Exhibit 10.16


 


Lock-Up Agreement






________, 202__


 


ThinkEquity


A Division of Fordham Financial Management, Inc.


17 State Street, 22nd Floor


New York, NY 10004


 


As Representative of the several Underwriters named on Schedule
1 to the Underwriting Agreement referenced below






Ladies and Gentlemen:


 


The undersigned understands
that ThinkEquity, a Division of Fordham Financial Management, Inc. (the “Representative”), proposes to enter
into an Underwriting Agreement (the “Underwriting Agreement”) with Vallon Pharmaceuticals Inc., a _______ corporation
(the “Company”), providing for the initial public offering (the “Public Offering”) of shares
of common stock, par value $0.0001 per share, of the Company (the “Common Shares”).


 


To induce the Representative
to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written
consent of the Representative, the undersigned will not, during the period commencing on the date hereof and ending [180/365]1
days after the date of the Underwriting Agreement relating to the Public Offering (the “Lock-Up Period”),
(1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Common
Shares or any securities convertible into or exercisable or exchangeable for Common Shares, whether now owned or hereafter acquired
by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively,
the “Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise
any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer,
sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the
prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open
market transactions after the completion of the Public Offering; provided that no filing under Section 13 or Section 16(a)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement shall
be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market
transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust
for the benefit of the undersigned or a family member (for purposes of this lock-up agreement, “family member” means
any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a
charity or educational institution; (d) if the undersigned is a corporation, partnership, limited liability company or other business
entity, (i) any transfers of Lock-Up Securities to another corporation, partnership or other business entity that controls, is
controlled by or is under common control with the undersigned or (ii) distributions of Lock-Up Securities to members, partners,
stockholders, subsidiaries or affiliates (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of
the undersigned; (e) if the undersigned is a trust, to a trustee or beneficiary of the trust; provided that in the case
of any transfer pursuant to the foregoing clauses (b), (c) (d) or (e), (i) any such transfer shall not involve a disposition
for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form
of this lock-up agreement and (iii) no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement
shall be required or shall be voluntarily made; (f) the receipt by the undersigned from the Company of Common Shares upon the
vesting of restricted stock awards or stock units or upon the exercise of options to purchase Common Shares issued under an equity
incentive plan of the Company or an employment arrangement described in the Pricing Prospectus (as defined in the Underwriting
Agreement) (the “Plan Shares”) or the transfer of Common Shares or any securities convertible into Common Shares
to the Company upon a vesting event of the Company’s securities or upon the exercise of options to purchase the Company’s
securities, in each case on a “cashless” or “net exercise” basis or to cover tax obligations of the undersigned
in connection with such vesting or exercise, but only to the extent such right expires during the Lock-up Period, provided
that no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be required or shall
be voluntarily made within 90 days after the date of the Underwriting Agreement, and after such 90th day, if the undersigned
is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership
of Common Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report to the effect
that the purpose of such transfer was to cover tax withholding obligations of the undersigned in connection with such vesting
or exercise and, provided further, that the Plan Shares shall be subject to the terms of this lock-up agreement;
(g) the transfer of Lock-Up Securities pursuant to agreements described in the Pricing Prospectus under which the Company has
the option to repurchase such securities or a right of first refusal with respect to the transfer of such securities, provided
that if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction
in beneficial ownership of Common Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule
or report describing the purpose of the transaction; (h) the establishment of a trading plan pursuant to Rule 10b5-1 under the
Exchange Act for the transfer of Lock-Up Securities, provided that (i) such plan does not provide for the transfer of Lock-Up
Securities during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is
required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan, such
public announcement or filing shall include a statement to the effect that no transfer of Lock-Up Securities may be made under
such plan during the Lock-Up Period; (i) the transfer of Lock-Up Securities that occurs by operation of law, such as pursuant
to a qualified domestic order or in connection with a divorce settlement, provided that the transferee agrees to sign and
deliver a lock-up agreement substantially in the form of this lock-up agreement for the balance of the Lock-Up Period, and provided further,
that any filing under Section 13 or Section 16(a) of the Exchange Act that is required to be made during the Lock-Up Period as
a result of such transfer shall include a statement that such transfer has occurred by operation of law; and (j) the transfer
of Lock-Up Securities pursuant to a bona fide third party tender offer, merger, consolidation or
other similar transaction made to all holders of the Common Shares involving a change of control (as defined below) of the Company
after the closing of the Public Offering and approved by the Company’s board of directors; provided that in the event
that the tender offer, merger, consolidation or other such transaction is not completed,
the Lock-Up Securities owned by the undersigned shall remain subject to the restrictions contained in this lock-up agreement.
For purposes of clause (j) above, “change of control” shall mean the consummation of any bona fide third party tender
offer, merger, amalgamation, consolidation or other similar transaction the result of which is that any “person” (as
defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 of the Exchange Act) of a majority of total voting power of the voting stock of the Company. The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer
of the undersigned’s Lock-Up Securities except in compliance with this lock-up agreement.


 





 



 


1
365 days to be inserted if officer or director and 180 days to be inserted if any other holder of common stock.


 






     


     


    

 


The undersigned agrees
that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during
the period from the date hereof to and including the 34th day following the expiration of the Lock-Up Period, the undersigned
will give notice thereof to the Company and will not consummate any such transaction or take any such action unless it has received
written confirmation from the Company that the Lock-Up Period has expired.


 


If the undersigned
is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable
to any issuer-directed or “friends and family” securities that the undersigned may purchase in the Public Offering;
(ii) the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the
foregoing restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending
release or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by
press release through a major news service at least two (2) business days before the effective date of the release or waiver. Any
release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business
days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver
is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing
to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in
effect at the time of such transfer.


 


The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public
Offering and that the Representative (which shall be a third party beneficiary of this lock-up agreement) and the Company shall
be entitled to specific performance of the undersigned’s obligations hereunder. The undersigned hereby represents that the
undersigned has the power and authority to execute, deliver and perform this lock-up agreement, that the undersigned has received
adequate consideration therefor and that the undersigned will indirectly benefit from the closing of the transactions contemplated
by the Underwriting Agreement. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding
upon the undersigned’s heirs, legal representatives, successors and assigns.


 


This lock-up agreement
may not be amended or otherwise modified in any respect without the written consent of each of the Company, the Representative
and the undersigned. This lock-up agreement shall be construed and enforced in accordance with the laws of the State of New York
without regard to the principles of conflict of laws. The undersigned hereby irrevocably submits to the exclusive jurisdiction
of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located
in Manhattan, for the purposes of any suit, action or proceeding arising out of or relating to this lock-up agreement, and hereby
waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the
jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the
suit, action or proceeding is improper. The undersigned hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for
notices to it under the Underwriting Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. The undersigned agrees and understands that this lock-up
agreement does not intend to create any relationship between the undersigned and the Representative and that the Representative
is not entitled to cast any votes on the matters herein contemplated and that no issuance or sale of the Company’s securities
is created or intended by virtue of this lock-up agreement.


 






     


     


    

 


The undersigned understands
that, if the Underwriting Agreement is not executed by June 30, 2021, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Shares to be
sold thereunder, then this lock-up agreement shall be void and of no further force or effect.




 






     


     


    

 





Whether or not the
Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.


 


	 	Very truly yours,




 


 


	 	 




	 	(Name - Please Print)




 


 


	 	 




	 	(Signature)




 


 


 


	 	 




	 	(Name of Signatory, in the case of entities - Please Print)




 


 


 


	 	 




	 	(Title of Signatory, in the case of entities - Please Print)




 


 


 


	 	Address: