior to the applicable Offering Date, unless a later time for filing the
subscription agreement is set by the Board for all eligible Employees with respect to a given Offering Period. The subscription
agreement shall set forth the percentage of the participant’s Compensation (subject to Section 6(a) below) to be paid as
Contributions pursuant to the Plan.
(b) Payroll
deductions shall commence on the first full payroll following the Offering Date and shall end on the last payroll paid on or prior
to the last Purchase Period of the Offering Period to which the subscription agreement is applicable, unless sooner terminated
by the participant as provided in Section 10.
(c) Participants
are responsible for the payment of all income taxes, employment, social insurance, welfare and other taxes under applicable law
relating to any amounts deemed under the laws of the country of their residency or of the organization of the Subsidiary which
employs them to constitute income arising out of the Plan, the purchase and sale of Shares pursuant to the Plan and the distribution
of Shares or cash to the participant in accordance with the Plan. Each participant, by participating in the Plan, authorizes the
Company or the relevant Subsidiary to make appropriate withholding deductions from each participant’s compensation, which
shall be in addition to any payroll deductions made pursuant to Section 6 below, and to pay such amounts to the appropriate tax
authorities in the relevant country or countries in order to satisfy any of the above tax liabilities of the participant under
applicable law.
6.
Method
of Payment of Contributions
.
(a) A
participant shall elect to have payroll deductions made on each payday during the Offering Period in an amount not less than one
percent (1%) and not more than ten percent (10%) (or such other percentage as the Board may establish from time to time before
an Offering Date) of such participant’s Compensation on each payday during the Offering Period. All payroll deductions made
by a participant shall be credited to his or her account under the Plan. A participant may not make any additional payments into
such account, except as provided in Section 11.
(b) A
participant may discontinue his or her participation in the Plan as provided in Section 10, or, unless otherwise provided by the
Administrator, on one occasion only during a Purchase Period may increase and on one occasion only during a Purchase Period may
decrease the rate of his or her Contributions with respect to the ongoing Offering Period by completing and filing with the Company
a new subscription agreement authorizing a change in the payroll deduction rate. The change in rate shall be effective as of the
beginning of the next pay period following the date of filing of the new subscription agreement, if the agreement is filed at least
ten (10) business days prior to such date and, if not, as of the beginning of the next succeeding pay period.
(c) Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) herein, a participant’s
payroll deductions may be decreased during any Offering Period scheduled to end during the current calendar year to 0%. Payroll
deductions shall re-commence at the rate provided in such participant’s subscription agreement at the beginning of the first
Offering Period that is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section
10.
7.
Grant
of Option
.
(a) On
the Offering Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option
to purchase on each Purchase Date a number of Shares of the Company’s Common Stock determined by dividing such Employee’s
Contributions accumulated prior to such Purchase Date and retained in the participant’s account as of the Purchase Date by
the applicable Purchase Price; provided however that the maximum number of Shares an Employee may purchase during each Purchase
Period of each Offering Period shall be 2,000 Shares, such that the maximum number of Shares an Employee may purchase during each
Offering Period shall be 8,000 Shares (subject to any adjustment pursuant to Section 19 below), and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and 13 of this Plan and Section 423 of the Code.
(b) The
fair market value of the Shares on a given date (the “Fair Market Value”) shall be determined by such methods or procedures
as shall be established from time to time by the Board, or a committee named by the Board under Section 14 of the Plan, in its
discretion. Notwithstanding the foregoing, unless otherwise determined by the Board, the Fair Market Value of a Share on a given
date for purposes of the Plan shall be the closing sale price of such Share on the NASDAQ Capital Market as reported on the consolidated
transaction reporting system of such exchange on such date or, if such exchange is not open for trading on such date, on the most
recent preceding date that such exchange is open for trading.
8.
Exercise
of Option
. Unless a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of Shares
will be exercised automatically on each Purchase Date of an Offering Period, and the maximum number of full Shares subject to the
option will be purchased at the applicable Purchase Price with the accumulated Contributions in his or her account. No fractional
Shares shall be issued. Any payroll deductions accumulated in a participant’s account that are not sufficient to purchase
a full Share shall be retained in the participant’s account for the subsequent Purchase Period or Offering Period, subject
to earlier withdrawal by the participant as provided in Section 10 below. Any other amounts left over in a participant’s
account after a Purchase Date shall be returned to the participant. The Shares purchased upon exercise of an option hereunder shall
be deemed to be transferred to the participant on the Purchase Date. During his or her lifetime, a participant’s option to
purchase Shares hereunder is exercisable only by him or her.
9.
Delivery
.
Within thirty (30) days after each Purchase Date of each Offering Period, the number of Shares purchased by each participant upon
exercise of his or her option shall be deposited into an account established in the participant’s name with the Designated
Broker.
10.
Voluntary
Withdrawal; Termination of Employment
.
(a) A
participant may withdraw all but not less than all the Contributions credited to his or her account under the Plan at any time
prior to each Purchase Date by giving written notice to the Company or the Designated Broker, as directed by the Company. All of
the participant’s Contributions credited to his or her account will be paid to him or her promptly after receipt of his or
her notice of withdrawal and his or her option for the current period will be automatically terminated, and no further Contributions
for the purchase of Shares will be made during the Offering Period.
(b) Upon
termination of the participant’s Continuous Status as an Employee prior to the Purchase Date of an Offering Period for any
reason, including retirement or death, the Contributions credited to his or her account will be returned to him or her or, in the
case of his or her death, to the person or persons entitled thereto under Section 14, and his or her option will be automatically
terminated.
(c) In
the event an Employee fails to remain in Continuous Status as an Employee of the Company for at least twenty (20) hours per week
during the Offering Period in which the employee is a participant, he or she will be deemed to have elected to withdraw from the
Plan and the Contributions credited to his or her account will be returned to him or her and his or her option terminated.
(d) A
participant’s withdrawal from an offering will not have any effect upon his or her eligibility to participate in a succeeding
offering or in any similar plan that may hereafter be adopted by the Company.
11.
Automatic
Withdrawal
. If the Fair Market Value of the Shares on any Purchase Date of an Offering Period is less than the Fair Market
Value of the Shares on the Offering Date for such Offering Period, then every participant shall automatically (i) be withdrawn
from such Offering Period at the close of such Purchase Date and after the acquisition of Shares for such Purchase Period, and
(ii) be enrolled in the Offering Period commencing on the first business day subsequent to such Purchase Period. Participants shall
automatically be withdrawn as of October 31, 2017 from the Offering Period beginning on the IPO Date and re-enrolled (with all
Contributions carried forward) in the Offering Period beginning on November 1, 2017 if the Fair Market Value of the Shares on the
IPO Date is greater than the Fair Market Value of the Shares on October 31, 2017, unless a participant notifies the Administrator
prior to October 31, 2017 that he or she does not wish to be withdrawn and re-enrolled; and, in connection therewith, any new participant
to the Offering Period beginning on November 1, 2017 may make an additional Contribution up to the maximum amount of any Contribution
carried forward by a participant.
12.
Interest
.
No interest shall accrue on the Contributions of a participant in the Plan.
13.
Stock
.
(a) Subject
to adjustment as provided in Section 19, the maximum number of Shares which shall be made available for sale under the Plan shall
be 100,000 Shares, plus an automatic annual increase on the first day of each of the Company’s fiscal years beginning in
2019 and ending in 2027 equal to the lesser of (i) one-half percent (0.5%) of the Shares outstanding on the last day of the
immediately preceding fiscal year, or (ii) another amount determined by the Board. If the Board determines that, on a given Purchase
Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock
that were available for sale under the Plan on the Offering Date of the applicable Offering Period, or (ii) the number of shares
available for sale under the Plan on such Purchase Date, the Board may in its sole discretion provide (x) that the Company shall
make a pro rata allocation of the Shares of Common Stock available for purchase on such Offering Date or Purchase Date, as applicable,
in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Purchase Date, and continue all Offering Periods then in effect, or (y) that
the Company shall make a pro rata allocation of the shares available for purchase on such Offering Date or Purchase Date, as applicable,
in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Purchase Date, and terminate any or all Offering Periods then in effect pursuant
to Section 20 below. The Company may make pro rata allocation of the Shares available on the Offering Date of any applicable Offering
Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by
the Company’s stockholders subsequent to such Offering Date.
(b) The
participant shall have no interest or voting right in Shares covered by his or her option until such option has been exercised.
(c) Shares
to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant
and his or her spouse.
14.
Administration
.
(a) The
Board, or a committee named by the Board, shall supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe
and interpret the Plan, and to make all other determinations necessary or advisable for the administration of the Plan.
(b) The
Board, or a committee named by the Board, shall, to the extent necessary or desirable, establish any special rules for Employees,
former Employees or participants located in any particular country other than the United States. Such rules shall be set forth
in Appendices to the Plan, which shall be deemed incorporated into and form part of the Plan.
15.
Designation
of Beneficiary
.
(a) A
participant may designate a beneficiary who is to receive any Shares and cash, if any, from the participant’s account under
the Plan in the event of such participant’s death subsequent to the end of a Purchase Period but prior to delivery to him
or her of such Shares and cash. In addition, a participant may designate a beneficiary who is to receive any cash from the participant’s
account under the Plan in the event of such participant’s death prior to the Purchase Date of an Offering Period. If a participant
is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.
Beneficiary designations under this Section 15(a) shall be made as directed by the Company’s Human Resources Department.
(b) Such
designation of beneficiary may be changed by the participant (and his or her spouse, if any) at any time by written notice. In
the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant’s death, the Company shall deliver such Shares and/or cash to the executor or administrator
of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives
of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may
designate.
16.
Transferability
.
Neither Contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive
Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution, or as provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or
other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance
with Section 10.
17.
Use
of Funds
. All Contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such Contributions.
18.
Reports
.
Individual accounts will be maintained for each participant in the Plan. Statements of account will be provided to participating
Employees by the Company or the Designated Broker at least annually, which statements will set forth the amounts of Contributions,
the per Share Purchase Price, the number of Shares purchased and the remaining cash balance, if any.
19.
Adjustments
Upon Changes in Capitalization; Corporate Transactions
.
(a)
Adjustment
.
Subject to any required action by the stockholders of the Company, the number of Shares covered by each option under the plan that
has not yet been exercised and the number of Shares that have been authorized for issuance under the Plan but have not yet been
placed under option (collectively, the “Reserves”), as well as the maximum number of shares of Common Stock that may
be purchased by a participant in a Purchase Period, the number of shares of Common Stock set forth in Section 13(a)(i) above, and
the price per Share of Common Stock covered by each option under the Plan that has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock (including any such change in the number of Shares of Common Stock effected
in connection with a change in domicile of the Company), or any other increase or decrease in the number of Shares effected without
receipt of consideration by the Company; provided however that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company
of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Shares subject to an option.
(b)
Corporate
Transactions
. In the event of a dissolution or liquidation of the Company, any Purchase Period and Offering Period then in
progress will terminate immediately prior to the consummation of such action, unless otherwise provided by the Board. In the event
of a Corporate Transaction, each option outstanding under the Plan shall be assumed or an equivalent option shall be substituted
by the successor corporation or a parent or Subsidiary of such successor corporation. In the event that the successor corporation
refuses to assume or substitute for outstanding options, each Purchase Period and Offering Period then in progress shall be shortened
and a new Purchase Date shall be set (the “New Purchase Date”), as of which date any Purchase Period and Offering Period
then in progress will terminate. The New Purchase Date shall be on or before the date of consummation of the transaction and the
Board shall notify each participant in writing, at least ten (10) days prior to the New Purchase Date, that the Purchase Date for
his or her option has been changed to the New Purchase Date and that his or her option will be exercised automatically on the New
Purchase Date, unless prior to such date he or she has withdrawn from the Offering Period as provided in Section 10. For purposes
of this Section 19, an option granted under the Plan shall be deemed to be assumed, without limitation, if, at the time of issuance
of the stock or other consideration upon a Corporate Transaction, each holder of an option under the Plan would be entitled to
receive upon exercise of the option the same number and kind of shares of stock or the same amount of property, cash or securities
as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior
to the transaction, the holder of the number of Shares of Common Stock covered by the option at such time (after giving effect
to any adjustments in the number of Shares covered by the option as provided for in this Section 19); provided however that if
the consideration received in the transaction is not solely common stock of the successor corporation or its parent (as defined
in Section 424(e) of the Code), the Board may, with the consent of the successor corporation, provide for the consideration to
be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in Fair Market
Value to the per Share consideration received by holders of Common Stock in the transaction.
The Board may, if it so determines in the
exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per Share of Common Stock
covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of Shares of its outstanding Common Stock, and in the event of the Company’s being
consolidated with or merged into any other corporation.
20.
Amendment
or Termination
.
(a) The
Board may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19, no such termination of
the Plan may affect options previously granted, provided that the Plan or an Offering Period may be terminated by the Board on
a Purchase Date or by the Board’s setting a new Purchase Date with respect to an Offering Period and Purchase Period then
in progress if the Board determines that termination of the Plan and/or the Offering Period is in the best interests of the Company
and the stockholders or if continuation of the Plan and/or the Offering Period would cause the Company to incur adverse accounting
charges as a result of a change after the effective date of the Plan in the generally accepted accounting rules applicable to the
Plan. Except as provided in Section 19 and in this Section 20, no amendment to the Plan shall make any change in any option previously
granted that adversely affects the rights of any participant. In addition, to the extent necessary to comply with Rule 16b-3 under
the Exchange Act, or under Section 423 of the Code (or any successor rule or provision or any applicable law or regulation), the
Company shall obtain stockholder approval in such a manner and to such a degree as so required.
(b) Without
stockholder consent and without regard to whether any participant rights may be considered to have been adversely affected, the
Board (or its committee) shall be entitled to change the Offering Periods and Purchase Periods, limit the frequency and/or number
of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency
other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for
delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting
and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common
Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such
other limitations or procedures as the Board (or its committee) determines in its sole discretion advisable that are consistent
with the Plan.
21.
Notices
.
All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company
for the receipt thereof.
22.
Conditions
Upon Issuance of Shares
. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance
and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder,
applicable state securities laws and the requirements of any stock exchange upon which the Shares may then be listed, and shall
be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option,
the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion
of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
23.
Term
of Plan; Effective Date
. The Plan shall become effective upon the IPO Date. If the Plan is not approved by the shareholders
prior to August 31, 2018, all Contributions will be returned to each participant without interest and the Plan will be terminated.
If the Plan is approved by the shareholders prior to August 31, 2018, the Plan shall continue in effect for a term of ten (10)
years from the IPO Date unless sooner terminated under Section 20 or this Section 23.
24.
Additional
Restrictions of Rule 16b-3
. The terms and conditions of options granted hereunder to, and the purchase of Shares by, persons
subject to Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed
to contain, and such options shall contain, and the Shares issued upon exercise thereof shall be subject to, such additional conditions
and restrictions as may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
25.
Miscellaneous
.
Nothing in this Plan shall confer on any participant any express or implied right of continued employment by the Company or any
Subsidiary, whether for the duration of the Plan or otherwise. Nothing in this Plan shall confer on any person any legal or equitable
right against the Company or any of its affiliates, directly or indirectly, or give rise to any cause of action at law or in equity
against the Company or any of its affiliates. Neither the Shares purchased hereunder nor any other benefits conferred hereby, including
the right to purchase Shares at a discount, shall form any part of the wages or salary of any Employee for purposes of severance
pay or termination indemnities, irrespective of the reason for termination of employment. Under no circumstances shall any person
ceasing to be an employee of the Company or any of its affiliates be entitled to any compensation for any loss or any right or
benefit under this Plan which such employee might otherwise have enjoyed but for termination of employment, whether such compensation
is claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise.
26.
Acceptance
of Terms
. By participating in the Plan, each participant shall be deemed to have accepted all the conditions of the Plan and
the terms and conditions of any rules and regulations adopted by the Board or its committee administering the Plan and shall be
fully bound thereby.
Exhibit 10.2
CELCUITY INC.
2017 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
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Page
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1.
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Purpose of Plan
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1
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2.
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Definitions
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1
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3.
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Effective Date and Duration of the Plan
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4
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3.1
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Effective Date and Duration
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4
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3.2
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Stockholder Approval
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4
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4.
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Shares Available for Issuance
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5
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4.1
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Plan Reserve
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5
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4.2
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Accounting for Incentive Awards
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5
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4.3
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Award Limitations Under the Plan
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5
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4.4
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Adjustments to Shares and Incentive Awards
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5
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5.
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Plan Administration
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6
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5.1
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The Committee
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6
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5.2
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Authority of the Committee
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6
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6.
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Participation
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7
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7.
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Options
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7
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7.1
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Grant
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7
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7.2
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Exercise Price
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8
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7.3
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Exercisability and Duration
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8
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7.4
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Payment of Exercise Price
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8
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7.5
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Manner of Exercise
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8
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7.6
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Aggregate Limitation of Stock Subject to Incentive Stock Options
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8
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8.
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Stock Appreciation Rights
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9
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8.1
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Grant
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9
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8.2
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Exercisability and Duration
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9
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9.
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Restricted Stock and Restricted Stock Unit Awards
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9
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9.1
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Grant
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9
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9.2
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Rights as a Stockholder; Transferability
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9
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9.3
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Dividends and Distributions
|
10
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9.4
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Enforcement of Restrictions
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10
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10.
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Performance Awards
|
10
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10.1
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Grant
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10
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10.2
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Performance Goals
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10
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10.3
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Form of Payment
|
11
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11.
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Stock Bonuses
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11
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12.
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Effect of Termination of Employment or Other Service
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11
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12.1
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Termination Due to Death, Disability or Retirement
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11
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12.2
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Termination for Reasons Other than Death, Disability or Retirement
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12
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12.3
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Modification of Rights Upon Termination
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12
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Page
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12.4
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Exercise of Incentive Stock Options Following Termination
|
12
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12.5
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Date of Termination of Employment or Other Service
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13
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13.
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Payment of Withholding Taxes
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13
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13.1
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General Rules
|
13
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13.2
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Special Rules
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13
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14.
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Action upon Change in Control
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13
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15.
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Rights of Eligible Recipients and Participants; Transferability
|
14
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15.1
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Employment or Service
|
14
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15.2
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Rights as a Stockholder
|
14
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15.3
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Restrictions on Transfer
|
14
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15.4
|
Breach of Confidentiality or Non-Compete Agreements
|
14
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15.5
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Non-Exclusivity of the Plan
|
14
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16.
|
Securities Law and Other Restrictions
|
15
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17.
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Plan Amendment, Modification and Termination
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15
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18.
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Miscellaneous
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15
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18.1
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Compliance with Section 162(m)
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15
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18.2
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Successors and Assigns
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15
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18.3
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Governing Law
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15
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CELCUITY INC.
2017 STOCK INCENTIVE PLAN
The purpose of the Celcuity Inc. 2017 Stock
Incentive Plan (the “
Plan
”) is to advance the interests of Celcuity Inc. (the “
Company
”)
and its stockholders by enabling the Company and its Subsidiaries to attract and retain persons of skill and ability to perform
services for the Company and its Subsidiaries by providing an incentive to such individuals through equity participation in the
Company and by rewarding such individuals who contribute to the achievement by the Company of its economic objectives.
The following terms will have the meanings
set forth below, unless the context clearly otherwise requires:
2.1. “
Board
”
means the Board of Directors of the Company.
2.2. “
Broker
Exercise Notice
” means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs
a broker or dealer to sell a sufficient number of shares or lend a sufficient amount of money to pay all or a portion of the exercise
price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to
deliver stock certificates to be issued upon such exercise directly to such broker or dealer.
2.3. “
Cause
”
means:
(a) “Cause”
as defined in any employment or other agreement or policy applicable to the Participant; or
(b) If
no such agreement or policy exists, (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury,
in each case related to the Company or any Subsidiary, (ii) substantial failure on the part of the Participant to perform his or
her duties to the Company or any Subsidiary or gross negligence on the part of the Participant in the performance of such duties,
(iii) any unlawful or criminal activity of a serious nature, or (iv) any material breach of any employment, service, confidentiality
or non-compete agreement entered into with the Company or any Subsidiary.
2.4. “
Change
in Control
” of the Company means the occurrence of any of the following events:
(a) the
sale, lease, exchange or other transfer of all or substantially all of the assets of the Company (in one transaction or in a series
of related transactions) except where such sale, lease, exchange or other transfer is to an entity controlled by the Company;
(b) the
approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company; or
(c) any
person becomes after the effective date of the Plan the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of fifty percent (50%) or more of the combined voting power of the Company’s outstanding securities
ordinarily having the right to vote at elections of directors; or
(d) a
merger or consolidation to which the Company is a party if the persons who are the stockholders of the Company immediately prior
to effective date of such merger or consolidation have “beneficial ownership” (as defined in Rule l3d-3 under the Exchange
Act), immediately following the effective date of such merger or consolidation, of securities of the surviving corporation representing
50% or less of the combined voting power of the surviving corporation’s then outstanding securities ordinarily having the
right to vote at elections of directors.
2.5. “
Code
”
means the Internal Revenue Code of 1986, as amended.
2.6. “
Committee
”
means the group of individuals administering the Plan, as provided in Section 5 of the Plan.
2.7. “
Common
Stock
” means the common stock of the Company, $0.001 par value, or the number and kind of shares of stock or other securities
into which such common stock may be changed in accordance with Section 4.4 of the Plan.
2.8. “
Disability
”
means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to
the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable
to the Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code.
2.9. “
Effective
Date
” shall mean the day before the effective date of the Registration Statement on Form S-1 for the initial public offering
of the Company’s Common Stock.
2.10. “
Eligible
Recipient
” means any employee of the Company or any Subsidiary and any non-employee director, consultant or independent
contractor of the Company or any Subsidiary.
2.11. “
Exchange
Act
” means the Securities Exchange Act of 1934, as amended.
2.12. “
Fair
Market Value
” means, with respect to the Common Stock, as of any date: (i) the last reported sale price of a share
of Common Stock as of such date during the regular daily trading session on the NASDAQ Capital Market or on any other national
exchange (or, if no shares were traded or quoted on such date, as of the next preceding date on which there was such a trade or
quote); or (ii) if the Common Stock is publicly traded but is not so listed, the average of the closing bid and asked prices
on such date, as reported by The Wall Street Journal, in the over-the- counter market (or, if no shares were quoted on such date,
as of the next preceding date on which there was such a quote); or (iii) if the Common Stock is not so listed or reported,
such price as the Committee determines in good faith in the exercise of its reasonable discretion, taking into account all available
information material to the value of the Common Stock, and consistent with the definition of “fair market value” under
Section 409A of the Code.
2.13. “
Incentive
Award
” means an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award
or Stock Bonus granted to an Eligible Recipient pursuant to the Plan.
2.14. “
Incentive
Stock Option
” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 7 of the
Plan that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code.
2.15. “
Non-Statutory
Stock Option
” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 7 of the
Plan that does not qualify as an Incentive Stock Option.
2.16. “
Option
”
means an Incentive Stock Option or a Non-Statutory Stock Option.
2.17. “
Participant
”
means an Eligible Recipient who receives one or more Incentive Awards under the Plan.
2.18. “
Performance
Award
” means a right granted to an Eligible Recipient pursuant to Section 10 of the Plan to receive a payment from
the Company, in the form of stock, cash or a combination of both, upon the achievement of established employment, service, performance
or other goals.
2.19. “
Performance
Goal
” means one or more of the following performance goals, either individually, alternatively or in any combination,
applied on a Company, Subsidiary or business unit basis: revenue, cash flow, gross profit, earnings before interest and taxes,
earnings before interest, taxes, depreciation and amortization and net earnings, earnings per share, margins (including one or
more of gross, operating and· net income margins), returns (including one or more of return on assets, equity, investment,
capital and revenue and total stockholder return), stock price, working capital, market share, cost reductions, workforce satisfaction
and diversity goals, employee retention, customer satisfaction, completion of key projects and strategic plan development and implementation.
Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group
of entities, prior periods of performance) or other external measures of the selected performance criteria.
Pursuant to rules and conditions adopted
by the Committee on or before the earlier of the expiration of twenty-five percent (25%) of the applicable performance period or
the 90th day of the applicable performance period for which Performance Goals are established, the Committee may appropriately
adjust any evaluation of performance under such goals to exclude the effect of certain events, including any of the following events:
asset write-downs; litigation or claim judgments or settlements; changes in tax law, accounting principles or other such laws or
provisions affecting reported results; severance, contract termination and other costs related to exiting certain business activities;
and gains or losses from the disposition of businesses or assets or from the early extinguishment of debt. Performance Goals may
include individual objectives or other subjective criteria.
2.20. “
Previously
Acquired Shares
” means shares of Common Stock that are already owned by the Participant or, with respect to any Incentive
Award, that are to be issued upon the grant, exercise or vesting of such Incentive Award.
2.21. “
Restricted
Stock Award
” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 9 of the Plan that
is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of such Section 9.
2.22. “
Restricted
Stock Unit Award
” means an award granted to an Eligible Recipient pursuant to Section 9 of the Plan evidencing the
right to receive a Share (or a cash payment equal to the Fair Market Value of a Share) at some future date.
2.23. “
Retirement
”
means termination of employment or service pursuant to and in accordance with the regular (or, if approved by the Board for purposes
of the Plan, early) retirement/pension plan or practice of the Company or Subsidiary then covering the Participant,
provided
that if the Participant is not covered by any such plan or practice, the Participant will be deemed to be covered by the Company’s
plan or practice for purposes of this determination.
2.24. “
Securities
Act
” means the Securities Act of 1933, as amended.
2.25. “
Share
”
means a share of Common Stock.
2.26. “
Stock
Appreciation Right
” means a right granted to an Eligible Recipient pursuant to Section 8 of the Plan to receive
a payment from the Company at the time of exercise, in the form of stock, cash or a combination of both, equal to the difference
between the Fair Market Value of one or more shares of Common Stock and the exercise price of such shares under the terms of such
Stock Appreciation Right.
2.27. “
Stock
Bonus
” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 11 of the Plan.
2.28. “
Subsidiary
”
means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.
2.29. “
Tax
Date
” means the date any withholding tax obligation arises under the Code or other applicable tax statute for a Participant
with respect to an Incentive Award.
|
|
3.
|
Effective Date and
Duration of the Plan
.
|
3.1.
Effective
Date and Duration
. The Plan is effective as of the Effective Date. The Plan will terminate at midnight on September 6, 2027,
and may be terminated prior to such time by Board action, and no Incentive Award may be granted after such termination. Incentive
Awards outstanding upon termination of the Plan may continue to be exercised, or become free of restrictions, in accordance with
their terms.
3.2.
Stockholder
Approval
. The Plan shall be submitted to the stockholders of the Company for approval within twelve (12) months before or after
the Effective Date. Incentive Awards may be granted prior to the date this Plan is approved by the stockholders of the Company;
provided, however,
that any incentive stock options granted after adoption of the Plan by the Board shall be treated as
nonqualified stock options if stockholder approval is not obtained within such twelve-month period.
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|
4.
|
Shares Available for
Issuance
.
|
4.1.
Plan
Reserve
. Subject to adjustment as provided in Section 4.4 of the Plan, an aggregate of seven hundred fifty thousand (750,000)
Shares are reserved for issuance under the Plan. On January 1 of each year commencing in 2019 and ending on (and including) January
1, 2027, an additional number of Shares shall become available for issuance under the Plan equal to the lesser of: (i) one
percent (1%) of the number of Shares issued and outstanding as of the immediately preceding December 31, and (ii) another
amount determined by the Board. All Shares reserved for issuance under the Plan may be issued as Incentive Stock Options.
4.2.
Accounting
for Incentive Awards
. Shares of Common Stock that are issued under the Plan or that are subject to outstanding Incentive Awards
will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan. Any shares
of Common Stock that are subject to an Incentive Award that lapse, expire, are forfeited or for any reason are terminated unexercised
or unvested and any shares of Common Stock that are subject to an Incentive Award that is settled or paid in cash or any form other
than shares of Common Stock will automatically again become available for issuance under the Plan. Any shares of Common Stock that
constitute the forfeited portion of a Restricted Stock Award, however, will not become available for re-issuance under the Plan
after they have been so forfeited.
4.3.
Award
Limitations Under the Plan
. Notwithstanding any provision in the Plan to the contrary, no Eligible Recipient may be granted
an Incentive Award or Awards under the Plan, the value of which Award or Awards is based solely on an increase in the value of
the Shares after the date of grant of such Award or Awards, for more than 250,000 Shares (subject to adjustment as provided in
Section 4.4 of the Plan) in the aggregate in any calendar year;
provided, however,
that such limitation shall be 500,000
shares (subject to adjustment as provided in Section 4.4 of the Plan) in the case of Awards granted to an Eligible Recipient
in the calendar year in which such Eligible Recipient commences employment with the Company or a Subsidiary.
4.4.
Adjustments
to Shares and Incentive Awards
. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification,
stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off)
or any other similar change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustment (which
determination will be conclusive) as to the number and kind of securities or other property (including cash) available for issuance
or payment under the Plan and, in order to prevent dilution or enlargement of the rights of Participants, (a) the number and kind
of securities or other property (including cash) subject to outstanding Options, and (b) the exercise price of outstanding Options.
5.1.
The
Committee
. The Plan will be administered by the Board or by a committee of the Board. So long as the Company has a class of
its equity securities registered under Section 12 of the Exchange Act, any committee administering the Plan will consist solely
of two or more members of the Board who are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange
Act and, if the Board so determines in its sole discretion, who are “outside directors” within the meaning of Section
162(m) of the Code. Such a committee, if established, will act by majority approval of the members (but may also take action with
the written consent of a majority of the members of such committee), and a majority of the members of such a committee will constitute
a quorum. As used in the Plan “Committee” will refer to the Board or to such a committee, if established. To the extent
consistent with corporate law, the Committee may delegate to any officers of the Company the duties, power and authority of the
Committee under the Plan pursuant to such conditions or limitations as the Committee may establish;
provided
,
however
,
that only the Committee may exercise such duties, power and authority with respect to Eligible Recipients who are subject to Section
16 of the Exchange Act. The Committee may exercise its duties, power and authority under the Plan in its sole and absolute discretion
without the consent of any Participant or other party, unless the Plan specifically provides otherwise. Each determination, interpretation
or other action made or taken by the Committee pursuant to the provisions of the Plan will be final, conclusive and binding for
all purposes and on all persons, including, without limitation, the Company, the stockholders of the Company, the participants
and their respective successors-in-interest. No member of the Committee will be liable for any action or determination made in
good faith with respect to the Plan or any Incentive Award granted under the Plan.
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5.2.
|
Authority of the Committee
.
|
(a) In
accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of
Incentive Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including, without
limitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent of the Incentive
Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Incentive Award, any
exercise price, the manner in which Incentive Awards will vest or become exercisable and whether Incentive Awards will be granted
in tandem with other Incentive Awards) and the form of written agreement, if any, evidencing such Incentive Award; (iii) the time
or times when Incentive Awards will be granted; (iv) the duration of each Incentive Award; and (v) the restrictions and other conditions
to which the payment or vesting of Incentive Awards may be subject. In addition, the Committee will have the authority under the
Plan in its sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock or any combination
of both.
(b) The
Committee will have the authority under the Plan to amend or modify the terms of any outstanding Incentive Award in any manner,
including, without limitation, the authority to modify the number of shares or other terms and conditions of an Incentive Award,
extend the term of an Incentive Award, accelerate the exercisability or vesting or otherwise terminate any restrictions relating
to an Incentive Award, accept the surrender of any outstanding Incentive Award or, to the extent not previously exercised or vested,
authorize the grant of new Incentive Awards in substitution for surrendered Incentive Awards;
provided
,
however
,
that the amended or modified terms are permitted by the Plan as then in effect,
that such amendment
or modification does not cause the Incentive Award to become subject to Section 409A of the Code,
and that any Participant
adversely affected by such amended or modified terms has consented to such amendment or modification. No amendment or modification
to an Incentive Award, however, whether pursuant to this Section 5.2 or any other provisions of the Plan, will be deemed to
be a re-grant of such Incentive Award for purposes of the Plan.
(c) In
the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other similar
change in corporate structure or shares, (ii) any purchase, acquisition, sale or disposition of a significant amount of assets
or a significant business, (iii) any change in accounting principles or practices, or (iv) any other similar change, in each case
with respect to the Company or any other entity whose performance is relevant to the grant or vesting of an Incentive Award, the
Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving
corporation) may, without the consent of any affected Participant, amend or modify the vesting criteria of any outstanding Incentive
Award that is based in whole or in part on the financial performance of the Company (or any Subsidiary or division thereof) or
such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial
performance of the Company or such other entity will be substantially the same (in the sole discretion of the Committee or the
board of directors of the surviving corporation) following such event as prior to such event;
provided
,
however
,
that the amended or modified terms are permitted by the Plan as then in effect.
Participants in the Plan will be those Eligible
Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement
of economic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from time to time one or more Incentive
Awards, singly or in combination or in tandem with other Incentive Awards, as may be determined by the Committee in its sole discretion.
Incentive Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will
be the date of any related agreement with the Participant.
7.1.
Grant
.
An Eligible Recipient may be granted one or more Options under the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may
designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock Option. To the extent that any
Incentive Stock Option granted under the Plan ceases for any reason to qualify as an “incentive stock option” for purposes
of Section 422 of the Code, such Incentive Stock Option will continue to be outstanding for purposes of the Plan but will thereafter
be deemed to be a Non-Statutory Stock Option.
7.2.
Exercise
Price
. The per share price to be paid by a Participant upon exercise of an Option will be determined by the Committee in its
discretion at the time of the Option grant;
provided
,
however
, that such price will not be less than one hundred
percent (100%) of the Fair Market Value of one share of Common Stock on the date of grant (or, with respect to an Incentive Stock
Option, one hundred ten percent (110%) of the Fair Market Value if, at the time the Incentive Stock Option is granted, the Participant
owns, directly or indirectly, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company
or any parent or subsidiary corporation of the Company).
7.3.
Exercisability
and Duration
. An Option will become exercisable at such times and in such installments as may be determined by the Committee
in its sole discretion at the time of grant;
provided
,
however
, that no Incentive Stock Option may be exercisable
after ten (10) years from its date of grant (five (5) years from its date of grant if, at the time the Incentive Stock Option is
granted, the Participant owns, directly or indirectly, more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation of the Company).
7.4.
Payment
of Exercise Price
. The total purchase price of the shares to be purchased upon exercise of an Option will be paid entirely
in cash (including check, bank draft or money order);
provided
,
however
, that the Committee, in its sole discretion
and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by tender
of a Broker Exercise Notice, Previously Acquired Shares, a promissory note (on terms acceptable to the Committee in its sole discretion)
or a combination of such methods, or by any other form of payment the Committee may authorize.
7.5.
Manner
of Exercise
. An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained
in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through
the mail of written notice of exercise to the Company (Attention: Chief Financial Officer) at its principal executive office, and
by paying in full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 7.4 of
the Plan.
7.6.
Aggregate
Limitation of Stock Subject to Incentive Stock Options
. To the extent that the aggregate Fair Market Value (determined as of
the date an Incentive Stock Option is granted) of the shares of Common Stock with respect to which incentive stock options (within
the meaning of Section 422 of the Code) are exercisable for the first time by a Participant during any calendar year (under the
Plan and any other incentive stock option plans of the Company or any subsidiary or parent corporation of the Company (within the
meaning of the Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code from time to time), such excess Options
will be treated as Non-Statutory Stock Options. The determination will be made by taking incentive stock options into account in
the order in which they were granted. If such excess only applies to a portion of an Incentive Stock Option, the Committee, in
its discretion, will designate which shares will be treated as shares to be acquired upon exercise of an Incentive Stock Option.
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8.
|
Stock Appreciation
Rights
.
|
8.1.
Grant
.
An Eligible Recipient may be granted one or more Stock Appreciation Rights under the Plan, and such Stock Appreciation Rights will
be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee
in its sole discretion. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive
upon exercise thereof the excess of (i) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall
so determine, at any time during a specified period before or after the date of exercise) over (ii) the grant price of the Stock
Appreciation Right as determined by the Committee, which grant price shall not be less than one hundred percent (100%) of the Fair
Market Value of one Share on the date of grant of the Stock Appreciation Right. The Committee will have the sole discretion to
determine the form in which payment of the economic value of Stock Appreciation Rights will be made to a Participant (i.e., cash,
Common Stock or any combination thereof) or to consent to or disapprove the election by a Participant of the form of such payment.
8.2.
Exercisability
and Duration
. A Stock Appreciation Right will become exercisable at such time and in such installments as may be determined
by the Committee in its sole discretion at the time of grant;
provided
,
however
, that no Stock Appreciation Right
may be exercisable after ten (10) years from its date of grant. A Stock Appreciation Right will be exercised by giving notice in
the same manner as for Options, as set forth in Section 7.5 of the Plan.
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9.
|
Restricted Stock and
Restricted Stock Units
.
|
9.1.
Grant
.
An Eligible Recipient may be granted one or more Restricted Stock Awards or Restricted Stock Unit Awards under the Plan, and such
Restricted Stock Awards or Restricted Stock Unit Awards will be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may impose such restrictions
or conditions, such as forfeiture or a repurchase option, not inconsistent with the provisions of the Plan, to the vesting of or
the lapse of restrictions or conditions for any such Restricted Stock or Restricted Stock Units as it deems appropriate, including,
without limitation, that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain
period or that the Participant or the Company (or any Subsidiary or division thereof) satisfy certain performance goals or criteria.
9.2.
Rights
as a Stockholder; Transferability
. Except as provided in Sections 9.1, 9.3 and 15.3 of the Plan, a Participant will have
all voting, dividend, liquidation and other rights with respect to shares of Common Stock issued to the Participant as a Restricted
Stock Award under this Section 9 upon the Participant becoming the holder of record of such shares as if such Participant
were a holder of record of shares of unrestricted Common Stock. In the case of Restricted Stock Unit Awards, no Shares shall be
issued at the time such Awards are granted. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted
Stock Units evidencing the right to receive Shares, such Shares shall be issued and delivered to the holder of the Restricted Stock
Units.
9.3.
Dividends
and Distributions
. Unless the Committee determines otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant of the Restricted Stock Award), any dividends or distributions
(including regular quarterly cash dividends, if any) paid with respect to shares of Common Stock subject to the unvested portion
of a Restricted Stock Award will be subject to the same restrictions as the shares to which such dividends or distributions relate.
In the event the Committee determines not to pay dividends or distributions currently, the Committee will determine in its sole
discretion whether any interest will be paid on such dividends or distributions. In addition, the Committee in its sole discretion
may require such dividends and distributions to be reinvested (and in such case the Participant consents to such reinvestment)
in shares of Common Stock that will be subject to the same restrictions as the shares to which such dividends or distributions
relate.
9.4.
Enforcement
of Restrictions
. To enforce the restrictions referred to in this Section 9, the Committee may place a legend on the stock
certificates referring to such restrictions and may require the Participant, until the restrictions have lapsed, to keep the stock
certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent or to maintain evidence
of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company’s
transfer agent.
10.1.
Grant
.
An Eligible Recipient may be granted one or more Performance Awards under the Plan, and such Performance Awards will be subject
to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole
discretion. Performance Awards are intended to be “qualified performance-based compensation” within the meaning of
Section 162(m).
10.2.
Performance
Goals
. Performance Awards shall, to the extent required by Section 162(m), be conditioned solely on the achievement of one
or more objective Performance Goals, and such Performance Goals shall be established by the Committee within the time period prescribed
by, and shall otherwise comply with the requirements of, Section l62(m). The Committee may impose such restrictions or conditions,
not inconsistent with the provisions of the Plan, to the vesting of such Performance Awards as it deems appropriate, including,
without limitation, that the Participant remain in the continuous employ or service of the Company or any Subsidiary for a certain
period or that the Participant or the Company (or any Subsidiary or division thereof) satisfy certain Performance Goals. Subject
to the terms of the Plan and any applicable Performance Award agreement, the Committee will have the sole discretion to determine
the Performance Goals to be achieved during any performance period, the length of any performance period, the amount of any Performance
Award granted, the amount of any payment or transfer to be made pursuant to any Performance Award, and any other terms and conditions
of any Performance Award. The Committee shall also certify in writing that such Performance Goals have been met prior to payment
of the Performance Awards to the extent required by Section 162(m).
10.3.
Form
of Payment
. A Performance Award granted under the Plan may be payable in cash or in Shares (including, without limitation,
Restricted Stock). The Committee will have the sole discretion to determine the form in which payment of the economic value of
Performance Awards will be made to a Participant (i.e., cash, Common Stock or any combination thereof) or to consent to or disapprove
the election by a Participant of the form of such payment.
An Eligible Recipient may be granted one
or more Stock Bonuses under the Plan, and such Stock Bonuses will be subject to such terms and conditions, consistent with the
other provisions of the Plan, as may be determined by the Committee. The Participant will have all voting, dividend, liquidation
and other rights with respect to the shares of Common Stock issued to a Participant as a Stock Bonus under this Section 11
upon the Participant becoming the holder of record of such shares;
provided
,
however
, that the Committee may impose
such restrictions on the assignment or transfer of a Stock Bonus as it deems appropriate.
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12.
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Effect of Termination
of Employment or Other Service
.
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12.1.
Termination
Due to Death, Disability or Retirement
. Unless otherwise provided by the Committee in its sole discretion in the agreement
evidencing an Incentive Award:
(a) In
the event a Participant’s employment or other service with the Company and all Subsidiaries is terminated by reason of death
or Disability:
(i) all
outstanding Options and Stock Appreciation Rights then held by the Participant will become immediately exercisable in full and
remain exercisable for a period of twelve (12) months after such termination (but in no event after the expiration date of any
such Option or Stock Appreciation Right);
(ii) all
Restricted Stock Awards and Restricted Stock Unit Awards then held by the Participant will become fully vested; and
(iii) all
Performance Awards and Stock Bonuses then held by the Participant will vest and/or continue to vest in the manner determined by
the Committee and set forth in the agreement evidencing such Performance Awards or Stock Bonuses.
(b) In
the event a Participant’s employment or other service with the Company and all Subsidiaries is terminated by reason of Retirement:
(i) all
outstanding Options and Stock Appreciation Rights then held by the Participant will remain exercisable, to the extent exercisable
as of the date of such termination, for a period of six (6) months after such termination (but in no event after the expiration
date of any such Option or Stock Appreciation Right);
(ii) all
Restricted Stock Awards and Restricted Stock Unit Awards then held by the Participant that have not vested as of such termination
will be terminated and forfeited; and
(iii) all
Performance Awards and Stock Bonuses then held by the Participant will vest and/or continue to vest in the manner determined by
the Committee and set forth in the agreement evidencing such Performance Awards or Stock Bonuses.
12.2.
Termination
for Reasons Other than Death, Disability or Retirement
. Unless otherwise provided by the Committee in its sole discretion
in the agreement evidencing an Incentive Award, in the event a Participant’s employment or other service with the Company
and all Subsidiaries is terminated for any reason other than death, Disability or Retirement, or a Participant is in the employ
or service of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the Participant continues in the
employ or service of the Company or another Subsidiary), all rights of the Participant under the Plan and any agreements evidencing
an Incentive Award will immediately terminate without notice of any kind, and no Options or Stock Appreciation Rights then held
by the Participant will thereafter be exercisable, all Restricted Stock Awards and Restricted Stock Unit Awards then held by the
Participant that have not vested will be terminated and forfeited, and all Performance Awards and Stock Bonuses then held by the
Participant will vest and/or continue to vest in the manner determined by the Committee and set forth in the agreement evidencing
such Performance Awards or Stock Bonuses;
provided
,
however
, that if such termination is due to any reason other
than voluntary termination by the Participant or termination by the Company or any Subsidiary for “Cause,” all outstanding
Options and Stock Appreciation Rights then held by such Participant will remain exercisable, to the extent exercisable as of such
termination, for a period of three (3) months after such termination (but in no event after the expiration date of any such Option
or Stock Appreciation Right).
12.3.
Modification
of Rights Upon Termination
. Notwithstanding the other provisions of this Section 12, upon a Participant’s termination
of employment or other service with the Company and all Subsidiaries, the Committee may, in its sole discretion (which may be exercised
at any time on or after the date of grant, including following such termination), cause Options and Stock Appreciation Rights (or
any part thereof) then held by such Participant to become or continue to become exercisable and/or remain exercisable following
such termination of employment or service and Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards and Stock
Bonuses then held by such Participant to vest and/or continue to vest or become free of transfer restrictions, as the case may
be, following such termination of employment or service, in each case in the manner determined by the Committee;
provided
,
however
, that no Incentive Award may remain exercisable or continue to vest beyond its expiration date. Notwithstanding
the foregoing, no extension to exercise will be permitted if such extension would cause the Award to become subject to Section
409A of the Code.
12.4.
Exercise
of Incentive Stock Options Following Termination
. Any Incentive Stock Option that remains exercisable pursuant to an agreement
with the Company following termination of employment and is unexercised more than one (1) year following termination of employment
by reason of death or Disability or more than three (3) months following termination for any reason other than death or Disability
will thereafter be deemed to be a Non-Statutory Stock Option.
12.5.
Date
of Termination of Employment or Other Service
. Unless the Committee otherwise determines in its sole discretion, a Participant’s
employment or other service will, for purposes of the Plan, be deemed to have terminated on the date recorded on the personnel
or other records of the Company or the Subsidiary for which the Participant provides employment or other service, as determined
by the Committee in its sole discretion based upon such records.
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13.
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Payment of Withholding
Taxes
.
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13.1.
General
Rules
. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that
may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all
legally required amounts necessary to satisfy any and all foreign, federal, state and local withholding and employment-related
tax requirements attributable to an Incentive Award, including, without limitation, the grant, exercise or vesting of, or payment
of dividends with respect to, an Incentive Award or a disqualifying disposition of stock received upon exercise of an Incentive
Stock Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any
action, including issuing any shares of Common Stock, with respect to an Incentive Award.
13.2.
Special
Rules
. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require
a Participant to satisfy, in whole or in part, any withholding or employment-related tax obligation described in Section 13.1
of the Plan by electing to tender Previously Acquired Shares, a Broker Exercise Notice or a promissory note (on terms acceptable
to the Committee in its sole discretion), or by a combination of such methods.
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14.
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Action upon Change
in Control
.
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If a Change in Control of the Company occurs
or is about to occur, the Committee, in its sole discretion, may provide for one or more of the following:
(a) the
partial or full acceleration of the exercisability of outstanding Incentive Awards held by some or all Participants,
provided
that the Committee, in its sole discretion, may condition such acceleration (or the Participant’s receipt of any securities
or payments with respect to such acceleration) upon the Participant’s continued service to the Company or to the successor
person in the Change in Control;
(b) the
complete termination of the Plan and cancellation of outstanding Incentive Awards not exercised prior to a date specified by the
Committee;
(c) the
continuance of the Plan with respect to outstanding Incentive Awards;
(d) replacement
or exchange of the Incentive Awards for options to purchase similar securities of the successor person in the Change in Control;
(e) the
substitution for outstanding Incentive Awards of shares of common stock of the person acquiring control of the Company or a related
corporation; or
(f) the
receipt by some or all Participants holding outstanding Incentive Awards with respect to some or all of the shares of Common Stock
subject to such Incentive Awards, as of the effective date of any such Change in Control of the Company, of cash in an amount equal
to the excess of the per share price paid in connection with the Change in Control of the Company over the exercise price per share
of such Incentive Awards, multiplied by the number of shares subject to such Incentive Awards.
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15.
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Rights of Eligible
Recipients and Participants; Transferability
.
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15.1.
Employment
or Service
. Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate
the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant
any right to continue in the employ or service of the Company or any Subsidiary.
15.2.
Rights
as a Stockholder
. As a holder of Incentive Awards (other than Restricted Stock Awards and Stock Bonuses), a Participant will
have no rights as a stockholder unless and until such Incentive Awards are exercised for, or paid in the form of, shares of Common
Stock and the Participant becomes the holder of record of such shares. Except as otherwise provided in the Plan, no adjustment
will be made for dividends or distributions with respect to such Incentive Awards as to which there is a record date preceding
the date the Participant becomes the holder of record of such shares, except as the Committee may determine in its discretion.
15.3.
Restrictions
on Transfer
. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted
by the Plan, unless approved by the Committee in its sole discretion, no right or interest of any Participant in an Incentive Award
prior to the exercise or vesting of such Incentive Award will be assignable or transferable, or subjected to any lien, during the
lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. A Participant
will, however, be entitled to designate a beneficiary to receive an Incentive Award upon such Participant’s death, and in
the event of a Participant’s death, payment of any amounts due under the Plan will be made to, and exercise of any Options
(to the extent permitted pursuant to Section 12 of the Plan) may be made by, the Participant’s legal representatives,
heirs and legatees.
15.4.
Breach
of Confidentiality, Assignment of Inventions or Non-Compete Agreements
. Notwithstanding anything in the Plan to the contrary,
in the event that a Participant materially breaches the terms of any confidentiality, assignment of inventions or non-compete agreement
entered into with the Company or any Subsidiary, whether such breach occurs before or after termination of such Participant’s
employment or other service with the Company or any Subsidiary, the Committee in its sole discretion may immediately terminate
all rights of the Participant under the Plan and any agreements evidencing an Incentive Award then held by the Participant without
notice of any kind.
15.5.
Non-Exclusivity
of the Plan
. Nothing contained in the Plan is intended to modify or rescind any previously or subsequently approved compensation
plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other
compensation arrangements as the Board may deem necessary or desirable.
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16.
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Securities Law and
Other Restrictions
.
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Notwithstanding any other provision of the
Plan or any agreements entered into pursuant to the Plan, the Company will not be required to issue any shares of Common Stock
under the Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant
to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement
under the Securities Act and any applicable state or foreign securities laws or an exemption from such registration under the Securities
Act and applicable state or foreign securities laws, and (b) there has been obtained any other consent, approval or permit from
any other regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company may condition
such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement
of any legends on certificates representing shares of Common Stock, as may be deemed necessary or advisable by the Company in order
to comply with such securities law or other restrictions.
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17.
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Plan Amendment, Modification
and Termination
.
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The Board may suspend or terminate the Plan
or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in
order that Incentive Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect
the Board may deem to be in the best interests of the Company;
provided
,
however
, that no amendments to the Plan
will be effective without approval of the stockholders of the Company if stockholder approval of the amendment is then required
pursuant to Section 422 of the Code or the rules of any stock exchange or Nasdaq or similar regulatory body. No termination, suspension
or amendment of the Plan may adversely affect any outstanding Incentive Award without the consent of the affected Participant;
provided
,
however
, that this sentence will not impair the right of the Committee to take whatever action it deems
appropriate under Sections 5.2, 4.4 and 14 of the Plan.
18.1.
Compliance
with Section 162(m)
. It is intended that the Plan shall comply with and meet all the requirements of Section 162(m) of the
Code so that Awards hereunder which are made to Participants who are “covered employees” (as defined in Section 162(m)
of the Code) shall constitute “performance-based” compensation within the meaning of Section 162(m) of the Code. If
any provision of the Plan would disqualify the Plan or would not otherwise permit the Plan to comply with Section 162(m) as so
intended, such provision shall be construed or deemed amended to confirm to the requirements or provisions of Section 162(m).
18.2.
Successors
and Assigns
. The Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Company
and the Participants.
18.3.
Governing
Law
. The validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance with the laws of the State of Minnesota, without
regard to the conflicts of laws principles of any jurisdictions.
Exhibit 10.3
CELCUITY INC.
2017 STOCK INCENTIVE
PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (“
Option
Agreement
”) is entered into as of the “
Grant Date
” set forth below, by and between Celcuity Inc.,
a Delaware corporation (the “
Company
”) and the person named below (the “
Optionee
”). The Option
granted hereby is granted under the Celcuity Inc. 2017 Stock Incentive Plan (the “
Plan
”). Unless otherwise defined
herein, terms used in this Option Agreement that are defined in the Plan will have the meanings given to them in the Plan.
1.
Grant
of Option
. The Company hereby grants to the Optionee an option (the “
Option
”) to purchase the number of
shares of Common Stock of the Company (the “
Shares
”) set forth below, at the exercise price per Share set forth
below (the “
Exercise Price
”), subject to the terms and conditions of the Plan, which is incorporated herein
by reference. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option
Agreement, the terms and conditions of the Plan will prevail.
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Grant Number:
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SO-______________
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Optionee:
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______________________________________
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Grant Date:
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________________
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Vesting Commencement Date:
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________________
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Total Number of Shares of Stock
Subject to the Option:
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______________ Shares
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Exercise Price per Share:
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$_____ per Share
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Total Exercise Price:
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$______________
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Type of Option (check one):
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____ Incentive Stock Option
____ Non-Statutory Stock Option
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Term/Expiration Date:
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________________
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Earlier Expiration:
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See Section 6.
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2.
Vesting
Schedule
. This Option may be exercised, in whole or in part, in accordance with the following schedule:
(a)
Time-Based
Vesting
. This Option will vest and become exercisable
[insert vesting schedule]
;
provided
,
however
, that
if the Optionee ceases to be employed by the Company or to provide services to the Company as a director, consultant or independent
contractor before this Option has become exercisable with respect to all of the Shares, no additional Shares will vest after the
termination of such services. This Option may be exercised, in whole or in part, at any time or from time to time after it vests
and until this Option expires pursuant Section 6 of this Option Agreement.
(b)
Treatment
Upon a Change in Control
. In the event of a Change in Control of the Company, the Committee administering the Plan may take
any of the actions described in Section 14 of the Plan with respect to this Option.
3.
Type
of Option
. If designated above as an Incentive Stock Option (“
ISO
”), this Option is intended to qualify
as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an Incentive Stock Option,
to the extent that it exceeds the $100,000 rule of Code Section 422(d) or otherwise fails to satisfy the requirements of Code Section
422, it will be treated as a Non-Statutory Stock Option (“
NSO
”).
4.
Exercise
of Option
.
(a)
Right
to Exercise
. This Option will be exercisable during its term in accordance with the vesting schedule set forth in Section 2
of this Option Agreement and with the applicable provisions of the Plan and this Option Agreement. This Option may not be exercised
for a fraction of a share. No portion of the Option which has not become vested and exercisable at the date of the Optionee’s
termination of service to the Company will thereafter become vested and exercisable, except as may be set forth in a written agreement
between the Company and the Optionee.
(b)
Duration
of Exercisability
. The installments provided in the vesting schedule set forth in Section 2 of this Option Agreement are cumulative.
Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in Section 2 of this Option
Agreement will remain vested and exercisable until this Option expires pursuant Section 6 of this Option Agreement.
(c)
Method
of Exercise
. This Option will be exercisable by delivering to the Company’s Chief Financial Officer, or to such other
party as may be designated by such officer, a written notice of exercise in the form approved by the Company (the “
Exercise
Notice
”), stating the election to exercise the Option and the number of Shares with respect to which the Option is being
exercised (the “
Exercised Shares
”), and containing such other representations and agreements as may be required
by the Company pursuant to the provisions of the Plan. The Exercise Notice must be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. The Optionee will also be required to make adequate provision for all withholding taxes relating
to the exercise as a condition to the exercise of the Option. This Option will be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise Price and arrangement for the adequate provision for
the withholding taxes relating to the exercise.
(d)
Issuance
of Shares
. No Shares will be issued pursuant to the exercise of the Option unless such issuance and exercise complies with
applicable laws. Assuming such compliance, for income tax purposes the Shares will be considered transferred to the Optionee on
the date on which the Option is exercised with respect to such Exercised Shares.
(e)
Restrictions
on Exercise
. This Option may not be exercised if the issuance of Shares upon such exercise or the method of payment of consideration
for such shares would constitute a violation of any applicable law.
(f)
Investment
Representations
. Unless the Shares have been registered under the Securities Act, at the time this Option is exercised, the
Exercise Notice delivered to the Company by the Optionee will, if required by the Company, contain investment representations approved
by the Company.
5.
Method
of Payment
. The aggregate Exercise Price shall be payable in cash (including a personal check or certified or bank cashier’s
check, payable to the order of the Company) or in such other manner as may be approved by the Board or Committee.
6.
Expiration
of Option
. This Option will expire and may not be exercised to any extent by anyone after the first to occur of the following
events:
(a)
Expiration
of Term of Option
. The Term/Expiration Date set forth in Section 1 of this Option Agreement;
(b)
Termination
of Service without Cause
. The expiration of three months from the date of the Optionee’s voluntary or involuntary termination
of service to the Company, unless the Optionee’s service is terminated for Cause or such termination occurs by reasons of
the Optionee’s death or Disability;
(c)
Cause
.
The date of the Optionee’s termination of service if the Optionee’s service is terminated for Cause, or the date of
written notice from the Company to the Optionee of a material breach of any confidentiality or non-compete agreement entered into
with the Company, if the Optionee commits such a material breach either during or after the Optionee’s period of service
to the Company;
(d)
Death
or Disability
. The expiration of one year from the date of the Optionee’s death, either during or after the Optionee’s
period of service to the Company, or of termination of the Optionee’s service by reason of the Optionee’s Disability;
or
(e)
Cancellation
upon Change in Control
. The cancellation of this Option by action of the Committee pursuant to Section 14 of the Plan, in connection
with a Change in Control of the Company.
7.
Non-Transferability
of Option
. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of the Plan and this Option Agreement
will be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.
8.
Tax
Obligations
.
(a)
Withholding
Taxes
. The Optionee agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining
the Optionee) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements
applicable to the Option exercise. The Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of exercise.
(b)
Notice
of Disqualifying Disposition of ISO Shares
. If the Option granted to the Optionee herein is an ISO, and if the Optionee sells
or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two years after
the Date of Grant, or (ii) the date one year after the date of exercise, the Optionee must immediately notify the Company
in writing of such disposition. The Optionee acknowledges and agrees that the Optionee may be subject to income tax withholding
by the Company on the compensation income recognized by the Optionee.
9.
NO
GUARANTEE OF CONTINUED SERVICE
. THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE
HEREOF IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). THE OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
OPTION AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND WILL NOT INTERFERE WITH THE OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE OPTIONEE’S RELATIONSHIP
(A) AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT CAUSE; (B) AS A CONSULTANT PURSUANT TO THE TERMS OF THE OPTIONEE’S AGREEMENT
WITH THE COMPANY OR AN AFFILIATE; OR (C) AS A DIRECTOR PURSUANT TO THE BYLAWS OF THE COMPANY AND ANY APPLICABLE PROVISIONS OF THE
CORPORATE LAW OF THE STATE OR OTHER JURISDICTION IN WHICH THE COMPANY IS DOMICILED, AS THE CASE MAY BE.
10.
Entire
Agreement; Governing Law
. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties regarding the acquisition of stock in the Company and supersede in their entirety all prior oral and written
undertakings and agreements of the Company and the Optionee on that subject, with the exception of any other options previously
granted and delivered to the Optionee under the Plan or any similar plan maintained by the Company or its Affiliates. This Option
Agreement may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and
the Optionee. This Option Agreement is governed by the internal substantive laws but not the choice of law rules of the State of
Minnesota.
* * * * *
[Signature page follows]
Signature page to
Stock Option Agreement
By the Optionee’s signature and the
signature of the Company’s representative below, the Optionee and the Company agree that this Option is granted under and
governed by the terms and conditions of the Plan and this Option Agreement. The Optionee has reviewed the Plan and this Option
Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and
fully understands all provisions of the Plan and Option Agreement. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board of Directors (or any Committee to whom the Board has delegated administration
of the Plan) upon any questions relating to the Plan and this Option Agreement.
The Optionee further agrees to notify the
Company of any change in the Optionee’s residence address indicated below.
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OPTIONEE:
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CELCUITY INC.
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By:
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(Signature)
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Title:
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(Print Name)
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(Print Name)
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Address:
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Address:
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Celcuity Inc.
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16305 36th Avenue N., Suite 450
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Minneapolis, MN 55446
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Exhibit 10.4
CELCUITY INC.
2017 STOCK INCENTIVE
PLAN
RESTRICTED STOCK
AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (“
Agreement
”)
is entered into as of the “
Grant Date
” set forth below, by and between Celcuity Inc., a Delaware corporation
(the “
Company
”) and the person named below (the “
Participant
”). The Award granted hereby
is granted under the Celcuity Inc. 2017 Stock Incentive Plan (the “
Plan
”). Unless otherwise defined herein,
terms used in this Agreement that are defined in the Plan will have the meanings given to them in the Plan.
1.
Grant
of Award
. The Company hereby grants to the Participant a restricted stock award (the “
Award
”) for the number
of shares of Common Stock of the Company (the “
Shares
”) set forth below, on the terms and conditions set forth
herein, and subject to the terms and conditions of the Plan, which is incorporated herein by reference. In the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan
will prevail.
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Grant Number:
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RSA-
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Participant:
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Grant Date:
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Vesting Commencement Date:
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Total Number of Shares of Stock
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Subject to the Award:
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______________ Shares
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The Shares subject to this Award will be
subject to the restrictions set forth in Section 3 of this Agreement and will be subject to forfeiture for the period and on the
terms and conditions set forth in Section 4 of this Agreement. For purposes of this Agreement, “
Vested Shares
”
means Shares that, at the applicable date, have vested and with respect to which the risk of forfeiture has lapsed in accordance
with Section 4 and “
Unvested Shares
” means Shares that, at the applicable date, have not yet vested and with
respect to which the risk of forfeiture has not lapsed in accordance with Section 4. Any Shares distributed as a stock dividend
or in a stock split or otherwise with respect to the Shares before they vest will be considered additional Unvested Shares subject
to the same transfer restrictions and risk of forfeiture as the underlying Unvested Shares and will be held as prescribed in Section
2.
2.
Issuance
of Shares
. Until the Shares vest as provided in Section 4, the Unvested Shares will be evidenced either by a book-entry in
the Participant’s name with the Company’s transfer agent or by one or more stock certificates issued in the Participant’s
name. Any such stock certificate(s) will be deposited with the Company or its designee and will bear the following legend:
“The Shares represented by
this certificate are subject to certain restrictions upon transfer and may be transferred only in accordance with the terms of
a Restricted Stock Agreement between the Company and the registered holder, a copy of which is on file at the principal office
of the Company.”
Any book-entry will be accompanied by a similar
legend and shall be subject to such stop-transfer orders and other restrictions as the Company may deem advisable. Simultaneously
with the execution and delivery of this Agreement, the Participant shall deliver to the Company one or more stock powers endorsed
in blank relating to the Unvested Shares, in the form attached hereto as
Exhibit A
.
3.
Transfer
Restrictions
. Until the Shares vest as provided in Section 4, the Participant is not entitled to sell, transfer, assign, pledge
or otherwise encumber or dispose of the Shares, and the Shares remain subject to possible forfeiture as provided in Section 4.
Except as otherwise provided in this Agreement or the Plan, until such risk of forfeiture has lapsed or the Unvested Shares have
been forfeited pursuant to Section 4, the Participant will be entitled to vote the Unvested Shares and receive all dividends attributable
to the Unvested Shares, but the Participant will not have any other rights as a stockholder with respect to the Unvested Shares.
4.
Risk
of Forfeiture; Vesting Schedule
.
(a)
General
.
The Shares will remain subject to forfeiture until vested as provided herein. The Shares will vest, and the risk of forfeiture
will lapse,
[insert vesting schedule]
;
provided
,
however
, that if the Participant ceases to provide services
to the Company before this Award has become vested with respect to all of the Shares, no additional Shares will vest after the
termination of such services.
(b)
Treatment
Upon a Change in Control
. In the event of a Change in Control of the Company, the Committee administering the Plan may take
any of the actions described in Section 14 of the Plan with respect to this Award.
(c)
Accelerated
Vesting upon Death or Disability
. If the Participant ceases to provide services to the Company by reason of the Participant’s
death or disability before this Award has become vested with respect to all of the Shares, all Unvested Shares shall vest as of
such termination date.
(d)
Termination
of Service Relationship
. If the Participant ceases to provide services to the Company for any reason other than death or disability
before this Award has become vested with respect to all of the Shares, the Participant will immediately forfeit all Unvested Shares
without any payment therefor.
5.
Delivery
of Vested Shares
. After any Shares vest pursuant to Section 4, the Company will, as soon as practicable, cause to be delivered
to the Participant, or to the Participant’s designated beneficiary or estate in the event of the Participant’s death,
the applicable number of Vested Shares. Delivery of the Vested Shares will be effected by the removal of restrictions on the book-entry
in the stock register maintained by the Company’s transfer agent with a corresponding notice provided to the Participant,
by the electronic delivery of the Shares to a brokerage account designated by the Participant, or by delivery to the Participant
of a stock certificate without restrictive legend, and shall be subject to the tax withholding provisions of Section 6.
6.
Tax
Consequences and Withholding
.
(a) The
Participant acknowledges that unless the Participant makes a proper and timely Section 83(b) election as described below, then
at the time the Shares vest, the Participant will be obligated to recognize ordinary income in an amount equal to the Fair Market
Value as of the date of vesting of the Shares then vesting. No Vested Shares will be delivered to the Participant unless the Participant
has made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may
be due as a result of the vesting of the Shares. The Participant hereby authorizes the Company (or any Affiliate) to withhold from
payroll or other amounts payable to the Participant any sums required to satisfy such withholding tax obligations in accordance
with the provisions of Section 13 of the Plan. If the Participant wishes to satisfy some or all of such withholding tax obligations
by delivering Shares already owned by the Participant or by having the Company retain a number of Vested Shares otherwise deliverable
to the Participant, the Participant must make such a request which shall be subject to approval by the Company.
(b) The
Participant understands that, with respect to the grant of this Award, the Participant may file an election with the Internal Revenue
Service, within 30 days of the Grant Date, electing pursuant to Section 83(b) of the Internal Revenue Code to be taxed on the Fair
Market Value of the Unvested Shares as of the Grant Date. THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE
RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PARTICIPANT’S BEHALF. If the Participant makes such an election,
the Participant must promptly provide the Company with a copy, and make arrangements acceptable to the Company for the payment
of withholding taxes as described above.
7.
NO
GUARANTEE OF CONTINUED SERVICE
. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
SCHEDULE IN THIS AGREEMENT IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED OR BEING GRANTED AN AWARD). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,
THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE
OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT
INTERFERE WITH THE PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE PARTICIPANT’S RELATIONSHIP (A)
AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT CAUSE; (B) AS A CONSULTANT PURSUANT TO THE TERMS OF THE PARTICIPANT’S AGREEMENT
WITH THE COMPANY OR AN AFFILIATE; OR (C) AS A DIRECTOR PURSUANT TO THE BYLAWS OF THE COMPANY AND ANY APPLICABLE PROVISIONS OF THE
CORPORATE LAW OF THE STATE OR OTHER JURISDICTION IN WHICH THE COMPANY IS DOMICILED, AS THE CASE MAY BE.
8.
Entire
Agreement; Governing Law
. The Plan is incorporated herein by reference. The Plan and this Agreement constitute the entire agreement
of the parties regarding the acquisition of stock in the Company and supersede in their entirety all prior oral and written undertakings
and agreements of the Company and the Participant on that subject, with the exception of any other Awards previously granted and
delivered to the Participant under the Plan or any similar plan maintained by the Company or its Affiliates. This Agreement may
not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and the Participant.
This Agreement is governed by the internal substantive laws but not the choice of law rules of the State of Minnesota.
* * * * *
[Signature page follows]
Signature page to
Restricted Stock Agreement
By the Participant’s signature and
the signature of the Company’s representative below, the Participant and the Company agree that this Award is granted under
and governed by the terms and conditions of the Plan and this Agreement. The Participant has reviewed the Plan and this Agreement
in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands
all provisions of the Plan and Agreement. The Participant hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board of Directors (or any Committee to whom the Board has delegated administration of the Plan) upon
any questions relating to the Plan and this Agreement.
The Participant further agrees to notify
the Company of any change in the Participant’s residence address indicated below.
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PARTICIPANT:
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CELCUITY INC.
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By:
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(Signature)
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Title:
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(Print Name)
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(Print Name)
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Address:
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Address:
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Celcuity Inc.
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16305 36th Avenue N., Suite 450
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Minneapolis, MN 55446
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EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, and pursuant to
that certain Restricted Stock Agreement (the “
Agreement
”) dated as of _____________, 20__, the
undersigned, ___________________________________________________________________, hereby sells, assigns and transfers unto
_________________________________________________________________________________________ shares of Common Stock of Celcuity Inc., a Delaware
corporation, standing in his or her name on the books of said corporation in book-entry form or represented by the following
stock certificate:
Certificate No. _____, representing _________________
shares
The undersigned hereby irrevocably constitutes
and appoints the duly elected Secretary of the corporation to be his or her attorney-in-fact, with full power of substitution,
to transfer said stock on the books of the corporation.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED
BY THE AGREEMENT.
Instruction
: Please do not fill in any blanks other
than the signature line. The purpose of this assignment is to enable the Company to cancel the Shares in the event of forfeiture
as set forth in the Agreement without requiring additional signatures on the part of the Participant.
Exhibit 10.5
CELCUITY INC.
2017 STOCK INCENTIVE
PLAN
RESTRICTED STOCK
UNIT AGREEMENT
THIS RESTRICTED STOCK UNIT AGREEMENT (“
Agreement
”)
is entered into as of the “
Grant Date
” set forth below, by and between Celcuity Inc., a Delaware corporation
(the “
Company
”) and the person named below (the “
Participant
”). The Award granted hereby
is granted under the Celcuity Inc. 2017 Stock Incentive Plan (the “
Plan
”). Unless otherwise defined herein,
terms used in this Agreement that are defined in the Plan will have the meanings given to them in the Plan.
1.
Grant
of Award
. The Company hereby grants to the Participant a restricted stock unit award (the “
Award
”) for the
number of restricted stock units (the “
Units
”) set forth below, on the terms and conditions set forth herein,
and subject to the terms and conditions of the Plan, which is incorporated herein by reference. In the event of a conflict between
the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will
prevail.
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Grant Number:
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RSU-______________
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Participant:
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______________________________________
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Grant Date:
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________________
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Vesting Commencement Date:
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________________
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Total Number of Restricted Stock Units Subject to the Award:
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______________ Units
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Each Unit represents the right to receive
one share of the Company’s Common Stock (“
Shares
”). The Units granted to the Participant will be credited
to an account in the Participant’s name maintained by the Company. This account shall be unfunded and maintained for book-keeping
purposes only, with the Units simply representing an unfunded and unsecured obligation of the Company. The Units subject to this
Award will be subject to the restrictions set forth in Section 2 of this Agreement and will be subject to forfeiture for the period
and on the terms and conditions set forth in Section 3 of this Agreement.
2.
Non-Transferability
.
Neither this Award nor the Units subject to this Award may be sold, transferred, assigned, pledged or otherwise encumbered or disposed
of other than by will or by the laws of descent or distribution. The Units and the Participant’s right to receive Shares
in Settlement of the Units will be subject to forfeiture as provided in Section 3.
3.
Vesting
of Restricted Stock Units
.
(a)
Vesting
.
The Units will remain subject to forfeiture until vested as provided herein. The Units will vest, and the risk of forfeiture will
lapse,
[insert vesting schedule]
;
provided
,
however
, that if the Participant ceases to provide services to
the Company before this Award has become vested with respect to all of the Units, no additional Units will vest after the termination
of such services.
(b)
Treatment
Upon a Change in Control
. In the event of a Change in Control of the Company, the Committee administering the Plan may take
any of the actions described in Section 14 of the Plan with respect to this Award.
(c)
Accelerated
Vesting upon Death or Disability
. If the Participant ceases to provide services to the Company by reason of the Participant’s
death or disability before this Award has become vested with respect to all of the Units, all unvested Units will vest as of such
termination date.
(d)
Termination
of Service Relationship
. If the Participant ceases to provide services to the Company for any reason other than death or disability
before this Award has become vested with respect to all of the Units, the Participant will immediately forfeit all unvested Units
without any payment therefor.
4.
Settlement
of Units
. After any Units vest pursuant to Section 3, the Company will, as soon as practicable, cause to be issued and delivered
to the Participant, or to the Participant’s designated beneficiary or estate in the event of the Participant’s death,
one Share in payment and settlement of each vested Unit. Delivery of the Shares will be effected by issuance of one or more stock
certificates issued in the Participant’s name, by a book-entry in the Participant’s name with the Company’s transfer
agent, or by the electronic delivery of the Shares to a brokerage account designated by the Participant, and shall be subject to
the tax withholding provisions of Section 5 and shall be in complete satisfaction and settlement of such vested Units.
5.
Tax
Consequences and Withholding
. No Shares will be delivered to the Participant in settlement of vested Units unless the Participant
has made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may
be due as a result of the delivery of the Shares. The Participant hereby authorizes the Company (or any Affiliate) to withhold
from payroll or other amounts payable to the Participant any sums required to satisfy such withholding tax obligations in accordance
with the provisions of Section 13 of the Plan. If the Participant wishes to satisfy some or all of such withholding tax obligations
by delivering Shares already owned by the Participant or by having the Company retain a number of Shares otherwise deliverable
to the Participant upon settlement of the Units, the Participant must make such a request which shall be subject to approval by
the Company.
6.
Delay
in Payment for Specified Employee
. If this Award is subject to Code Section 409A and the Committee determines that the Participant
is a “specified employee” within the meaning of Code Section 409A, then any payment due to the Participant’s
separation from service will not be paid earlier than the first day of the seventh month immediately following such separation
from service.
7.
No
Shareholder Rights
. The Units subject to this Award do not entitle the Participant to any rights of a shareholder of the Company’s
Common Stock. The Participant will not have any of the rights of a shareholder of the Company in connection with the grant of Units
subject to this Agreement unless and until Shares are issued to the Participant upon settlement of the Units as provided in Section
4.
8.
NO
GUARANTEE OF CONTINUED SERVICE
. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF UNITS PURSUANT TO THE VESTING SCHEDULE
IN THIS AGREEMENT IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT AT THE WILL OF THE COMPANY (AND NOT THROUGH
THE ACT OF BEING HIRED OR BEING GRANTED AN AWARD). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE WITH THE PARTICIPANT’S
RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE PARTICIPANT’S RELATIONSHIP (A) AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT
CAUSE; (B) AS A CONSULTANT PURSUANT TO THE TERMS OF THE PARTICIPANT’S AGREEMENT WITH THE COMPANY OR AN AFFILIATE; OR (C)
AS A DIRECTOR PURSUANT TO THE BYLAWS OF THE COMPANY AND ANY APPLICABLE PROVISIONS OF THE CORPORATE LAW OF THE STATE OR OTHER JURISDICTION
IN WHICH THE COMPANY IS DOMICILED, AS THE CASE MAY BE.
9.
Entire
Agreement; Governing Law
. The Plan is incorporated herein by reference. The Plan and this Agreement constitute the entire agreement
of the parties regarding the acquisition of stock in the Company and supersede in their entirety all prior oral and written undertakings
and agreements of the Company and the Participant on that subject, with the exception of any other Awards previously granted and
delivered to the Participant under the Plan or any similar plan maintained by the Company or its Affiliates. This Agreement may
not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and the Participant.
This Agreement is governed by the internal substantive laws but not the choice of law rules of the State of Minnesota.
* * * * *
[Signature page follows]
Signature page to
Restricted Stock Unit Agreement
By the Participant’s signature and
the signature of the Company’s representative below, the Participant and the Company agree that this Award is granted under
and governed by the terms and conditions of the Plan and this Agreement. The Participant has reviewed the Plan and this Agreement
in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands
all provisions of the Plan and Agreement. The Participant hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board of Directors (or any Committee to whom the Board has delegated administration of the Plan) upon
any questions relating to the Plan and this Agreement.
The Participant further agrees to notify
the Company of any change in the Participant’s residence address indicated below.
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PARTICIPANT:
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CELCUITY INC.
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By:____________________________________________
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(Signature)
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Title:___________________________________________
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(Print Name)
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(Print Name)
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Address:
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Address:
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Celcuity Inc.
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16305 36th Avenue N., Suite 450
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Minneapolis, MN 55446
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Exhibit 10.6
CELCUITY INC.
2017 STOCK INCENTIVE
PLAN
STOCK APPRECIATION
RIGHTS AGREEMENT
THIS STOCK APPRECIATION RIGHTS AGREEMENT
(“
Agreement
”) is entered into as of the “
Grant Date
” set forth below, by and between Celcuity
Inc., a Delaware corporation (the “
Company
”) and the person named below (the “
Participant
”).
The Award granted hereby is granted under the Celcuity Inc. 2017 Stock Incentive Plan (the “
Plan
”). Unless otherwise
defined herein, terms used in this Agreement that are defined in the Plan will have the meanings given to them in the Plan.
1.
Grant
of Award
. The Company hereby grants to the Participant an award (the “
Award
”) of Stock Appreciation Rights
(“
SARs
”) with respect to the number of shares of Common Stock of the Company (the “
Shares
”)
set forth below, at the exercise price per Share set forth below (the “
Exercise Price
”), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. In the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail.
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Grant Number:
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SAR-______________
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Participant:
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______________________________________
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Grant Date:
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________________
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Vesting Commencement Date:
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________________
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Total Number of Shares of Stock Subject to SARs under the Award:
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______________ Shares
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Exercise Price per Share:
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$_____ per Share
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Term/Expiration Date:
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________________
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Earlier Expiration:
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See Section 4.
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Each SAR represents the right to receive a payment from the
Company at the time of exercise, in the form of Shares, cash or a combination of both, equal to the difference between the Fair
Market Value of one Share of Common Stock and the per-share Exercise Price set forth above.
2.
Vesting
Schedule
. This Award may be exercised, in whole or in part, in accordance with the following schedule:
(a)
Time-Based
Vesting
. This Award will vest
[insert vesting schedule]
;
provided
,
however
, that if the Participant ceases
ceases to be employed by the Company or to provide services to the Company as a director, consultant or independent contractor
before this Award has become vested with respect to all of the SARs, no additional SARs will vest after the termination of such
services. This Award may be exercised, in whole or in part, at any time or from time to time after it vests and until this Award
expires pursuant Section 5 of this Agreement.
(b)
Treatment
Upon a Change in Control
. In the event of a Change in Control of the Company, the Committee administering the Plan may take
any of the actions described in Section 14 of the Plan with respect to this Award.
(c)
Accelerated
Vesting upon Death or Disability
. If the Participant ceases to provide services to the Company by reason of the Participant’s
death or disability before this Award has become vested with respect to all of the SARs, all unvested SARs will vest as of such
termination date.
3.
Exercise
of Award
.
(a)
Right
to Exercise
. This Award will be exercisable during its term in accordance with the vesting schedule set forth in Section 2
of this Agreement and with the applicable provisions of the Plan and this Agreement. This Award may not be exercised for a fraction
of a share. No portion of the Award which has not become vested and exercisable at the date of the Participant’s termination
of service to the Company will thereafter become vested and exercisable, except as may be set forth in a written agreement between
the Company and the Participant.
(b)
Duration
of Exercisability
. The installments provided in the vesting schedule set forth in Section 2 of this Agreement are cumulative.
Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in Section 2 of this Agreement
will remain vested and exercisable until this Award expires pursuant Section 4 of this Agreement.
(c)
Method
of Exercise
. This Award will be exercisable by delivering to the Company’s Chief Financial Officer, or to such other
party as may be designated by such officer, a written notice of exercise in the form approved by the Company (the “
Exercise
Notice
”), stating the election to exercise the Award and the number of SARs with respect to which the Award is being
exercised (the “
Exercised SARs
”), and containing such other representations and agreements as may be required
by the Company pursuant to the provisions of the Plan. The Participant will be required to make adequate provision for all withholding
taxes relating to the exercise as a condition to the exercise of the Award. This Award will be deemed to be exercised upon receipt
by the Company of such fully executed Exercise Notice accompanied by arrangements for the adequate provision for the withholding
taxes relating to the exercise.
(d)
Settlement
of SARs
. Upon the exercise of all or a portion of this Award, the Participant will be entitled to receive, with respect to
each Exercised SAR, a payment equal to (i) the amount by which the Fair Market Value of one Share on the date of exercise
exceeds (ii) the per share Exercise Price of the SAR. The Participant may request that such payment be made in the form of
Shares, cash, or a combination of Shares and cash;
provided, however,
that the Committee shall make the final determination
as to the form or forms of payment.
4.
Expiration
of Award
. This Award will expire and may not be exercised to any extent by anyone after the first to occur of the following
events:
(a)
Expiration
of Term of Award
. The Term/Expiration Date set forth in Section 1 of this Agreement;
(b)
Termination
of Service without Cause
. The expiration of three months from the date of the Participant’s voluntary or involuntary
termination of service to the Company, unless the Participant’s service is terminated for Cause or such termination occurs
by reasons of the Participant’s death or Disability;
(c)
Cause
.
The date of the Participant’s termination of service if the Participant’s service is terminated for Cause, or the date
of written notice from the Company to the Participant of a material breach of any confidentiality or non-compete agreement entered
into with the Company, if the Participant commits such a material breach either during or after the Participant’s period
of service to the Company;
(d)
Death
or Disability
. The expiration of one year from the date of the Participant’s death, either during or after the Participant’s
period of service to the Company, or of termination of the Participant’s service by reason of the Participant’s Disability;
or
(e)
Cancellation
upon Change in Control
. The cancellation of this Award by action of the Committee pursuant to Section 14 of the Plan, in connection
with a Change in Control of the Company.
5.
Non-Transferability
of Award
. Neither this Award nor the SARs may be transferred in any manner otherwise than by will or by the laws of descent
or distribution and may be exercised during the lifetime of the Participant only by the Participant. The terms of the Plan and
this Agreement will be binding upon the executors, administrators, heirs, successors and assigns of the Participant.
6.
Tax
Obligations
. The Participant agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing
or retaining the Participant) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding
requirements applicable to the Award exercise. The Participant acknowledges and agrees that the Company may refuse to honor the
exercise of this Award if such withholding amounts are not delivered at the time of exercise.
7.
NO
GUARANTEE OF CONTINUED SERVICE
. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
SCHEDULE IN THIS AGREEMENT IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN AWARD OR ACQUIRING ANY SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES
AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE
AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, DIRECTOR, OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD,
OR AT ALL, AND WILL NOT INTERFERE WITH THE PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE PARTICIPANT’S
RELATIONSHIP (A) AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT CAUSE; (B) AS A CONSULTANT PURSUANT TO THE TERMS OF THE PARTICIPANT’S
AGREEMENT WITH THE COMPANY OR AN AFFILIATE; OR (C) AS A DIRECTOR PURSUANT TO THE BYLAWS OF THE COMPANY AND ANY APPLICABLE PROVISIONS
OF THE CORPORATE LAW OF THE STATE OR OTHER JURISDICTION IN WHICH THE COMPANY IS DOMICILED, AS THE CASE MAY BE.
8.
Entire
Agreement; Governing Law
. The Plan is incorporated herein by reference. The Plan and this Agreement constitute the entire agreement
of the parties regarding the acquisition of stock in the Company and supersede in their entirety all prior oral and written undertakings
and agreements of the Company and the Participant on that subject, with the exception of any other Awards previously granted and
delivered to the Participant under the Plan or any similar plan maintained by the Company or its Affiliates. This Agreement may
not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and the Participant.
This Agreement is governed by the internal substantive laws but not the choice of law rules of the State of Minnesota.
* * * * *
[Signature page follows]
Signature page to
Stock Appreciation Rights Agreement
By the Participant’s signature and
the signature of the Company’s representative below, the Participant and the Company agree that this Award is granted under
and governed by the terms and conditions of the Plan and this Agreement. The Participant has reviewed the Plan and this Agreement
in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands
all provisions of the Plan and Agreement. The Participant hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board of Directors (or any Committee to whom the Board has delegated administration of the Plan) upon
any questions relating to the Plan and this Agreement.
The Participant further agrees to notify
the Company of any change in the Participant’s residence address indicated below.
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PARTICIPANT:
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CELCUITY INC.
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By:
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(Signature)
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Title:
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(Print Name)
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(Print Name)
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Address:
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Address:
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Celcuity Inc.
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16305 36th Avenue N., Suite 450
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Minneapolis, MN 55446
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Exhibit 10.17
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (“
Agreement
”)
dated as of the _____ day of __________, 2017, is by and between Celcuity Inc., a Delaware corporation (the “
Company
”),
and ____________________________ (“
Indemnitee
”).
RECITALS
A. Indemnitee
is serving as a director and/or officer of the Company, and as such is performing a valuable service for the Company.
B. Both
the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers
of publicly-held companies.
C. The
Board of Directors of the Company has determined that enhancing the ability of the Company to attract and retain qualified persons
to serve as directors and/or officers is in the best interests of the Company and its stockholders, and that the Company should
therefore seek to assure such persons that there will be adequate certainty of protection through indemnification and insurance
against risks of claims and actions against them arising out of their service to the Company.
D. Section
145 of the General Corporation Law of Delaware permits the Company to indemnify and advance expenses to its officers and directors
and to persons who serve at the request of the Company as directors, officers, employees, or agents of other corporations or enterprises.
The Company’s Bylaws provide that the Company may enter into indemnification agreements that specify the rights and obligations
of the Company and such persons with respect to indemnification, advancement of expenses and related matters.
E. The
Company desires to have Indemnitee continue to serve the Company in an Official Capacity (as defined below), and Indemnitee desires
to continue so to serve the Company, provided, and on the express condition, that Indemnitee is furnished with the indemnity and
other rights set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in
consideration of Indemnitee’s continued service to the Company in an Official Capacity, the parties hereto agree as follows:
1.
Definitions
.
For purposes of this Agreement:
(a) “
Change
of Control
” means a change in control of the Company occurring after the Effective Date of a nature that would be required
to be reported in response to Item 5.01 of Current Report on Form 8-K (or in response to any similar item on any similar schedule
or form) promulgated under the Securities Exchange Act of 1934 (the “
Act
”), whether or not the Company is then
subject to such reporting requirement; provided, however, that, without limitation, such a Change of Control shall be deemed to
have occurred if after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of
the Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities
of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities
without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such
person attaining such percentage; (ii) the Company is a party to a merger, consolidation, sale of assets or other reorganization,
or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction
or event constitute less than a majority of the Board of Directors of the surviving corporation or parent corporation (in the case
of a merger in which the Company becomes a wholly-owned subsidiary of another entity) thereafter; or (iii) during any period
of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (including for this
purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of
at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason
to constitute at least a majority of the Board of Directors.
(b) “
Disinterested
Director
” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
or advancement of Expenses is sought by Indemnitee.
(c) “
Effective
Date
” means the date first above written.
(d) “
Expenses
”
shall include all direct and indirect costs including, but not limited to, reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, advisory fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in
connection with investigating, prosecuting, defending (or preparing to investigate, prosecute or defend) a Proceeding, or being
or preparing to be a witness in a Proceeding.
(e) “
Independent
Counsel
” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to
either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(f) “
Official
Capacity
” means Indemnitee’s corporate status as an officer and/or director and any other fiduciary capacity in
which Indemnitee serves the Company, its subsidiaries and affiliates, and any other entity which Indemnitee serves in such capacity
at the request of the Company’s CEO, its Board of Directors or any committee of its Board of Directors. “Official Capacity”
also refers to all actions Indemnitee takes or does not take while serving in such capacity.
(g) “
Proceeding
”
includes any actual or threatened inquiry, investigation, action, suit, arbitration, or any other such actual or threatened action
or occurrence, whether civil, criminal, administrative or investigative, whether or not initiated prior to the Effective Date,
except a proceeding initiated by Indemnitee pursuant to Section 8 of this Agreement to enforce his or her rights under this Agreement.
2.
Service
by Indemnitee
. So long as Indemnitee has or holds an Official Capacity with the Company, Indemnitee will serve in such Official
Capacity faithfully and to the best of Indemnitee’s ability. Indemnitee may at any time and for any reason resign from Indemnitee’s
Official Capacity (subject to any other contractual obligation or any obligation imposed by operation of law).
3.
Indemnification
.
(a)
General
.
Except as otherwise provided in this Agreement, the Company shall indemnify Indemnitee to the fullest extent permitted by the Delaware
General Corporation Law as such law may from time to time be amended. Indemnitee shall be entitled to the indemnification provided
in this Section if Indemnitee is a party or is threatened to be made a party to any Proceeding by reason of his or her Official
Capacity or by reason of anything done or not done by Indemnitee in his or her Official Capacity. The Company shall indemnify Indemnitee
against all costs, judgments, penalties, fines, liabilities, amounts paid in settlement by or on behalf of Indemnitee in any Proceeding,
and Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding, if Indemnitee is determined to
have met the standard of conduct set forth in Section 7(a).
(b)
Exceptions
.
Indemnitee shall receive no indemnification hereunder:
(i) to
the extent such indemnification is expressly prohibited by Delaware law or the public policies of Delaware, the United States of
America or agencies of any governmental authority in any jurisdiction governing the matter in question;
(ii) to
the extent payment is actually made to or on behalf of Indemnitee for the amount to which Indemnitee would otherwise have been
entitled under this Agreement pursuant to an insurance policy, or another indemnity agreement or arrangement from the Company or
other person or entity;
(iii) in
connection with any Proceeding, or part thereof (including claims and permissive counterclaims) initiated by Indemnitee, except
a judicial proceeding pursuant to Section 8 to enforce rights under this Agreement, unless the Proceeding (or part thereof) was
authorized by the Board of Directors of the Company;
(iv) with
respect to any Proceeding brought by or on behalf of the Company against Indemnitee if Indemnitee failed to act in good faith and
in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company;
(v) with
respect to any claim, issue, or matter as to which Delaware law expressly prohibits such indemnification by reason of any adjudication
of liability of Indemnitee to the Company, unless and only to the extent that the Delaware Court of Chancery, or the court in which
such Proceeding was brought, shall determine upon application that, despite an adjudication of liability but in view of all the
circumstances of the case, Indemnitee is entitled to indemnification for such Expenses as such court shall deem proper.
4.
Advancement
of Expenses
.
(a)
General
.
Except as otherwise provided in this Agreement, Expenses incurred by Indemnitee in connection with a Proceeding shall be paid by
the Company in advance of the final disposition of such Proceeding to the fullest extent permitted by the Delaware General Corporation
Law as such law may from time to time be amended. Indemnitee shall be entitled to the advancement provided in this Section if Indemnitee
is a party or is threatened to be made a party to any Proceeding by reason of his or her Official Capacity or by reason of anything
done or not done by Indemnitee in his or her Official Capacity. The Company shall advance to Indemnitee Expenses actually and reasonably
incurred by Indemnitee in connection with such Proceeding. Notwithstanding the foregoing, unless otherwise determined pursuant
to Section 5, the Company will not advance or continue to advance Expenses to Indemnitee (except by reason of the fact that Indemnitee
is or was a director of the Company in which event this sentence will not apply) in any Proceeding if a determination is reasonably
and promptly made (i) by the Board of Directors by a majority vote of Disinterested Directors, even though less than a quorum,
(ii) if there are no Disinterested Directors or the Disinterested Directors so direct, by Independent Counsel in a written
opinion, or (iii) by a majority vote of a committee of Disinterested Directors designated by a majority vote of Disinterested
Directors, that the facts known to the decision-making party at the time such determination is made demonstrate that Indemnitee
acted in bad faith or in a manner that Indemnitee did not believe to be in or not opposed to the best interests of the Company,
or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe his conduct was unlawful.
(b)
Affirmation
and Undertaking in Connection with Request for Advancement
. As a condition precedent to the Company’s advancement of
Expenses to Indemnitee, Indemnitee shall provide the Company with (i) a written affirmation by Indemnitee of his or her good
faith belief that he or she has met the standard of conduct necessary for indemnification under §145 of the Delaware General
Corporation Laws, and (ii) an undertaking, in substantially the form attached as
Exhibit 1
, by or on behalf of
Indemnitee to reimburse such amount if it is finally determined, after all appeals, by a court of competent jurisdiction that Indemnitee
is not entitled to be indemnified against such Expenses by the Company as provided by this Agreement or otherwise. Indemnitee’s
undertaking to reimburse any such amounts is not required to be secured.
(c)
Exceptions
.
The Company shall not be obligated to advance Expenses to Indemnitee with respect to claims initiated or brought voluntarily by
such Indemnitee and not by way of defense, except (i) as set forth in Section 8(e); (ii) in specific cases if the Company’s
Board of Directors has approved the initiation or bringing of such a claim; or (iii) as otherwise required under Section 145
of the DGCL.
5.
Indemnification
for Expenses of Successful Party
. Notwithstanding the limitations of any other provisions of this Agreement, to the extent
that Indemnitee is successful on the merits or otherwise in defense of any Proceeding, or in defense of any claim, issue or matter
therein, including, without limitation, the dismissal of any Proceeding without prejudice, or if it is ultimately determined that
Indemnitee is otherwise entitled to be indemnified against Expenses, Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred in connection therewith. If Indemnitee is partially successful on the merits or otherwise in defense of
any Proceeding, such indemnification shall be apportioned appropriately to reflect the degree of success.
6.
Payment
of Expenses Incurred in Serving as a Witness
. Notwithstanding any other provisions of this Agreement, Indemnitee shall be entitled
to payment or reimbursement by the Company of all Expenses reasonably incurred by Indemnitee for serving as a witness by reason
of Indemnitee’s Official Capacity in any Proceeding with respect to which Indemnitee is not a party or threatened to be made
a party.
7.
Determination
of Entitlement to Indemnification
.
(a)
Standard
of Conduct
. Except as provided in Section 5 above, Indemnitee shall be entitled to indemnification pursuant to this Agreement
only upon a determination that Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe that Indemnitee’s
conduct was unlawful.
(b)
Manner
of Determining Eligibility
. Upon written request of the Indemnitee for indemnification, the entitlement of Indemnitee to such
requested indemnification shall be determined:
(i) by
the Board of Directors of the Company by a majority vote of Disinterested Directors, whether or not such majority constitutes a
quorum; or
(ii) by
a committee of Disinterested Directors designated by majority vote of such Disinterested Directors, whether or not such majority
constitutes a quorum; or
(iii) by
Independent Counsel in a written opinion to the Board of Directors, or designated committee of the Board, with a copy to Indemnitee,
which Independent Counsel shall be selected by majority vote of the Company’s directors at a meeting at which a quorum is
present, or a majority vote of the Disinterested Directors, or committee of Disinterested Directors; or
(iv) by
the Company’s stockholders, by a majority vote of those in attendance at a meeting at which a quorum is present; or
(v) if
a Change of Control has occurred, by Independent Counsel (selected by Indemnitee) in a written opinion to the Board of Directors
of the Company, a copy of which shall be delivered to the Indemnitee.
(c)
Change
of Control
. The Company agrees that if there is a Change of Control of the Company (other than a Change of Control which has
been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change of Control)
then with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnification under this Agreement
or any other agreements, Company Bylaw, provision in the Certificate of Incorporation or any other document now or hereafter in
effect relating to such indemnification, the Company shall seek legal advice from Independent Counsel selected by Indemnitee. The
Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to indemnify fully such counsel against
any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement
or its engagement pursuant hereto.
(d)
Payment
of Costs of Determining Eligibility
. The Company shall pay all costs associated with its determination of Indemnitee’s
eligibility for indemnification.
(e)
Presumptions
and Effect of Certain Proceedings
. The Secretary of the Company shall, promptly upon receipt of Indemnitee’s request
for indemnification, notify in writing the Board of Directors or such other person or persons empowered to make the determination
requested in Section 7(b), and the Company shall thereafter promptly make such determination or initiate the appropriate process
for making such determination. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of
nolo contendere
or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s
conduct was unlawful.
8.
Remedies
of Indemnitee
.
(a) If
(i) a determination is made pursuant to Section 7 of this Agreement that Indemnitee is not entitled to indemnification under
this Agreement, (ii) advancement of Expenses, to the fullest extent permitted by applicable law, is not timely made pursuant
to Section 4 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to
Section 7(b) or (c) of this Agreement within sixty (60) days after receipt by the Company of the request for indemnification, (iv) payment
of indemnification is not made pursuant to Section 5 or 6 of this Agreement within fifteen (15) business days after receipt by
the Company of written request therefor, or (v) payment of indemnification pursuant to Section 3 of this Agreement is not
made within fifteen (15) business days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee
shall be entitled to seek an adjudication by the United States District Court, District of Minnesota, or the Hennepin County District
Court in Minneapolis, Minnesota, of Indemnitee’s right to such indemnification or advancement of Expenses. The Company shall
not oppose Indemnitee’s right to seek any such adjudication.
(b) If
a determination shall have been made pursuant to Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding commenced pursuant to this Section 8 shall be conducted in all respects as a de novo trial on the merits
and Indemnitee shall not be prejudiced by that adverse determination. In any judicial proceeding commenced pursuant to this Section
8, Indemnitee shall be presumed to be entitled to indemnification under this Agreement and the Company shall have the burden of
proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer
to or introduce into evidence any determination pursuant to Section 7 of this Agreement adverse to Indemnitee for any purpose.
If Indemnitee commences a judicial proceeding pursuant to this Section 8, Indemnitee shall not be required to reimburse the Company
for any advances pursuant to Section 4 until a final determination is made with respect to Indemnitee’s entitlement to indemnification
(as to which all rights of appeal have been exhausted or lapsed).
(c) Neither
the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement
of any action pursuant to this Section 8 that indemnification is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee
has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not
met the applicable standard of conduct. If a determination shall have been made pursuant to Section 7 of this Agreement that Indemnitee
is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant
to this Section 8, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary
to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The
Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 8 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.
(e) The
Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses (including reasonable
attorneys’ fees) and, if requested by an Indemnitee who has provided the affirmation and undertaking required by Section
4(b), shall (within ten (10) days after the Company’s receipt of such written request) advance to Indemnitee, to the fullest
extent permitted by applicable law, such Expenses (including reasonable attorneys’ fees) that are incurred by Indemnitee
in connection with any judicial proceeding brought by Indemnitee (i) to enforce Indemnitee’s rights under, or to recover
damages for breach of, this Agreement or any other indemnification agreement or provision of the Certificate of Incorporation or
the Company’s Bylaws now or hereafter in effect; or (ii) for recovery or advances under any insurance policy maintained
by any person for the benefit of Indemnitee, to the full extent Indemnitee ultimately is determined to be entitled to such indemnification,
advance or insurance recovery, as the case may be.
(f) Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be
required to be made prior to the final disposition of a Proceeding.
9.
Continuation
of Obligation of Company
. All agreements and obligations of the Company contained in this Agreement shall continue during the
period of Indemnitee’s Official Capacity and shall continue thereafter with respect to any Proceedings based on or arising
out of Indemnitee’s Official Capacity. This Agreement shall be binding upon all successors and assigns of the Company (including
any transferee of all or substantially all of its assets and any successor by merger or operation of law) and shall inure to the
benefit of Indemnitee’s heirs, personal representatives and estate.
10.
Notification
and Defense of Claim
. Promptly after receipt by Indemnitee of notice of any Proceeding, Indemnitee will notify the Company
in writing of the commencement thereof; but the omission so to notify the Company will not relieve it from any liability that it
may have to Indemnitee. Notwithstanding any other provision of this Agreement, with respect to any such Proceeding of which Indemnitee
notifies the Company:
(a) Except
as otherwise provided in Section 10(b), to the extent that it may wish, the Company may, separately or jointly with any other
indemnifying party, assume the defense of the Proceeding. After notice from the Company to Indemnitee of its election to assume
the defense of the Proceeding, the Company shall not be liable to Indemnitee under this Agreement for any Expenses subsequently
incurred by Indemnitee except as otherwise provided below. Indemnitee shall have the right to employ Indemnitee’s own counsel
in such Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the
Company, (ii) Indemnitee shall have reasonably determined that there is a conflict of interest between the Company and Indemnitee
in the conduct of the defense of the Proceeding, and such determination is supported by an opinion of qualified legal counsel addressed
to the Company, or (iii) the Company shall not within sixty (60) calendar days of receipt of notice from Indemnitee in fact
have employed counsel to assume the defense of the Proceeding.
(b) The
Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company, or as to which Indemnitee
shall have made the determination provided for in subparagraph (a)(ii) above.
(c) Regardless
of whether the Company has assumed the defense of a Proceeding, the Company shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, and the Company
shall not settle any Proceeding in any manner that would impose any penalty or limitation on, or require any payment from, Indemnitee
without Indemnitee’s written consent. Neither the Company nor Indemnitee will unreasonably withhold its consent to any proposed
settlement.
(d) Until
the Company receives notice of a Proceeding from Indemnitee, the Company shall have no obligation to indemnify or advance Expenses
to Indemnitee as to Expenses incurred prior to Indemnitee’s notification of Company.
11.
Severability;
Prior Indemnification Agreements
. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable
for any reason whatsoever (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including
without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that are not by themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby,
and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph
of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent of the parties that the Company provide protection
to Indemnitee to the fullest enforceable extent provided for in this Agreement.
12.
Non-exclusivity
.
The rights conferred by this Agreement shall not be exclusive of any other right Indemnitee may have or hereafter acquire under
any applicable statute, provision of the Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of stockholders
or disinterested directors, or otherwise, both as to action in his Official Capacity and as to action in another capacity while
holding office. The indemnification provided under this Agreement shall continue as to Indemnitee for any action such Indemnitee
took or did not take while serving in an Official Capacity even though the Indemnitee may have ceased to serve in such Official
Capacity.
13.
Non-attribution
of Actions of Any Indemnitee to Any Other Indemnitee
. For purposes of determining whether Indemnitee is entitled to indemnification
or advancement of Expenses by the Company under this Agreement or otherwise, the actions or inactions of any other indemnitee or
group of indemnitees shall not be attributed to Indemnitee.
14.
Headings;
References; Pronouns
. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed
to constitute part of this Agreement or to affect the construction thereof. References herein to section numbers are to sections
of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural as appropriate.
15.
Other
Provisions
.
(a) This
Agreement shall be interpreted and enforced in accordance with the laws of Delaware.
(b) This
Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all
of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability
is sought needs to be produced as evidence of the existence of this Agreement.
(c) This
Agreement shall not be deemed an employment contract between the Company and Indemnitee, and the Company shall not be obligated
to continue Indemnitee in Indemnitee’s Official Capacity by reason of this Agreement.
(d) Upon
a payment to Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of Indemnitee to recover against any person for such liability, and Indemnitee shall execute all documents and instruments required
and shall take such other actions as may be necessary to secure such rights, including the execution of such documents as may be
necessary for the Company to bring suit to enforce such rights.
(e) No
supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether
or not similar) nor shall such waiver constitute a continuing waiver.
(f) Indemnitee’s
rights under this Agreement shall extend to Indemnitee’s spouse, members of Indemnitee’s immediate family, and Indemnitee’s
representative(s), guardian(s), conservator(s), estate, executor(s), administrator(s), and trustee(s), (all of whom are referred
to as “
Related Parties
”), as the case may be, to the extent a Related Party or a Related Party’s property
is subject to a Proceeding by reason of Indemnitee’s Official Capacity.
[
Signature page follows
]
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement on and as of the day and year first above written.
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CELCUITY INC.
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By:
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Name:
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Title:
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Indemnitee
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EXHIBIT 1
UNDERTAKING TO REPAY INDEMNIFICATION EXPENSES
I, ___________________________________,
agree to reimburse Celcuity Inc., a Delaware corporation (the “
Company
”), for all Expenses paid to me by the
Company for my defense in any civil or criminal action, suit, or Proceeding (as defined in my Indemnification Agreement with the
Company), if and to the extent it shall ultimately be determined that I am not entitled to be indemnified by the Company for such
expenses.
Exhibit 23.1
Consent of Independent Registered Public
Accounting Firm
The Board of Governors and Members
Celcuity LLC:
We consent to the use of our report dated June 9, 2017, except as
to Notes 5 and 8 which are as of August 31, 2017, with respect to the balance sheets of Celcuity LLC as of December 31, 2016
and 2015, and the related statements of operations, changes in stockholders’ equity, and cash flows for each of the years
ended December 31, 2016 and 2015 contained in this amended registration statement and to the reference to our firm under the
heading “Experts” in the prospectus.
/s/ Boulay PLLP
Minneapolis, Minnesota
September 12, 2017