Document:

artl_ex103.htm

EXHIBIT 10.3
 
ARTELO BIOSCIENCES, INC.
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This Amended and Restated Employment Agreement (the “Agreement”) is entered into as of August 30, 2019, and is effective as of June 20, 2019 (the “Effective Date”) by and between Artelo Biosciences, Inc. (the “Company”), and Gregory D. Gorgas (“Executive”). 
 
WHEREAS, Executive previously entered into an Employment Agreement with the Company dated April 3, 2017 (the “Prior Agreement”).
 
WHEREAS, the Company and Executive desire to amend and restate the Prior Agreement to provide the terms governing Executive’s employment to align with market practice. 
 
WHEREAS, in consideration of the promises and mutual covenants contained herein, Executive and the Company agree as follows:
 
AGREEMENT
1. Duties and Scope of Employment.
 
(a) Positions and Duties. As of the Effective Date, Executive will continue to serve as the Company’s Chief Executive Officer reporting to the Company’s Board of Directors (the “Board”). Executive will render such business and professional services in the performance of his duties, consistent with Executive’s position within the Company and with those duties customarily performed by the chief executive officer at comparable companies, as will reasonably be assigned to him by Executive’s supervisor. The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”
 
(b) Board Membership. During the Employment Term, Executive will serve as a member of the Board. 
 
(c) Obligations. During the Employment Term, Executive will perform his duties faithfully and to the best of his ability and will devote his full business efforts and time to the Company. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Board, except that Executive may engage in outside professional civic, chartable, and community activities that do not impair his ability to perform his obligations under this Agreement, including but not limited to fundraising for the UCSD Cancer Center and support of the Sickle Cell Disease Foundation of California.
 
2. At-Will Employment. The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause or prior warning. Executive understands and agrees that neither his job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of his employment with the Company. However, as described in this Agreement, Executive may be entitled to severance benefits depending on the circumstances of Executive’s termination of employment with the Company.
 
	 
	
	
 
	 

  
3. Compensation.
 
(a) Base Salary. During the Employment Term, the Company will pay Executive an annual salary of not less than $396,000 as compensation for his services (the “Base Salary”). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to the usual, required withholdings. Executive’s salary will be subject to review and adjustments will be made based upon the Company’s normal performance review practices.
 
(b) Target Bonus. During each calendar year of the Employment Term, Executive will be eligible to receive an annual bonus of up to 50% of Executive’s Base Salary, less applicable withholdings, upon achievement of performance objectives to be determined by the compensation committee (the “Compensation Committee”) of the Board in its sole discretion (the “Target Bonus”) provided the Compensation Committee has met and conferred with Executive in good faith at or before the start of each calendar year and considered his input as the performance objectives for that year. The Target Bonus, or any portion thereof, will be paid as soon as practicable after the Compensation Committee determines that the Target Bonus has been earned, but in no event shall the Target Bonus be paid after the later of (i) the fifteenth (15th) day of the third (3rd) month following the close of the Company’s fiscal year in which the Target Bonus is earned or (ii) March 15 following the calendar year in which the Target Bonus is earned. For the avoidance of doubt, Executive shall be eligible for a Target Bonus of $198,000 for calendar year 2019.
 
(c) Stock Option. At the first meeting of the Compensation Committee following the Effective Date, it will be recommended that Executive be granted a stock option, which will be, to the extent possible under the $100,000 rule of Section 422(d) of the Code, an “incentive stock option” (as defined in Section 422 of the Code), to purchase 75,000 shares at an exercise price equal to the fair market value on the date of grant (the “Option”). Subject to the accelerated vesting provisions set forth herein, the Option will vest as follows: 1/48th of the shares subject to the Option shall vest monthly on the same day of the month as the date of grant (and if there is no corresponding day, the last day of the month), so that the Option will be fully vested and exercisable four (4) years from the date of grant, subject to Executive continuing to provide services to the Company through the relevant vesting dates. The Option will be subject to the terms, definitions and provisions of the Company’s 2018 Equity Incentive Plan (the “Plan”) and the stock option agreement by and between Executive and the Company, both of which documents are incorporated herein by reference.
 
(d) Life Insurance. During the Employment Term, the Company shall pay the full premiums for a life insurance policy covering Executive for coverage of up to One Million dollars. Executive will be entitled to select personal beneficiaries for 100% of the proceeds of the life insurance policy. Executive may choose to pay any additional premiums to increase the coverage of this life insurance policy.
 
	 
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4. Employee Benefits. During the Employment Term, Executive will be entitled to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, subject to the eligibility requirements of such plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time. 
 
5. Paid-Time Off. During the Employment Term, Executive shall accrue and be entitled to take paid vacation in accordance with the Company’s standard vacation and paid sick leave policies in effect from time to time, including the Company’s policies regarding vacation accruals. Executive shall also be entitled to all other holiday and leave pay generally available to all other employees of the Company.
 
6. Business Expense Reimbursement. The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.
 
7. Severance.
 
(a) Termination for other than Cause, Death or Disability Outside Change in Control Period. If, outside the Change in Control Period (as defined below), the Company (or any parent or subsidiary or successor of the Company) terminates Executive’s employment with the Company other than for Cause, death or Disability, then, subject to Section 1 of Appendix A, Executive will be entitled to receive: 
 
(i) the Accrued Benefits (as defined below);
 
(ii) continuing payments of Executive’s base salary, as then in effect, less applicable withholdings and in accordance with the Company’s normal payroll procedures, for a period of twelve (12) months from the date Executive’s employment with the Company terminates with the first payment to be made within 10 days following the effective date of the Release (and include any payments that otherwise would have been paid to Executive between Executive’s termination date and the effective date of the Release under the Company’s normal payroll cycle), with any remaining payments paid in accordance with the Company’s normal payroll practices for the remainder of the twelve-month period following Executive’s termination of employment (subject to any delay as may be required for compliance with Section 409A in accordance with Appendix A) (for the avoidance of doubt, in no case will Executive receive cash severance payments for greater than twelve (12) months following Executive’s termination date, subject to compliance with Section 409A); 
 
(iii) reimbursement for the cost of continuation of health coverage for Executive and Executive’s eligible dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) until the earlier of (i) twelve (12) months following Executive’s termination of employment or (ii) the date Executive and Executive’s eligible dependents are no longer eligible for COBRA; provided, however, if, at the time of Executive’s termination of employment, the Company determines that providing the COBRA reimbursement in this paragraph would result in a violation of law or an excise tax to the Company, then the Company instead will pay a lump sum payment equal to twelve (12) months of Executive’s estimated COBRA premiums, less applicable withholdings, within 10 days following the effective date of the Release (subject to any delay as may be required for compliance with Section 409A); 
 
	 
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(iv) a lump-sum payment equal to a pro-rated portion of Executive’s Target Bonus in the calendar year that Executive’s employment is terminated based on the number of days worked in the year of Executive’s termination up through Executive’s termination date to be paid within 10 days following the effective date of the Release (subject to any delay as may be required for compliance with Section 409A); and 
 
(v) accelerated vesting as of Executive’s employment termination date in an amount equal to 100% of the then-unvested shares subject to Executive’s then outstanding time-based equity awards (including the Option), provided that, with respect to any equity awards with performance-based vesting, such equity awards shall vest in accordance with the terms of the applicable award agreements if the applicable performance goals are satisfied at the time of termination or such performance goals are expected to be satisfied. The determination whether such performance goals are satisfied or are expected to be satisfied shall be in the sole discretion of the Compensation Committee or the Board, as the case may be. All equity awards with performance-based vesting that do not vest at termination by their terms or pursuant to this Section 7(v) shall be forfeited.
 
(b) Termination other than for Cause, death or Disability, or Resignation for Good Reason within the Change in Control Period. If, within the period beginning within three (3) months prior to a Change in Control ending twelve (12) months following a Change in Control (the “Change in Control Period”), the Company (or any parent or subsidiary or successor of the Company) terminates Executive’s employment with the Company other than for Cause, death or Disability or Executive terminates his employment for Good Reason, then, subject to Section 1 of Appendix A, Executive will be entitled to receive: 
 
(i) the Accrued Benefits;
 
(ii) a lump-sum payment equal to twelve (12) months of Executive’s base salary, as then in effect, to be paid within 10 days following the effective date of the Release (subject to any delay as may be required for compliance with Section 409A); 
 
(iii) reimbursement for the cost of continuation of health coverage for Executive and Executive’s eligible dependents pursuant to the COBRA until the earlier of (i) twelve (12) months following Executive’s termination of employment or (ii) the date Executive and Executive’s eligible dependents are no longer eligible for COBRA; provided, however, if, at the time of Executive’s termination of employment, the Company (or its successor) determines that providing the COBRA reimbursement in this paragraph would result in a violation of law or an excise tax to the Company (or its successor), then the Company (or its successor) instead will pay a lump sum payment equal to twelve (12) months of Executive’s estimated COBRA premiums, less applicable withholdings, within 10 days following the effective date of the Release (subject to any delay as may be required for compliance with Section 409A); 
 
(iv) a lump-sum payment equal to a pro-rated portion of Executive’s Target Bonus in the calendar year that Executive’s employment is terminated based on the number of days worked in the year of Executive’s termination up through Executive’s termination date to be paid within 10 days following the effective date of the Release (subject to any delay as may be required for compliance with Section 409A); and
 
	 
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(v) accelerated vesting as of Executive’s employment termination date in an amount equal to 100% of the then-unvested shares subject to Executive’s then outstanding time-based and performance-based equity awards (including the Option).
 
(c) Termination for Cause, Death or Disability; Voluntary Resignation under Certain Circumstances. If Executive’s employment with the Company is terminated voluntarily by Executive without Good Reason or for Good Reason outside the Change in Control Period, by the Company for Cause or due to Executive’s death or Disability, then Executive shall be entitled to receive salary and accrued but unused vacation time through the effective date of termination plus any Bonus earned, but not yet paid, as of Executive’s date of termination (“Accrued Benefits”). Moreover, on Executive’s termination date: (i) all vesting will terminate immediately with respect to Executive’s then outstanding equity awards; (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except Executive’s Accrued Benefits); and (iii) Executive will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect.
 
(d) Exclusive Remedy. In the event of a termination of Executive’s employment with the Company (or any parent or subsidiary or successor of the Company), the provisions of this Section 7 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement. Executive will be entitled to no severance or other benefits upon termination of employment with respect to acceleration of award vesting or severance pay other than those benefits expressly set forth in this Section 7.
 
8. Confidential Information. Executive agrees to enter into the Company’s standard At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (the “Confidential Information Agreement”) upon the Effective Date.
 
9. Non-Solicitation of Employees. In light of the amount of sensitive and confidential information involved in the discharge of Executive’s duties, and the harm to the Company that would result if such knowledge or expertise were disclosed or made available to a competitor, and as a reasonable step to help protect the confidentiality of such information, Executive agrees that during the Employment Term and for a period of one (1) year thereafter, Executive will not directly or indirectly, individually or as a consultant to, or as an employee, officer, stockholder, director, or other owner of or participant in any business, solicit (or assist in soliciting) any person who is then, or at any time within six (6) months prior thereto was, an employee of the Company, who earned annually $25,000 or more as an employee of the Company during the last six (6) months of his or her own employment to work for (as an employee, consultant or otherwise) any business, individual, partnership, firm, corporation, or other entity whether or not engaged in competitive business with the Company.
  
	 
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10. Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. The failure of the Company to secure a commitment from any successor to assume the obligations of this Agreement shall be considered a termination of Executive by the Company without Cause. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.
 
11. Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well established commercial overnight service, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:
 
If to the Company:
 
Artelo Biosciences, Inc.
888 Prospect Street, Suite 210
La Jolla, California 92037
Attn: Corporate Secretary
 
If to Executive:
 
at the last residential address known by the Company.
 
12. Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.
 
13. Arbitration. Executive agrees that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, stockholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from Executive’s service to the Company, shall be subject to arbitration in accordance with the provisions of the Confidential Information Agreement. 
 
14. Integration. This Agreement, together with the Confidential Information Agreement, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. With respect to stock options granted on or after the date of this Agreement, the acceleration of vesting provisions provided herein will apply to such stock options except to the extent otherwise explicitly provided in the applicable stock option agreement. This Agreement may be modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to this Agreement.
  
	 
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15. Waiver of Breach. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.
 
16. Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.
 
17. Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.
 
18. Governing Law. This Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).
 
19. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.
 
20. Counterparts. This Agreement may be executed in counterparts, and may be signed electronically, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.
  
 
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.
   
	COMPANY:
	 
	 

	 
	 
	 

	ARTELO BIOSCIENCES, INC.
	 
	 

	 
	 
	 
	 

	By:
	/s/ Connie Matsui	 
	Date: August 30, 2019

	 
	 
	 
	 

	Name: 
	Connie Matsui 
	 
	 

	 
	 
	 
	 

	Title: 
	Chairperson of the Board of Directors
	 
	 

	 
	 
	 
	 

	EXECUTIVE:
		 

	 
	 
	 

	/s/ Gregory D. Gorgas	 
	Date: August 30, 2019

	Gregory D. Gorgas
		
	 
	 
	 

 
[SIGNATURE PAGE TO EXECUTIVE EMPLOYMENT AGREEMENT]
  
	 
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Appendix A
 
ADDITIONAL TERMS TO EXECUTIVE EMPLOYMENT AGREEMENT
 
Unless otherwise defined below, capitalized terms used herein will have the meanings set forth in the Agreement.
 
1. Conditions to Receipt of Severance; No Duty to Mitigate. 
 
(a) Separation Agreement and Release of Claims. The receipt of any vesting acceleration, severance payments and benefits pursuant to Section 7(a) or (b) of the Agreement will be subject to Executive (1) signing and not revoking a customary separation agreement and release of claims related to Executive’s service with the Company (which may include an agreement not to disparage the Company, non-solicit provisions and other standard terms and conditions) in a form reasonably satisfactory to the Company (the “Release”) and provided that such Release becomes effective and irrevocable no later than sixty (60) days following the termination date (such deadline, the “Release Deadline”); and (2) resigning from the Board effective no later than the employment termination date, to the extent Executive is a member of the board. If the Release does not become effective and irrevocable by the Release Deadline or if Executive does not resign from the Board as specified above, Executive will forfeit any rights to severance or benefits under this Agreement. In no event will severance payments or benefits be paid or provided until the Release becomes effective and irrevocable.
 
(b) Section 409A. 
 
(i) Notwithstanding anything to the contrary in this Agreement, no Deferred Payments will be paid or otherwise provided until Executive has a “separation from service” (within the meaning of Section 409A) from the relevant position or positions. Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A solely pursuant to Treasury Regulation Section 1.409A‐1(b)(9) will be payable until Executive has a “separation from service” (within the meaning of Section 409A).
 
(ii) Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination of employment (other than due to death), then the Deferred Payments that are payable within the first six (6) months following Executive’s separation from service, will, to the extent required to be delayed pursuant to Section 409A(a)(2)(B) of the Code, become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. In no event will the Company reimburse Executive for any taxes that may be imposed on Executive as a result of Section 409A. Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A‐2(b)(2) of the Treasury Regulations.
 
	 
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(iii) Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of this Agreement.
 
(iv) Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments for purposes of this Agreement. 
 
(v) The provisions of this Agreement and the payments and benefits hereunder are intended to be exempt from or comply with the requirements of Section 409A so that none of the severance or other payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.
 
(c) Confidential Information Agreement. Executive’s receipt of any payments or benefits under Section 7 will be subject to Executive continuing to comply with the terms of Confidential Information Agreement (as defined in Section 8).
 
(d) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment.
 
2. Definitions.
 
(a) Cause. For purposes of this Agreement, “Cause” is defined as: (i) an act of dishonesty made by Executive in connection with Executive’s responsibilities as an employee that has caused the Company to suffer material harm; (ii) Executive’s conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude; (iii) Executive’s gross misconduct that has caused the Company to suffer material harm; (iv) Executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive’s relationship with the Company; (v) Executive’s willful breach of any obligations under any written agreement or covenant with the Company; (vi) Executive’s continued failure to perform Executive’s employment duties after Executive has received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that Executive has not substantially performed Executive’s duties; provided, that Cause shall only exist after; (vii) the Board delivers written notice to Executive of the Board’s determination that Cause exists; (viii) such notice sets forth in reasonable detail such facts and circumstances; and (ix) Executive has failed to fully correct any of the events listed in clauses (iii), (v) and (vi) above, if such events are reasonably capable of being fully corrected, within 30 days after delivery to Executive of the Board’s written notice of its determination that Cause exists.
 
	 
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(b) Change in Control. For purposes of this Agreement, “Change in Control” has the meaning set forth in the Plan.
 
(c) Code. For purposes of this Agreement, “Code” means the Internal Revenue Code of 1986, as amended.
 
(d) Deferred Payment. For the purposes of this Agreement, “Deferred Payment” means any severance pay or benefits to be paid or provided to Executive (or Executive’s estate or beneficiaries) pursuant to this Agreement and any other severance payments or separation benefits to be paid or provided to Executive (or Executive’s estate or beneficiaries), that in each case, when considered together, are considered deferred compensation under Section 409A.
 
(e) Disability. For purposes of this Agreement, “Disability” means Executive’s (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering Company employees.
 
(f) Good Reason. For purposes of this Agreement, “Good Reason” means Executive’s resignation within 30 days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without Executive’s express written consent: (i) a material reduction of Executive’s duties, position or responsibilities, or the removal of Executive from such position and responsibilities, either of which results in a material diminution of Executive’s authority, duties or responsibilities, unless Executive is provided with a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation and status); provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Executive Officer of the Company remains as such following a Change in Control but is not made the Chief Executive Officer of the acquiring corporation) will not constitute “Good Reason”; (ii) a material reduction in Executive’s base salary (except where there is a reduction applicable to the management team generally); (iii) the failure of the Company to timely pay or provide to Executive any portion of Executive’s compensation or benefits then due to Executive; or (iv) a material change in the geographic location of Executive’s primary work facility or location; provided, that a relocation of less than 50 miles from Executive’s then present location will not be considered a material change in geographic location. Executive may not resign for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within 90 days of the initial existence of the grounds for “Good Reason” and a reasonable cure period of not less than 30 days following the date the Company receives such notice during which such condition must not have been cured.
 
	 
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(g) Section 409A. For purposes of this Agreement, “Section 409A” means Section 409A of the Code and the final regulations and any guidance thereunder and any applicable state law equivalent, as each may be amended or promulgated from time to time.
 
(h) Section 409A Limit. For purposes of this Agreement, “Section 409A Limit” will mean two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during Executive’s taxable year preceding Executive’s taxable year of his or her separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s separation from service occurred.
 
3. Limitation on Payments. In the event that the severance and other payments and benefits provided for in this Agreement or otherwise payable to Executive (collectively, the “Payments”) (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 3 of Appendix A, would be subject to the excise tax imposed by Section 4999 of the Code, then such Payments will be either:
 
(a) delivered in full, or
 
(b) delivered as to such lesser extent which would result in no portion of such Payments being subject to the excise tax under Code Section 4999,
 
whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Code Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of Payments, notwithstanding that all or some portion of such Payments may be taxable under Code Section 4999. If a reduction in the Payments constituting “parachute payments” is necessary so that no portion of such Payments is subject to the excise tax under Code Section 4999, the reduction will occur in the following order: (1) reduction of the cash severance payments, which will occur in reverse chronological order such that the cash payment owed on the latest date following the occurrence of the event triggering such excise tax will be the first cash payment to be reduce; (2) cancellation of accelerated vesting of equity awards which will occur in the reverse order of the date of grant for such stock awards (i.e., the vesting of the most recently granted stock awards will be reduced first); and (3) reduction of continued employee benefits, which will occur in reverse chronological order such that the benefit owed on the latest date following the occurrence of the event triggering such excise tax will be the first benefit to be reduced. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. Notwithstanding the foregoing, to the extent the Company submits any Payment to the Company’s shareholders for approval in accordance with Treasury Reg. Section 1.280G-1 Q&A 7, the foregoing provisions will not apply following such submission and such payments and benefits will be treated in accordance with the results of such vote, except that any reduction in, or waiver of, such payments or benefits required by such vote will be applied without any application of discretion by Executive and in the order prescribed by this section. In no event will Executive have any discretion with respect to the ordering of payment reductions.
  
A nationally recognized certified professional services firm selected by the Company, the Company’s legal counsel or such other person or entity to which the parties mutually agree (the “Firm”) will perform the foregoing calculations related to the excise tax. The Company will bear all expenses with respect to the determinations by the Firm required to be made hereunder. For purposes of making the calculations required by this Section, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section. The Firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company and Executive within 15 calendar days after the date on which Executive’s right to the severance benefits or other payments is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive. Any good faith determinations of the Firm made hereunder will be final, binding, and conclusive upon the Company and Executive. 
 
	 
	 -11-Exhibit 10.1

 

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This Subscription Agreement
(this “Agreement”) is being delivered to you in connection with your investment in ordinary shares, par value
USD$0.008 per share (the “Securities”) of China Ceramics Co., Ltd., a publicly-traded company organized under
the laws of the British Virgin Islands (the “Company”) in connection with the private placement of such Securities.
This Offering (as defined below) will continue until the earlier of: (i) January 31, 2020 or (ii) the Company’s receipt of
the purchase consideration for the Securities in the total amount of USD$500,000, unless extended without notice by the Company
for additional thirty (30) days (the “Termination Date”). All funds received in the Offering shall be, upon
fulfillment of the other conditions precedent set forth herein, delivered to the Company, at which time the Securities subscribed
for shall be delivered, subject to the terms and provisions hereof and as further described below, to the Investor.

 

1.             Subscription and Purchase Price

 

(a)        Subscription.
Subject to the conditions set forth in Section 2 hereof, the undersigned hereby subscribes for and agrees to purchase the
number of Securities indicated above on the terms and conditions described herein. The principal amount of the Securities purchased
is USD$[_], which purchase price may be paid in accordance with payment instructions set forth in Schedule I. The Company
and the Investor understand and agree that in order for the Company to remain in compliance with the Nasdaq Stock Market continued
listing requirements, the total number of Securities which may be sold by the Company in this Offering (as defined below) shall
not exceed in the aggregate 19.99% of the number of the Company’s ordinary shares issued and outstanding as of the date of
the Closing (as defined below).

 

Subscriptions for lesser
amounts may be accepted at the discretion of the Company. The Company may accept this Subscription Agreement at any time for all
or any portion of the Securities subscribed for by executing a copy hereof as provided and notifying me within a reasonable time
thereafter. In the event of the rejection of this subscription, the Investor’s subscription payment will be promptly returned
to him, her or it without interest or deduction and this Subscription Agreement shall have no force or effect.

 

    1

     

    

 

(b)        Purchase
of Securities. The undersigned understands and acknowledges that the purchase price to be remitted to the Company in exchange
for the Securities shall be USD$[_] for an aggregate purchase price as set forth on Page 10 hereof (the “Purchase Price”).
The undersigned understands and agrees that, subject to Section 2 hereof and applicable laws, by executing this Agreement,
he, she or it is entering into a binding agreement.

 

2.             Acceptance, Offering Term and Closing Procedures

 

(a)       Acceptance
or Rejection. The obligation of the undersigned to purchase the Securities shall, subject to the investor accreditation process,
applicable securities laws and the closing conditions contained in this Section, be irrevocable and the undersigned shall be legally
bound to purchase the Securities subject to the terms set forth in this Agreement.

 

(b)       Closing.
The closing (“Closing”) of this offering may occur any time and from time to time before the Termination Date.
There is no minimum offering. The Securities subscribed for herein shall not be deemed issued to or owned by me until one copy
of this Subscription Agreement has been executed by the Investors and countersigned by the Company and the Closing with respect
to such Securities has occurred. The Investor understands and acknowledges that (i) no fees or commission are paid in connection
with the purchase of the Securities, and (ii) the Company will utilize the proceeds of this purchase for general corporate and
working capital purposes.

 

3.             Investor’s Representations and Warranties

 

The undersigned hereby
acknowledges, agrees with and represents and warrants to the Company, as follows:

 

(a)        Because
this Offering is limited to accredited investors as defined in Section 2(15) of the Securities Act, and Rule 501 promulgated thereunder,
in reliance upon the exemption contained in Section 4(2) of the Securities Act and applicable state securities laws, the Investor
understands that the Securities are being sold without registration under the Securities Act. The Investor has received and reviewed
all information and materials regarding the Company that he, she or it has requested, including, without limitation, all reports
and other filings made by the Company with the Securities and Exchange Commission (the “SEC”) that are available
through EDGAR at the SEC’s website (www.sec.gov), including, but not limited to: (i) the Company’s Annual Report on
Form 20-F for the year ended December 31, 2016, (ii) the Company’s GAAP financial information contained in Exhibit 99.1 of
the Company’s Current Reports on Form 6-K furnished to the Commission on September 25, 2019, (iii) the Company’s Current
Reports on Form 6-K furnished to the Commission on June 17, July 17, and November 11, 2019, respectively, with any amendments to
any of the foregoing, as well as the risk factors relating to the Company and purchase of the Securities set forth in the Company’s
publicly available filings, all of which documents are set forth in Schedule II to this agreement.

 

(b)       The
undersigned has full power and authority to enter into and deliver this Agreement and to perform the obligations hereunder, and
the execution, delivery and performance of this Agreement has been duly authorized, if applicable, and this Agreement constitutes
a valid and legally binding obligation of the undersigned.

 

(c)       The undersigned
acknowledges his, her or its understanding that the offering and sale of the Securities is intended to be exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) of the Securities
Act and the provisions of Regulation D promulgated thereunder (“Regulation D”). In furtherance thereof, the
undersigned represents and warrants to the Company as follows:

 

    2

     

    

 

(i)        The undersigned
realizes that the basis for the exemption from registration may not be available if, notwithstanding the undersigned’s representations
contained herein, the undersigned is merely acquiring the Securities for a fixed or determinable period in the future, or for a
market rise, or for sale if the market does not rise. The undersigned does not have any such intention.

 

(ii)        The
undersigned is acquiring the Securities solely for the undersigned’s own beneficial account, for investment purposes, and
not with view to, or resale in connection with, any distribution of the Securities.

 

(iii)       The
undersigned has the financial ability to bear the economic risk of his, her or its investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with respect to the investment in the Company.

 

(iv)      The
undersigned and the undersigned’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
 “Advisors”), have received, carefully reviewed and understand the information contained in various documents
and agreements provided by the Company, together with all appendices and exhibits thereto (as such documents may be amended or
supplemented, the “Transaction Documents”), relating to the Offering.

 

(v)        The undersigned
(together with his, her or its Advisors, if any) has such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of the prospective investment in the Securities. If other than an individual, the undersigned
also represents it has not been organized solely for the purpose of acquiring the Securities.

 

(d)        The information
in the Confidential Investor Questionnaire attached hereto as Exhibit A and completed and executed by the undersigned is
true and accurate in all respects, and the undersigned is an “accredited investor,” as that term is defined in Rule
501(a) of Regulation D.

 

(e)        The undersigned
is not relying on the Company or its affiliates or agents with respect to economic considerations involved in this investment.
The undersigned has relied on the advice of, or has consulted with, only his, her or its Advisors. Each Advisor, if any, is capable
of evaluating the merits and risks of an investment in the Securities, and each Advisor, if any, has disclosed to the undersigned
in writing (a copy of which is annexed to this Agreement) the specific details of any and all past, present or future relationships,
actual or contemplated, between the Advisor or any affiliate or sub-agent thereof.

 

(f)         The undersigned
represents, warrants and agrees that he, she or it will not sell or otherwise transfer the Securities without registration under
the Securities Act or an exemption therefrom, and fully understands and agrees that the undersigned must bear the economic risk
of his, her or its purchase because, among other reasons, the Securities have not been registered under the Securities Act or under
the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently
registered under the Securities Act and under the applicable securities laws of such states, or an exemption from such registration
is available. In particular, the undersigned is aware that the Securities are “restricted securities,” as such term
is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold pursuant
to Rule 144 unless all of the conditions of Rule 144 are met. The undersigned understands that any sales or transfers of the Securities
are further restricted by state securities laws and the provisions of this Agreement.

 

(g)       The
undersigned understands and agrees that the certificates for the Securities shall bear substantially the following legend until
(i) the Securities shall have been registered under the Securities Act and effectively disposed of in accordance with a registration
statement that has been declared effective or (ii) in the opinion of counsel for the Company, the Securities may be sold without
registration under the Securities Act, as well as any applicable “blue sky” or state securities laws:

 

    3

     

    

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

 

(h)        No representations
or warranties have been made to the undersigned by the Company or any of its respective officers, employees, counsel, agents, sub-agents,
affiliates or subsidiaries, other than any representations of the Company contained in the transaction agreements in connection
with the Offering, and in subscribing for the Securities the undersigned is not relying upon any representations other than those
contained in the transaction agreements in connection with the Offering.

 

(i)         The undersigned
understands and acknowledges that his, her or its purchase of the Securities is a speculative investment that involves a high degree
of risk and the potential loss of the undersigned’s entire investment and has carefully read and considered the matters set
forth in the agreements in connection with the Offering, and, in particular, acknowledges that the Company has a limited operating
history.

 

(j)         The undersigned’s
overall commitment to investments that are not readily marketable is not disproportionate to the undersigned’s net worth,
and an investment in the Securities will not cause such overall commitment to become excessive.

 

(k)        Neither the
SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering or confirmed
the accuracy or determined the adequacy of the in the agreements in connection with the Offering. The agreements in connection
with the Offering have not been reviewed by any federal, state or other regulatory authority. Any representation to the contrary
is a crime.

 

(l)         The undersigned
and his, her or its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the offering of the Securities and the business, financial condition, results
of operations and prospects of the Company, and all such questions have been answered to the full satisfaction of the undersigned
and his, her or its Advisors, if any. The undersigned believes that the investment in the Securities is suitable for him, her or
it based upon his, her or its investment objectives and financial needs, and he, she or it has adequate means for providing for
his, her or its current financial needs and contingencies and have no need for liquidity with respect to such investment in the
Company.

 

(m)       The
undersigned is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a
result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement
or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic
mail over the Internet, in connection with the offering and sale of the Securities and is not subscribing for Securities and did
not become aware of the offering of the Securities through or as a result of any seminar or meeting to which the undersigned was
invited by, or any solicitation of a subscription by, a person not previously known to the undersigned in connection with investments
in securities generally.

 

(n)        The undersigned
has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating
to this Agreement or the transactions contemplated hereby.

 

    4

     

    

 

(o)        The undersigned
is not relying on the Company or any of its respective employees, agents or sub-agents with respect to the legal, tax, economic
and related considerations of an investment in the Securities, and the undersigned has relied on the advice of, or has consulted
with, only his, her or its own Advisors.

 

(p)        The undersigned
acknowledges that any estimates or forward-looking statements or projections included in the Transaction Documents were prepared
by the future management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking
statements cannot be guaranteed by the Company or its respective management and should not be relied upon.

 

(q)        No oral or
written representations have been made, or oral or written information furnished, to the undersigned or his, her or its Advisors,
if any, in connection with the offering of the Securities which are in any way inconsistent with the information contained in the
agreements in connection with the Offering.

 

(r)         The
Investor is an “accredited investor” as defined in Section 2(15) of the Securities Act and in Rule 501 promulgated
thereunder and have attached the completed Confidential Investor Questionnaire to indicate an appropriate “accredited investor”
category. The Investor can bear the entire economic risk of the investment in the Securities for an indefinite period of time and
is knowledgeable about and experienced in investments in the equity securities of early stage publicly traded companies. The Investor
is not acting as an underwriter or a conduit for sale to the public or to others of unregistered securities, directly or indirectly,
on behalf of the Company or any person with respect to such securities.

 

(s)        The
Investor is not a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”); the Investor is not
and has not, for a period of 12 months prior to the date of this Subscription Agreement, been affiliated or associated with any
company, firm, or other entity which is a member of FINRA; and the Investor does not own any stock or other interest in any member
of FINRA (other than interests acquired in open market purchases).

 

(t)         The
information contained in the Confidential Investor Questionnaire, as well as any information which the Investor has furnished to
the Company with respect to his, her or its financial position and business experience, is correct and complete as of the date
of this Subscription Agreement and, if there should be any material change in such information prior to the Closing of the offering,
the Investor will furnish such revised or corrected information to the Company.

 

4.             Registration Rights

 

No
later than 270 days following the Closing, the Company shall file with the SEC, a registration statement (the “Resale
Registration Statement”) covering the resale to the public by the Investors of the Securities purchased in this Offering
(the “Registrable Securities”). Notwithstanding the foregoing, if the SEC informs the Company that any of the
Registrable Securities to be covered by the Resale Registration Statement cannot, as a result of the application of Rule 415 of
the Securities Act, be registered for resale as a secondary offering on a single registration statement, the number of Registrable
Securities to be covered by the Resale Registration Statement shall be reduced by such number of shares (if any) as may be required
by the SEC (the “Reduction Securities”), and in such event, the Company shall file a subsequent registration
statement, as described above, as soon as practicable thereafter covering the Reduction Securities (the “Reduction Securities
Registration Statement”). The Company shall use its best commercially reasonable efforts to cause the Resale Registration
Statement and the Reduction Securities Registration Statement, if any, to be declared effective by the SEC as soon as practicable
after their respective initial filing dates and shall cause the Resale Registration Statement and the Reduction Securities Registration
Statement, if any, to remain effective for at least twelve (12) months. All fees, costs and expenses of and incidental to any such
registration, including, without limitation, all registration, filing, and FINRA fees, printing expenses, fees and disbursements
of counsel and accountants for the Company shall be paid by the Company. Fees and disbursements of counsel and accountants for
the holders of Registrable Securities and any other expenses incurred by such holders not expressly included above shall be borne
by such holders.

 

    5

     

    

 

If
Registrable Securities held by or issuable to any holder of Registrable Securities are included in a registration pursuant to the
provisions of this Section, each such holder of Registrable Securities will, severally and not jointly, indemnify and hold harmless
the Company, its directors and officers, any controlling person and any underwriter from and against, and will reimburse the Company,
its directors and officers, any controlling person and any underwriter with respect to, any and all loss, damage, liability, cost
or expense to which parent or any controlling person and/or any underwriter may become subject under the Act or otherwise, insofar
as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or 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, in light of the circumstances in which they were made, 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 so made in reliance
upon and in strict conformity with written information furnished by or on behalf of such holder specifically for use in the preparation
thereof. The Company will indemnify and hold harmless each holder of Registrable Securities and such holder’s directors and
officers, managers and members, any controlling person and any underwriter (collectively, “Holder Indemnitees”)
from and against, and will reimburse such Holder Indemnitees with respect to, any and all loss, damage, liability, cost or expense
to which any such Holder Indemnitee may become subject under the Act or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by (i) any untrue statement or alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement thereto, or 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,
in light of the circumstances in which they were made, not misleading, and (ii) any violation by the Company of any federal, state
or common law rule or regulation applicable to the Company and relating to any action or inaction required of the Company in connection
with any such registration; provided that the Company will not be liable under this Section in any such case to the extent, but
only to the extent, that any such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by or on behalf of such holder specifically for use in the preparation
of such registration statement.

 

5.             Insider Trading Prohibition

 

Until the filing by
the Company of a Current Report on Form 6-K describing, among other things, the Offering, the undersigned hereby agrees to refrain
from (A) engaging in any transactions with respect to the capital stock of the Company or securities exercisable or convertible
into or exchangeable for any shares of capital stock of the Company, and (B) entering into any transaction which would have the
same effect, or entering into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences
of ownership of the capital stock of the Company.

 

6.             Indemnification.

 

The
Investor hereby agrees to indemnify and hold harmless the Company and its officers, directors, stockholders, employees, agents,
and counsel against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses,
including reasonable attorneys’ fees) incurred by each such person in connection with defending or investigating any such
claims or liabilities, whether or not resulting in any liability to such person, to which any such indemnified party may become
subject under the Securities Act, under any other statute, at common law or otherwise, insofar as such losses, claims, demands,
liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact
made by me and contained in this Subscription Agreement or Confidential Investor Questionnaire, or (b) arise out of or are based
upon any breach by the Investor of any representation, warranty, or agreement made by the Investor contained herein or therein..

 

    6

     

    

 

7.             Notices to Subscribers

 

THE SECURITIES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON
OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTATION. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.

 

IN MAKING AN INVESTMENT
DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION
OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THE
OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND THE APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE MADE AWARE THAT THEY ARE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

THE PRESENCE OF A LEGEND
FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE
MAY BE MADE IN ANY PARTICULAR STATE. THE OFFERING DOCUMENTS MAY BE SUPPLEMENTED BY ADDITIONAL STATE LEGENDS. IF YOU ARE UNCERTAIN
AS TO WHETHER OR NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE ADVISED TO CONTACT THE COMPANY FOR A CURRENT
LIST OF STATES IN WHICH OFFERS OR SALES MAY BE LAWFULLY MADE. AN INVESTMENT IN THIS OFFERING IS SPECULATIVE AND INVOLVES A HIGH
DEGREE OF FINANCIAL RISK. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD CONSIDER ALL OF THE RISK FACTORS DESCRIBED HEREIN.

 

8.             Miscellaneous
Provisions

 

(a)        Confidential
Information. The subscriber agrees that no portion of the Confidential Information (as defined below) shall be disclosed to
third parties, except as may be required by law, without the prior express written consent of the Company; provided, however,
that the subscriber may share such information with such of its officers and professional advisors as may need to know such information
to assist the subscriber in its evaluation thereof on the condition that such parties agree to be bound by the terms hereof. “Confidential
Information” means the existence and terms of this Agreement, the transactions contemplated hereby, and the disclosures
and other information contained herein or in the agreements in connection with the Offering, excluding any disclosures or other
information that are publicly available.

 

(b)        Modification.
Neither this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument
in writing signed by the party against whom any waiver, modification, discharge or termination is sought.

 

(c)        Survival.
The undersigned’s representations and warranties made in this Agreement shall survive the execution and delivery of this
Agreement and the delivery of the Securities.

 

    7

     

    

 

(d)        Notices.
Any party may send any notice, request, demand, claim or other communication hereunder to the undersigned at the address set forth
on the signature page of this Agreement or to the Company at the address set forth above using any means (including personal delivery,
expedited courier, messenger service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other
communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party
may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving
the other parties written notice in the manner herein set forth.

 

(e)        Binding
Effect. Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties
to this Agreement and their heirs, executors, administrators, successors, legal representatives and permitted assigns. If the undersigned
is more than one person or entity, the obligation of the undersigned shall be joint and several and the agreements, representations,
warranties and acknowledgments contained herein shall be deemed to be made by, and be binding upon, each such person or entity
and his or its heirs, executors, administrators, successors, legal representatives and permitted assigns. This Agreement sets forth
the entire agreement and understanding between the parties as to the subject matter thereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them, as to the subject matter hereof.

 

(f)         Assignability.
This Agreement is not transferable or assignable by the undersigned.

 

(g)        Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law principles.

 

(h)        Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

 (i)        Further
Assurances. Each of the parties shall execute such documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with,
any governmental authority or any other person) as may be reasonably required or desirable to carry out or to perform the provisions
of this Agreement.

 

 (j)        Severability.
If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining provisions hereof.

 

[Remainder of page left intentionally
blank - signature pages follow]

 

    8

     

    

 

Signature Page to the Subscription Agreement

 

ALL SUBSCRIBERS MUST COMPLETE THIS PAGE

 

IN WITNESS WHEREOF, the undersigned has
executed this Agreement on the _ day of _ 2020.

 

 

	________________________	x $____ 	= $_____________________
	Securities subscribed for	 	     Aggregate Purchase Price

 

 

Manner in which title is to be held (please check one):

 

	1.	 ̈	Individual	7.	 ̈	
        Trust/Estate/Pension or Profit sharing Plan

        Date Opened:______________

	2.	 ̈	Joint Tenants with Right of Survivorship	8.	 ̈	
        As a Custodian for

        ________________________________

        Under the Uniform Gift to Minors Act of the State of

        ________________________________

	3.	 ̈	Community Property	9.	 ̈	Married with Separate Property
	4.	 ̈	Tenants in Common	10.	 ̈	Keogh
	5.	 ̈	Corporation/Partnership/ Limited Liability Company	11.	 ̈	Tenants by the Entirety
	6.	 ̈	IRA	 	 	 

 

IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER
MUST SIGN.

INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGE
11.

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE
PAGE 12.

 

    9

     

    

 

EXECUTION BY NATURAL PERSONS

 

	
        _____________________________________________________________________________

        Exact Name in Which Title is to be Held

	 	 	 
	
        _________________________________

         Name (Please Print)
	 	
        _________________________________

         Name of Additional Purchaser

	 	 	 
	
        _________________________________

         Residence: Number and Street
	 	
        _________________________________

         Address of Additional Purchaser

	 	 	 
	
        _________________________________

         City, State and Zip Code
	 	
        _________________________________

         City, State and Zip Code

	 	 	 
	
        _________________________________

         Social Security Number
	 	
        _________________________________

          Social Security Number

	 	 	 
	
        _________________________________

        Telephone Number
	 	
        _________________________________

        Telephone Number

	 	 	 
	
        _________________________________

        Fax Number (if available)
	 	
        ________________________________

        Fax Number (if available)

	 	 	 
	
        _________________________________

        E-Mail (if available)
	 	
        ________________________________

        E-Mail (if available)

	 	 	 
	
        __________________________________

         (Signature)
	 	
        ________________________________

         (Signature of Additional Purchaser)

	
         

        ACCEPTED this __ day of _________ 2020, on behalf of the Company.

 

	 	By:	
	 	 	Name:  
	 	 	Title:

 

    10

     

    

 

EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY

(Corporation, Partnership, LLC, Trust, Etc.)

 

	
        _____________________________________________________________________________

        Name of Entity (Please Print)

	 
	Date of Incorporation or Organization: ____________________________________________
	 
	State of Principal Office: _______________________________________________________
	 
	
        Federal Taxpayer Identification Number:  ___________________________________________

         

        ____________________________________________

        Office Address

         

        ____________________________________________

        City, State and Zip Code

         

        ____________________________________________

        Telephone Number

         

        ____________________________________________

        Fax Number (if available)

         

        ____________________________________________

        E-Mail (if available)

        

	 	 

 

	By:	 	 	 
	 	Name:	 	
	 	Title:	 	

 

ACCEPTED this ___ day of _________ 2020, on behalf of the Company.

 

	 	By:	 
		 	Name:
	 	 	Title:

 

    11

     

    

 

Exhibit A

 

CONFIDENTIAL INVESTOR QUESTIONNAIRE

 

    12

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