Document:

Exhibit 10.13

 

STOCK PURCHASE AGREEMENT

 

 

by and between

 

VALLON PHARMACEUTICALS, INC.

 

and

 

SALMON PHARMA GMBH

 

 

 

Dated as of July 25, 2019

 

     

     

    

 

Stock Purchase Agreement

 

This Stock Purchase Agreement (this “Agreement”)
is made and entered into as of July 25, 2019, by and between Vallon Pharmaceuticals, Inc., a Delaware corporation registered
with the Delaware Division of Corporations, file no. 6705195 (the “Company”), and Salmon Pharma GmbH,
a Swiss limited liability company registered with the Commercial Registry of Basel-City, no. CH-270.4.000.379-3 (the “Investor”).

 

WHEREAS, the Company desires to sell
to the Investor, and the Investor desire to purchase from the Company, 52,394,425 shares (the “Securities”)
of the Company’s common stock, par value US$0.0001 per share (the “Common Stock”), subject to the
terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration
of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree
as follows:

 

1.             Definitions.
As used in this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings specified
or referred to in this Section 1:

 

“Affiliate” means,
when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified. For purposes of this definition, “control,”
when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise. The terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

“Company Intellectual Property”
means all patents, patent applications , registered and unregistered trademarks, trademark applications, registered and unregistered
service marks, service mark applications, tradenames, copyrights, trade secrets, domain names, information and proprietary rights
and processes, similar or other intellectual property rights, subject matter of any of the foregoing, tangible embodiments of any
of the foregoing, licenses in, to and under any of the foregoing, and any and all such cases as are necessary to the Company in
the conduct of the Company’s business as now conducted and as presently proposed to be conducted.

 

“Court Order”
means any judgment, order, award or decree of any foreign, federal, state, local or other court or administrative or regulatory
body and any award in any arbitration proceeding.

 

“Encumbrance”
means any lien (statutory or other), encumbrance, claim, charge, security interest, mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale or other title retention agreement, preference, priority or other security agreement or preferential
arrangement of any kind or nature, and any easement, encroachment, covenant, restriction, right of way, defect in title or other
encumbrance of any kind.

 

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“Investors’ Rights Agreement”
means the investors’ rights agreement as of even date herewith, in a form mutually agreed upon between the Company and the
Investor.

 

“Governmental Body”
means any foreign, federal, state, local or other government, governmental, statutory or administrative authority or regulatory
body, self-regulatory organization or any court, tribunal or judicial or arbitral body.

 

“Key Employee”
means any executive-level employee as well as any employee or consultant who either alone or in concert with others develops, invents,
programs or designs any Company Intellectual Property.

 

“Person” means
any individual, partnership, corporation, limited liability company, association, joint venture, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.

 

“Requirements of Law”
means any applicable foreign, federal, state and local laws, statutes, regulations, rules, codes, ordinances, Court Orders and
requirements enacted, adopted, issued or promulgated by any Governmental Body or common law or any applicable consent decree or
settlement agreement entered into with any Governmental Body.

 

“Voting Agreement”
means that certain voting agreement among the Company and certain other stockholders of the Company, dated as of June 22, 2018.

 

2.            
Subscription. Subject to the terms and conditions hereof, the Investor hereby irrevocably subscribes for the
Securities for the aggregate purchase price of $5,000,000.00 (US$ Five Million) (the “Purchase Price”),
which is payable as described in Section 3. The Investor acknowledges that the Securities will be subject to restrictions
on transfer as set forth in this Agreement.

 

3.             Closing.
The closing of the transactions contemplated hereby (the “Closing”) shall occur on the date hereof;
or at such other time and date to be agreed between the Company and the Investor (such date and time of delivery and payment for
the Securities being herein called, the “Closing Date”). At the Closing, the Company shall deliver to
the Investor the Securities being purchased by the Investor at such Closing against payment of the Purchase Price therefor by
check payable to the Company, by wire transfer to a bank account designated by the Company, by cancellation or conversion of indebtedness
of the Company to Investor, including interest, or by any combination of such methods

 

4.             Representations and Warranties of the Company. As of the Closing Date, the Company represents and warrants
that:

 

(a)              
Organization. The Company is duly incorporated or formed and validly existing and in good standing under the law
of its jurisdiction of incorporation or formation. The Company is duly qualified and in good standing as a foreign company in each
other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to be so qualified or
licensed, except where the failure to be so qualified and in good standing would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the business, properties, financial condition, results of operations,
or prospects of the Company (a “Material Adverse Effect”).

 

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(b)              Authorization.
The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder
in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company have been duly authorized
by all necessary corporate action. This Agreement has been duly executed and delivered by the Company, and this Agreement constitutes
the legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to
or affecting the enforcement of creditors’ rights generally and by general equitable principles.

 

(c)              
No Violation; Consents and Approvals. The execution and delivery by the Company of this Agreement does not, and the
consummation by the Company of any of the transactions contemplated hereby and compliance by the Company with the terms, conditions
and provisions hereof (including the offer and sale of the Securities by the Company) will not:

 

(i)                
conflict with, violate, result (with the giving of notice or passage of time or both) in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event creating rights of acceleration, termination or cancellation
or a loss of rights under, or result in the creation or imposition of any Encumbrance upon any of the assets or properties of the
Company under (A) the certificate of incorporation or certificate of formation or the by-laws or limited liability company agreement,
each as applicable, of the Company, (B) any note, instrument, agreement, contract, mortgage, lease, license, franchise, guarantee,
permit or other authorization, right, restriction or obligation to which the Company is a party or any of their respective assets
or properties is subject or by which the Company is bound, (C) any Court Order to which the Company is a party or any of their
respective assets or properties is subject or by which the Company is bound, or (D) any Requirements of Law applicable to the Company
or any of their respective assets or properties; or

 

(ii)               
require the approval, consent, authorization or act of, or the making by the Company of any declaration, filing or registration
with, any Person, including under the Securities Act, or the securities, “blue sky” or other similar laws of any state
(collectively referred to as the “State Securities Laws”), and the filing of a notice of an exempt offering
on Form D for the transactions contemplated by this Agreement.

 

(d)              
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of two hundred fifty
million (250,000,000) shares of Common Stock, of which 112,500,001 shares were issued and outstanding as of the date hereof. Schedule
I attached hereto sets forth the capitalization of the Company immediately following the Closing including the number of shares
of the following: (i) issued and outstanding Common Stock; (ii) granted stock options; and (iii) shares of Common
Stock reserved for future award grants under the Stock Plan. All outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable. The Securities will be duly authorized, and when issued in
accordance with this Agreement, (i) will be validly issued, fully paid and non-assessable and will be free and clear of any Encumbrances
(other than, with respect to the Investor, any Encumbrances created by or through the Investor and restrictions on transfer imposed
by the Securities Act, and applicable State Securities Laws) and the Investor will have good title thereto and (ii) will not have
been issued in violation of any preemptive or subscription rights and will not result in the anti-dilution provisions of any security
of the Company becoming applicable.

 

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(e)              
Compliance with Laws. The Company is in compliance with all laws and regulatory requirements to which it is subject,
including U.S. sanctions laws and the Foreign Corrupt Practices Act, 15 U.S.C. §78 et seq., as it may be amended from time
to time, except for such non-compliance that could not reasonably be expected to have a Material Adverse Effect.

 

(f)               
Private Offering. No form of general solicitation or general advertising was used by the Company, or to the knowledge
of the Company, its authorized representatives, in connection with the offer or sale of the Securities to be issued under this
Agreement. Assuming the accuracy of the representations and warranties of the Investor contained in Section 5, the issuance
and sale of the Securities pursuant to this Agreement is exempt from the registration requirements of the Securities Act, and neither
the Company nor, to the knowledge of the Company, any authorized representative acting on its behalf has taken or will take any
action hereafter that would cause the loss of such exemption. The Company agrees that neither it, nor, anyone authorized to act
on its behalf, shall offer to sell the Securities to be issued under this Agreement or any other securities of the Company so as
to require the registration of the Securities being offered hereby pursuant to the provisions of the Securities Act or any State
Securities Laws, unless the offer and sale of the Securities to be issued under this Agreement or such other securities is so registered.
Neither the Company nor to its knowledge any Affiliate of the Company, directly or indirectly through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of any security that is or will be integrated with the sale
of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

(g)              
No Restrictions on Common Stock. Other than shares of Common Stock or options issued to employees or directors of,
or consultants or advisors to, the Company pursuant to a plan, agreement or arrangement approved by the Board, (i) no Person has
the right, contractual or otherwise, to cause the Company to issue or sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company and (ii) no Person has any purchase option, call option, preemptive rights,
resale rights, subscription rights, rights of first refusal or other rights to purchase any shares of Common Stock or shares of
any other capital stock of or other equity interests in the Company.

 

(h)              
Investment Company; Passive Foreign Investment Company. The Company is not and, after giving effect to the offer
and sale of the Securities will not be an “investment company,” required to register under the Investment Company Act
of 1940, as amended. The Company does not believe that it is a “passive foreign investment company” as such term is
defined in the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder (the “Code”).

 

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(i)             Litigation.
The Company is not subject to any litigation or aware of any impeding litigation.

 

(j)             Intellectual Property. The Company owns or possesses or believes it can acquire on commercially reasonable terms
sufficient legal rights to all Company Intellectual Property without any known conflict with, or infringement of, the rights of
others, including prior employees or consultants. To the Company’s knowledge, no product or service marketed or sold (or
proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any intellectual
property rights of any other party. Each employee and consultant has assigned to the Company all intellectual property rights he
or she owns that are related to the Company’s business as now conducted and as presently proposed to be conducted and all
intellectual property rights that he, she or it solely or jointly conceived, reduced to practice, developed or made during the
period of his, her or its employment or consulting relationship with the Company that (a) relate, at the time of conception, reduction
to practice, development, or making of such intellectual property right, to the Company’s business as then conducted or as
then proposed to be conducted, (b) were developed on any amount of the Company’s time or with the use of any of the Company’s
equipment, supplies, facilities or information or (c) resulted from the performance of services for the Company.

 

(k)            Employee
Matters.

 

(i)                
To the Company’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency,
that would materially interfere with such employee’s ability to promote the interest of the Company or that would conflict
with the Company’s business. Neither the execution or delivery of this Agreements, nor the carrying on of the Company’s
business by the employees of the Company, nor the conduct of the Company’s business as now conducted and as presently proposed
to be conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions, or provisions
of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated.

 

(ii)             
  To the Company’s knowledge, no Key Employee intends to terminate employment with the Company or is otherwise likely
to become unavailable to continue as a Key Employee. The Company does not have a present intention to terminate the employment
of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company.

 

(l)             Asset
Purchase Agreement. The Company has fulfilled its obligations under the Asset Purchase Agreement (the “APA”)
with Arcturus Therapeutics Ltd. (f/k/a Alcobra Ltd.) and Ameriservice Development Ltd. in all material respects. The Company holds
all rights to the assets subject to the APA and such assets are not subject to any Encumbrance.

 

5.             Representations and Warranties of the Investor. As an inducement to the Company to enter into this Agreement
and to consummate the transactions contemplated hereby, the Investor represents and warrants, as of the date hereof and as of the
Closing Date, as follows:

 

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(a)           Organization.
The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

 

(b)           Authorization. The Investor has full power and authority to execute and deliver this Agreement and to perform its
obligations hereunder in accordance with the terms hereof. This Agreement has been, and at or prior to the Closing will have been,
duly executed and delivered by the Investor, and constitutes the legal, valid and binding obligation of the Investor, enforceable
against the Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting the enforcement of creditors’ rights
generally and by general equitable principles.

 

(c)            No
Consents Required. No approval, authorization, consent or order of or filing with any federal, state, local or foreign government
or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization, or other non-governmental
regulatory authority (including any national securities exchange), is required in connection with the execution, delivery and
performance of this Agreement by the Investor or the consummation by the Investor of the transactions contemplated hereby, except
for such approvals, authorizations, consents, orders or filings that have been obtained or made and are in full force and effect.

 

(d)           No
Violation. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated
hereby will not conflict with, result in any breach or violation of or constitute a default under (or constitute any event which
with notice, lapse of time or both would result in any breach or violation of or constitute a default under or give the holder
of any indebtedness (or a Person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment
of all or a part of such indebtedness under) (or result in the termination of, or in the creation or imposition of a lien, charge
or Encumbrance on any property or assets of the Investor pursuant to) (i) the organizational or other governing documents of the
Investor, (ii) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Investor is a party or by which the Investor or any of
its properties may be bound or affected, (iii) any federal, state, local or foreign law, regulation or rule, (iv) any rule or
regulation of any self-regulatory organization or other non-governmental regulatory authority (including any national securities
exchange) or (v) any Court Order applicable to the Investor or any of its properties, except in the case of the foregoing clauses
(ii), (iii), (iv) and (v) as would not individually or in the aggregate, materially and adversely affect the Investor’s
ability to perform its obligations under this Agreement or consummate the transactions contemplated herein on a timely basis.

 

(e)            Financial
Capability. The Investor has available funds necessary to consummate the Closing on the terms and conditions contemplated
by this Agreement.

 

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(f)            Accredited
Investor and Qualified Institutional Buyer.

 

(i)                 The
Investor is acquiring the Securities to be issued under this Agreement to the Investor for its own account, not as nominee or
agent, with the present intention of holding such securities for purposes of investment, and not with the view to the public resale
or distribution of any part thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the U.S. federal securities laws or any applicable State Securities Laws. The Investor is
purchasing and holding any purchased Securities for its own account and is not party to any co-investment, joint venture, partnership
or other understandings or arrangements with any other party relating to the Securities or any other transactions contemplated
hereunder.

 

(ii)                [Reserved]

 

(iii)              The
Investor has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Company, and has so evaluated the merits and risks of such investment,
and understands that it may be required to bear the risks thereof. The Investor has previously invested in securities similar
to the Securities and fully understands the limitations on transfer and restrictions on sales of the Securities. The Investor
represents that it is able to bear the economic risk of its investment in the Securities and is able to afford the complete loss
of any such investment.

 

(iv)              The
Investor has conducted its own independent evaluation, made its own analysis and consulted with advisors as it has deemed necessary,
prudent, or advisable in order for the Investor to make its own determination and decision to enter into the transactions contemplated
by this Agreement and to execute and deliver this Agreement.

 

(v)               The Investor is familiar with the business and financial condition and operations of the Company. The Investor has had an
opportunity to discuss the terms and conditions of the offering of the Securities with the Company’s management to enable
it to evaluate the transactions contemplated by this Agreement and to make an informed investment decision concerning the Securities,
and the Investor has had the opportunity to obtain and review information reasonably requested by the Investor.

 

(vi)              The Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any
seminar or, to the Investor’s knowledge, any other general solicitation or general advertisement. Neither the Investor nor
its Affiliates or any person acting on its or any of their behalf has engaged, or will engage, in any form of general solicitation
or general advertising (within the meaning of Rule 502(c) under the Securities Act) in connection with the offering of the Securities.

 

(g)           Additional
Investor Status.

 

(i)                The
Investor is investing on its own account, and not on behalf of any other person.

 

(ii)               The
Investor is a person that is outside the United Kingdom;

 

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(h)           No
Broker’s Fees. No brokerage or finder’s fees or commissions are or will be payable by the Investor or any of its
Affiliates or subsidiaries (if applicable) to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the issuance of the Securities, and the Investor has not taken any action that could
cause the Company to be liable for any such fees or commissions. The Investor is not a broker-dealer registered with the SEC under
the Exchange Act or an entity engaged in a business that would require it to be so registered.

 

(i)            
Compliance with Law. The Investor will comply with all applicable laws and regulations in effect in any jurisdiction
in which the Investor purchases or sells Securities and obtain any consent, approval or permission required for such purchases
or sales under the laws and regulations of any jurisdiction to which the Investor is subject or in which the Investor makes such
purchases or sales, and the Company shall have no responsibility therefor.

 

(j)           
Advisors. The Investor acknowledges that, prior to entering into this Agreement, it was advised by Persons deemed
appropriate by the Investor concerning this Agreement and the transactions contemplated hereunder and conducted its own due diligence
investigation and made its own investment decision with respect to this Agreement, the transactions contemplated hereunder and
the purchase of the Securities.

 

(k)          
Arm’s Length Transaction. The Investor is acting solely in the capacity of an arm’s length contractual
counterparty to the Company with respect to the transactions contemplated hereby. Additionally, without derogating from or limiting
the representations and warranties of the Company, the Investor (A) is not relying on the Company for any legal, tax, investment,
accounting or regulatory advice; (B) has consulted with its own advisors concerning such matters; and (C) shall be responsible
for making its own independent investigation and appraisal of the transactions contemplated hereby.

 

(l)             No Further Reliance. The Investor acknowledges that it is not relying upon any representation or warranty made by
the Company that is not set forth in this Agreement. The Investor confirms that the Company has not (i) given any guarantee or
representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or
otherwise) of an investment in the Securities or (ii) made any representation to the Investor regarding the legality of an investment
in the Securities under applicable legal investment or similar laws or regulations. The Investor confirms that (i) it has conducted
a limited review and analysis of the business, assets, condition, operations and prospects of the Company, and the terms of the
Securities, and has access to such financial and other information regarding the Company, in each case that the Investor considers
sufficient for purposes of the purchase of the Securities; (ii) at a reasonable time prior to its purchase of the Securities, it
had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of
the Securities and to obtain additional information necessary to verify any information furnished to the Investor or to which the
Investor had access; and (iii) it has not received any offering memorandum or offering document in connection with the offering
of the Securities. The Investor acknowledges that the Company has the right in its sole and absolute discretion to abandon this
private placement at any time prior to the Closing Date.

 

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(m)        
Private Placement. The Investor understands and acknowledges that:

 

(i)              
The Securities that it is acquiring under this Agreement are being sold pursuant to an exemption from registration under
the Securities Act. The Company may require additional representations from the Investor in respect of matters under such exemption
from registration under the Securities Act, and the Investor shall provide the requested information to the Company on a timely
basis so that the Company may comply with the requirements thereunder.

 

(ii)             
Its representations and warranties contained herein are being relied upon by the Company as a basis for such exemption under
the Securities Act and under the securities laws of various other foreign and domestic jurisdictions. The Investor further understands
that, unless it notifies the Company in writing to the contrary at or before the date hereof or the Closing Date, as the case may
be, each of the Investor’s representations and warranties contained in this Agreement will be deemed to have been automatically
(and without any further action of the Investor) reaffirmed and confirmed as of the date hereof or the Closing Date, as applicable,
taking into account all information received by the Investor.

 

(iii)            
No U.S. state or federal agency or any other securities regulator of any state or country has passed upon the merits or
risks of an investment in the Securities or made any finding or determination as to the fairness of the terms of the offering of
the Securities or any recommendation or endorsement thereof.

 

(iv)            
The Securities are “restricted securities” under applicable federal securities laws and that the Securities
Act and the rules of the SEC provide in substance that the Investor may dispose of the Securities only pursuant to an effective
registration statement under the Securities Act or an exemption therefrom, and the Investor understands that the Company has no
obligation or intention to register any of the Securities, or, other than as contemplated herein, to take action so as to permit
sales pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the Investor understands that under the SEC’s
rules, the Investor may dispose of the Securities principally only in “private placements” that are exempt from registration
under the Securities Act, in which event the transferee will acquire “restricted securities” subject to the same limitations
as in the hands of the Investor. Consequently, the Investor understands that the Investor must bear the economic risks of the investment
in the Securities for an indefinite period of time. The Investor will not sell, assign, pledge, give, transfer or otherwise dispose
of the Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration
of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the
registration provisions of the Securities Act and all applicable State Securities Laws. The Investor understands that that the
recordation of the Securities in book-entry form will include a legend substantially in the form indicated in Section 6
(which the Investor has read and understands), and that the Company and its Affiliates shall not be required to give effect to
any purported transfer of such Securities except upon compliance with the foregoing restrictions.

 

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(n)         
No ERISA Plans.  Either (a) the Investor is not purchasing or holding Securities (or any interest in Securities)
with the assets of (i) an employee benefit plan that is subject to Title I of ERISA, (ii) a plan, individual retirement account
or other arrangement that is subject to Section 4975 of the Code, (iii) an entity whose underlying assets are considered to include
 “plan assets” of any of the foregoing by reason of such plan’s, account’s or arrangement’s investment
in such entity, or (iv) a governmental, church, non-U.S. or other plan that is subject to any similar laws; or (b) the purchase
and holding of such Securities by the Investors, throughout the period that it holds such Securities, and the disposition of such
Securities or an interest therein will not constitute (x) a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code, (y) a breach of fiduciary duty under ERISA or (z) a similar violation under any applicable similar laws.

 

6.           
Additional Agreements.

 

(a)         
Short Selling Acknowledgement and Agreement. The Investor understands and acknowledges that the SEC currently takes
the position that coverage of Short Sales of securities “against the box” prior to the effective date of a registration
statement is a violation of Section 5 of the Securities Act and of Securities Act Compliance Disclosure Interpretation 239.10.
The Investor agrees that it will abide by such interpretation and will not engage in any Short Sales that result in the disposition
of the Securities acquired hereunder by the Investor until such time as a resale registration statement is declared or deemed effective
by the SEC or such Securities are no longer subject to any restrictions on resale. “Short Sales” means
all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against
the box, and forward sale contracts, options, puts, calls, short sales, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements, and sales and other transactions through non-U.S. broker dealers or
foreign regulated brokers.

 

(b)         
Legend. The book-entry account maintained by the transfer agent evidencing ownership of the Securities sold pursuant
to this Agreement will bear the following restrictive legend in substantially the following form:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT,
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), OR (2)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.”

 

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7.           
Conditions to Obligations of the Company. The obligations of the Company to sell and issue the Securities
being sold and issued by it to the Investor on the Closing Date is subject to the fulfillment on or before the Closing Date of
the following conditions, any of which may be waived (in whole or in part) by the Company in its sole discretion:

 

(a)         
No Injunction. As of the Closing Date, no Governmental Body nor any other Person shall have issued an order, injunction,
judgment, decree, ruling or assessment which shall then be in effect restraining or prohibiting the completion of the transactions
contemplated by this Agreement, nor to the Company’s knowledge, shall any such order, injunction, judgment, decree, ruling
or assessment be threatened or pending.

 

(b)         
Securities Law Compliance. The offer and sale of the Securities to the Investor pursuant to this Agreement shall
be exempt from the registration requirements of the Securities Act and the registration and/or qualification requirements of all
applicable State Securities Laws.

 

(c)         
Purchase Price Paid. The Investor shall have paid the Purchase Price to the Company pursuant to the requirements
of this Agreement.

 

(d)         
Covenants and Agreements. The Investor shall have performed and complied with the covenants and agreements required
to be performed or complied with by the Investor hereunder on or prior to the Closing Date.

 

(e)         
Voting Agreement. The Investor shall have executed and delivered a joinder to the Voting Agreement.

 

(f)          
Investors’ Rights Agreement. The Investor shall have executed and delivered the Investors’ Rights Agreement.

 

(g)         
Representations and Warranties. The representations and the warranties of the Investor contained in this Agreement
shall be true and correct as of the Closing Date, with the same effect as though such representations and warranties had been made
on and as of such date.

 

8.           
Conditions to Obligations of the Investor. The obligation of the Investor to pay the Company the Purchase
Price in respect of the Securities to be issued under this Agreement to the Investor is subject to the fulfillment to the reasonable
satisfaction of, or, to the extent permitted by law, waiver by, the Investor prior to the Closing Date, as the case may be, each
of the following conditions:

 

(a)         
Covenants and Agreements. The Company shall have performed and complied in all material respects with the covenants
and agreements required to be performed or complied with by it hereunder on or prior to the Closing Date, as applicable.

 

(b)         
Representations and Warranties. The representations and the warranties of the Company contained in this Agreement
shall be true and correct in all material respects as of the Closing Date, except with respect to provisions including the terms
 “material,” “Material Adverse Effect” or words of similar import and except with respect to materiality,
as reflected under GAAP, and with respect to which such representations and warranties made as of the applicable date, such representations
and warranties shall be true and correct only as of such date.

 

    11 

     

    

 

(c)         
Voting Agreement. The Company shall have delivered an amendment to the Voting Agreement, providing for a board seat
designated by the Investor, in a form acceptable to the Investor on or prior to the Closing Date.

 

(d)         
Investors’ Rights Agreement. The Company shall have executed and delivered the Investors’ Rights Agreement.

 

9.           
Miscellaneous.

 

(a)         
Survival of Obligations. All representations, warranties, covenants, agreements and obligations contained in this
Agreement shall survive the Closing.

 

(b)         
Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed
given or delivered (i) when delivered personally, (ii) if transmitted by electronic mail when confirmation of transmission is received
by the sending party, (iii) if sent by registered or certified mail, postage prepaid, return receipt requested, on the third business
day after mailing, or (iv) if sent by reputable overnight courier when received; and shall be addressed to the Investor as set
forth on its respective signature pages and if to the Company as follows:

 

	 	If to the Company:	
        Vallon Pharmaceuticals, Inc.

        100 N. 18th Street, Suite 300

        Philadelphia, PA 19103

        Attention: David Baker, Chief Executive Officer

        Email: davidb@vallon-pharma.com

         

	 	with a copy to:	
        Thompson Hine LLP

        335 Madison Avenue

        12th Floor

        New York, New York 10017-4611

        Attention: Faith L. Charles

        Email: faith.charles@thompsonhine.com

         

	 	If to the Investor: 	To the address specified on signature page hereof or at such other address or addresses as may have been furnished to the Company in writing in accordance with this Agreement. 

 

Either party hereto may, from time to time,
change its address, e-mail address or other information for the purpose of notices to that party by giving notice specifying such
change to the other parties hereto.

 

(c)         
Execution in Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument, and shall become binding when
one or more counterparts have been signed by and delivered to each of the parties hereto.

 

    12 

     

    

 

(d)         
Amendments. This Agreement shall not be amended, modified or supplemented except by a written instrument signed by
all the parties hereto.

 

(e)         
Expenses. The Company shall pay all delivery expenses and stamp, transfer, issue, documentary and similar taxes,
assessments and charges levied under the laws of any applicable jurisdiction in connection with the issuance of the Securities
and will hold the Investor or other holders thereof harmless, without limitation as to time, against any and all liabilities with
respect to all such delivery expenses, taxes, assessments and charges. The Investor shall be responsible for the fees and expenses,
if any, of its advisors and its counsel.

 

(f)          
Waiver. Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by
the party entitled to the benefit thereof. Any such waiver shall be validly and sufficiently authorized for the purposes of this
Agreement if, as to either party, it is in writing signed by an authorized representative of such party. The failure or delay of
either party to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor
in any way to affect the validity of this Agreement or any part hereof or the right of either party thereafter to enforce each
and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

 

(g)         
Severability. Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and
valid under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of
such invalidity, illegality or unenforceability without invalidating the remainder of such invalid, illegal or unenforceable provision
or provisions or any other provisions hereof, unless such a construction would be unreasonable.

 

(h)         
Assignment; Successors and Assigns. Neither this Agreement nor any of the rights and obligations of either party
hereunder may be assigned, delegated or otherwise transferred by such party without the prior written consent of the other party;
provided, that the Investor may assign, in its sole discretion, any or all of its rights, interests and obligations under
this Agreement to any of its Affiliates. No such assignment, delegation or other transfer shall relieve the assignor of any of
its obligations or liabilities hereunder. This Agreement shall be binding upon and shall inure to the benefit of the parties and
their respective successors and permitted assigns.

 

(i)          
No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to
confer upon any third Person, other than the parties and their respective successors and assigns permitted by Section 9(h),
any right, remedy or claim under or by reason of this Agreement.

 

(j)          
Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State
of New York without regard to its conflict of laws principles.

 

    13 

     

    

 

(k)         
Submission to Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and
of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Investor
may otherwise have to bring any action or proceeding relating to this Agreement against the Company and its subsidiaries or their
respective properties in the courts of any jurisdiction or any right that the Company may otherwise have to bring any action or
proceeding relating to this Agreement against the Investor or its properties in the courts of any jurisdiction. Each party hereto
irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue
of any such proceeding brought in such a court referred to in the first sentence of this Section 9(k) and any claim that
any such proceeding brought in such a court has been brought in an inconvenient forum.

 

(l)          
Waiver of Jury Trial. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

(m)        
Public Announcements. The Investor shall not make any public announcements or otherwise communicate with the news
media with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the Company.
Notwithstanding the forgoing, the Investor may make or cause to be made any press release or similar public announcement or communication
as may be required to comply with (i) the requirements of applicable law, including the Exchange Act or (ii) its disclosure obligations
or practices with respect to its investors; provided that prior to making any such disclosure under this clause (ii), the
Investor shall provide a copy of such proposed disclosure to the Company and shall only publicly make such disclosure with the
consent of the Company, which consent shall not be unreasonably withheld or delayed, if the Company has not previously made a public
announcement of the transactions contemplated hereby.

 

    14 

     

    

 

(n)         
Entire Agreement. This Agreement and the documents delivered pursuant hereto and thereto constitute the entire agreement
and understanding among the parties with respect to the subject matter contained herein or therein, and supersede any and all prior
agreements, negotiations, discussions, understandings, term sheets or letters of intent between or among any of the parties with
respect to such subject matter.

 

(o)         
Interpretation.

 

In this Agreement, unless the context
clearly indicates otherwise:

 

(i)              
words used in the singular include the plural and words in the plural include the singular;

 

(ii)             
reference to any gender includes the other gender;

 

(iii)           
 the word “including” (and with correlative meaning “include”) means “including but not
limited to” or “including without limitation”;

 

(iv)            
the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar
import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;

 

(v)             
reference to any agreement, instrument or other document means such agreement, instrument or other document as amended,
supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;

 

(vi)            
reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated
thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance
or applicability;

 

(vii)           
relative to the determination of any period of time, “from” means “from and including,” “to”
means “to but excluding” and “through” means “through and including”; and

 

(viii)          
the titles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and
shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement.

 

(p)         
This Agreement was negotiated by the parties with the benefit of legal representation, and no rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against either party shall apply to any construction or interpretation
hereof. Subject to Section 9(g), this Agreement shall be interpreted and construed to the maximum extent possible so as
to uphold the enforceability of each of the terms and provisions hereof.

 

[SIGNATURE PAGES FOLLOW]

 

    15 

     

    

 

IN WITNESS WHEREOF, the
undersigned has executed this Agreement this ____25__ DAY OF
_______July___________, 2019.

 

	INVESTOR:

 

Salmon Pharma GmbH

 

	By:	 	 

Name:

Title:

 

Address:

 

State/Country of Domicile or Formation:

Purchase Price at US $0.095430 per share:

US$5,000,000.00 (US$ Five Million)

 

The offer to purchase Securities as set forth above
is confirmed and accepted by the Company as to 52,394,425 shares of Common Stock.

 

Signature Page to Stock Purchase
Agreement

 

     

     

    

 

IN WITNESS WHEREOF, the undersigned
has executed this Agreement this ____25th___ OF _______July___________, 2019.

 

	 	VALLON
        PHARMACEUTICALS,

        inc.

 

	 	By:	 

		Name: David
                                              Baker
	 	Title:
                                         Chief Executive Officer

 

Signature Page to Stock Purchase
Agreement

 

     

     

    

 

Schedule I

 

Capitalization Table

 

[Omitted pursuant to Item 601(a)(5)
of Regulation S-K]Exhibit 10.14

 

INVESTOR’S RIGHTS AGREEMENT

 

THIS INVESTOR’S
RIGHTS AGREEMENT (this “Agreement”), is made as of July 25, 2019, by and among Vallon Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), and Salmon Pharma GmbH, which is referred to in this Agreement
as the “Investor”.

 

RECITALS

 

WHEREAS, the
Investor and the Company hereby agree that this Agreement shall govern the rights of the Investor under certain circumstances
to cause the Company to register shares of Common Stock held by the Investor, to receive certain information from the Company,
to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement.

 

NOW, THEREFORE,
the parties hereby agree as follows:

 

1.            Definitions.
For purposes of this Agreement:

 

1.1            “Affiliate”
means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under
common control with such Person, including without limitation any general partner, managing member, officer, director or trustee
of such Person, or any venture capital fund or registered investment company now or hereafter existing that is controlled by one
or more general partners, managing members or investment adviser of, or shares the same management company or investment adviser
with, such Person.

 

1.2            “Board
of Directors” means the board of directors of the Company.

 

1.3            “Certificate
of Incorporation” means the Company’s Amended and Restated Certificate of Incorporation, as amended and/or restated
from time to time.

 

1.4            “Common
Stock” means shares of the Company’s common stock, par value $0.0001 per share.

 

1.5            “Competitor”
means a Person engaged, directly or indirectly (including through any partnership, limited liability company, corporation, joint
venture or similar arrangement (whether now existing or formed hereafter)), in the development, research, manufacture, commercialization,
marketing or other similar activities relating to abuse-deterrent pharmaceutical products, in the United States, but shall not
include any financial investment firm or collective investment vehicle that, together with its Affiliates, holds less than twenty
percent (20%) of the outstanding equity of any Competitor and does not, nor do any of its Affiliates, have a right to designate
any members of the board of directors of any Competitor.

 

     

     

    

 

1.6            “Damages”
means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities
Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect
thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained
in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying
party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or
regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.7            “Derivative
Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly
or indirectly), Common Stock, including options and warrants.

 

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

 

1.9            “Excluded
Registration” means (i) a registration relating to the sale or grant of securities to employees of the Company
or a subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating
to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information
as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a
registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that
are also being registered.

 

1.10            “Exempted
Securities” means (i) shares of Common Stock or Derivative Securities issued by reason of a dividend, stock split,
split-up or other distribution on shares of Common Stock; (ii) shares of Common Stock or Derivative Securities issued to
employees or directors of, or consultants or advisors to, the Company or any of its subsidiaries pursuant to a plan, agreement
or arrangement approved by the Board of Directors; (iii) shares of Common Stock or Derivative Securities actually issued
upon the exercise, conversion or exchange of Derivative Securities already outstanding or otherwise covered in clauses (i) or
(ii); above, in each case provided such issuance is pursuant to the terms of such Derivative Security, or (iv) any shares
of Common Stock issued in connection with any anti-dilution rights held by existing stockholders of the Company, substantially
similar to the rights given to the Investor under Section 6 hereunder.

 

1.11            “FOIA
Party” means a Person that, in the reasonable determination of the Board of Directors, may be subject to, and thereby
required to disclose non-public information furnished by or relating to the Company under, the Freedom of Information Act, 5 U.S.C.
552 (“FOIA”), any state public records access law, any state or other jurisdiction’s laws similar in
intent or effect to FOIA, or any other similar statutory or regulatory requirement.

 

1.12            “Form S-1”
means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities
Act subsequently adopted by the SEC.

 

    2 

     

    

 

1.13            “Form S-3”
means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently
adopted by the SEC that permits forward incorporation of substantial information by reference to other documents filed by the
Company with the SEC.

 

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

 

1.15            “Holder”
means the Investor, as a holder of Registrable Securities and who is a party to this Agreement.

 

1.16            “Immediate
Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural
person referred to herein.

 

1.17            “IPO”
means the Company’s first underwritten public offering of its Common Stock under the Securities Act.

 

1.18            “Key
Employee” means any executive-level employee (including, division director and vice president-level positions) as well
as any employee who, either alone or in concert with others, develops, invents, programs, or designs any Company Intellectual
Property (as defined in the Purchase Agreement).

 

1.19            “New
Securities” means, collectively, equity securities of the Company, whether or not currently authorized (including, without
limitation, any preferred stock), as well as rights, options, or warrants to purchase such equity securities, or securities of
any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

1.20            “Person”
means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

1.21            “Registrable
Securities” means (i) any Common Stock held by the Investor on the date hereof, and (ii) any Common Stock
issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clause (i) above;
excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under
this Agreement are not assigned pursuant to Subsection 7.1, and excluding for purposes of Section 2 any shares
for which registration rights have terminated pursuant to Subsection 2.11 of this Agreement.

 

1.22            “Registrable
Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common
Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then
exercisable and/or convertible securities that are Registrable Securities.

 

    3 

     

    

 

1.23            “Restricted
Securities” means the securities of the Company required to be notated with the legend set forth in Subsection 2.10(b) hereof.

 

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

 

1.25            “SEC
Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.26            “SEC
Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

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

 

1.28            “Selling
Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of
Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling
Holder Counsel borne and paid by the Company as provided in Subsection 2.5.

 

2.            Registration
Rights. The Company covenants and agrees as follows:

 

2.1            Company
Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company
for stockholders other than the Holder) any of its Common Stock under the Securities Act in connection with the public offering
of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, give the Holder
notice of such registration. Upon the request of the Holder given within twenty calendar (20) days after such notice is given
by the Company, the Company shall, subject to the provisions of Subsection 2.2, cause to be registered all of the Registrable
Securities that the Holder has requested to be included in such registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Subsection 2.1 before the effective date of such registration, whether
or not the Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses)
of such withdrawn registration shall be borne by the Company in accordance with Subsection 2.5.

 

2.2            Underwriting
Requirements.

 

(a)            In
connection with any offering involving an underwriting of shares of the Company’s Common Stock pursuant to Subsection
2.1, the Company shall not be required to include any of the Holder’s Registrable Securities in such underwriting unless
the Holder accepts the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such
quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company.
If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering
exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine
is compatible with the success of the offering, then the Company shall be required to include in the offering only that number
of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine
will not jeopardize the success of the offering.

 

    4 

     

    

 

2.3            Obligations
of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities,
the Company shall:

 

(a)            prepare
and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective and, upon the request of the Holder, keep such registration statement
effective for a period of up to one hundred twenty (120) calendar days or, if earlier, until the distribution contemplated in
the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) calendar
day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of
Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in
the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed
basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended, if necessary,
to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)            prepare
and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with
such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities
covered by such registration statement;

 

(c)            use
its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holder; provided that
the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states
or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities
Act;

 

(d)            in
the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the underwriter(s) of such offering;

 

(e)            use
its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed
on a national securities exchange, trading system or Over-the-Counter quotation system;

 

(f)            engage
a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number
for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(g)            make
available for inspection by the selling Holder, any managing underwriter(s) participating in any disposition pursuant to
such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the
Holder, all material financial and other records, material corporate documents, and properties of the Company, and cause the Company’s
officers, directors, employees, and independent accountants to supply all customary information reasonably requested by any such
seller, underwriter, attorney, accountant, or agent, in each case, as necessary to verify the accuracy of the information in such
registration statement and to conduct appropriate due diligence in connection therewith;

 

    5 

     

    

 

(h)            notify
each selling Holder of the time when such registration statement has been declared effective or a supplement to any prospectus
forming a part of such registration statement has been filed; and

 

(i)            after
such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or
supplement such registration statement or prospectus.

 

2.4            Furnish
Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this
Section 2 with respect to the Registrable Securities of any selling Holder that it shall furnish to the Company such
written information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities
as is reasonably required to effect the registration of the Holder’s Registrable Securities.

 

2.5            Expenses
of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or
qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’
and accounting fees; fees and disbursements of counsel for the Company; and the reasonable and documented fees and disbursements
of one counsel for the selling Holder (“Selling Holder Counsel”), shall be borne and paid by the Company. All
Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid
by the Holder.

 

2.6            Delay
of Registration. The Holder shall not have any right to obtain or seek an injunction restraining or otherwise delaying
any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation
or implementation of this Section 2.

 

2.7            Indemnification.
If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)            To
the extent permitted by law, the Company will indemnify and hold harmless the Holder, and its partners, members, officers, and
directors; and each Person, if any, who controls the Holder, against any Damages, and the Company will pay to each the Holder,
controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with
investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided,
however, that the indemnity agreement contained in this Subsection 2.7(a) shall not apply to amounts paid in
settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based
upon actions or omissions made in reliance upon and in conformity with information furnished by or on behalf of the Holder, controlling
Person, or other aforementioned Person expressly for use in connection with such registration.

 

    6 

     

    

 

(b)            To
the extent permitted by law, the selling Holder will indemnify and hold harmless the Company, and each of its directors, each
of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of
the Securities Act, any other selling security holder named in such registration statement, and any controlling Person of the
holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions
made in reliance upon and in conformity with information furnished by or on behalf of the Holder expressly for use in connection
with such registration; and the Holder will pay to the Company and each other aforementioned Person any legal or other expenses
reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result,
as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.7(b) shall
not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of
the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate
amounts payable by the Holder by way of indemnity or contribution under Subsections 2.7(b) and 2.7(d) exceed
the proceeds from the offering received by the Holder (net of any Selling Expenses paid by the Holder), except in the case of
fraud or willful misconduct by the Holder.

 

(c)            Promptly
after receipt by an indemnified party under this Subsection 2.7 of notice of the commencement of any action (including
any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim
in respect thereof is to be made against any indemnifying party under this Subsection 2.7, give the indemnifying party
notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent
the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to
assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the reasonable and documented fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other party represented by such counsel in such action.
The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve
such indemnifying party of any liability to the indemnified party under this Subsection 2.7, to the extent that such failure
materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 2.7.

 

    7 

     

    

 

(d)            To
provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any
party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.7
but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding
the fact that this Subsection 2.7 provides for indemnification in such case, or (ii) contribution under the Securities
Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 2.7, then,
and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which
they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each
of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted
in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether
the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to
information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or omission; provided, however, that,
in any such case (x) the Holder will not be required to contribute any amount in excess of the public offering price of all
such Registrable Securities offered and sold by the Holder pursuant to such registration statement, and (y) no Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall the
Holder’s liability pursuant to this Subsection 2.7(d), when combined with the amounts paid or payable by the Holder
pursuant to Subsection 2.7(b), exceed the proceeds from the offering received by the Holder (net of any Selling Expenses
paid by the Holder), except in the case of willful misconduct or fraud by the Holder.

 

2.8            Reports
Under Exchange Act. With a view to making available to the Holder the benefits of SEC Rule 144 and any other rule or
regulation of the SEC that may at any time permit the Holder to sell securities of the Company to the public without registration
or pursuant to a registration on Form S-3, the Company shall use its commercially reasonable efforts to make and keep available
adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective
date of the registration statement filed by the Company for an IPO and to file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become
subject to such reporting requirements).

 

2.9            “Market
Stand-off” Agreement. The Holder hereby agrees that it will not, without the prior written consent of the managing
underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares
of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1, and
ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) calendar
days in the case of an IPO, or such other period as may be requested by the Company or an underwriter to accommodate regulatory
restrictions on (1) the publication or other distribution of research reports and (2) analyst recommendations and opinions,
including, but not limited to, the restrictions contained in FINRA Rule 2241 or NYSE Rule 472(f)(4), or any successor
provisions or amendments thereto), (i) lend; offer; pledge; 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 (directly
or indirectly) for Common Stock (whether such shares or any such securities are then owned by the Holder or are thereafter acquired)
or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or other securities, in cash, or otherwise. The underwriters in connection with such registration
are intended third-party beneficiaries of this Subsection 2.9 and shall have the right, power and authority to enforce
the provisions hereof as though they were a party hereto. The Holder further agrees to execute such agreements as may be reasonably
requested by the underwriters in connection with such registration that are consistent with this Subsection 2.9 or that
are necessary to give further effect thereto.

 

    8 

     

    

 

2.10            Restrictions
on Transfer.

 

(a)            The
Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue
stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions
specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. The
Holder will cause any proposed purchaser, pledgee, or transferee of the Registrable Securities held by the Holder to agree to
take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

 

(b)            Each
certificate, instrument, or book entry representing the Registrable Securities, upon any stock split, stock dividend, recapitalization,
merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Subsection 2.11(c))
be notated with a legend substantially in the following form:

 

THESE SECURITIES HAVE NOT BEEN
REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS PURSUANT TO EXEMPTIONS IN THE VARIOUS JURISDICTIONS WHERE THEY ARE BEING SOLD.

 

THE SECURITIES REPRESENTED HEREBY
MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

    9 

     

    

 

The Holder consents
to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in
order to implement the restrictions on transfer set forth in this Subsection 2.10.

 

(c)            The
Holder agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or
transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the
proposed transaction, the Holder shall give notice to the Company of its intention to effect such sale, pledge, or transfer. Each
such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if
reasonably requested by the Company, shall be accompanied at the Holder’s expense by either (i) a written opinion of
legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company and
its Board of Directors, to the effect that the proposed transaction may be effected without registration under the Securities
Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such
Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with
respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed
sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon
the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance
with the terms of the notice given by the Holder to the Company. Each certificate, instrument, or book entry representing the
Restricted Securities transferred as above provided shall be notated with, except if such transfer is made pursuant to SEC Rule 144,
the appropriate restrictive legend set forth in Subsection 2.11(b).

 

2.11            Termination
of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any
registration pursuant to Subsection 2.1 shall terminate upon the earlier to occur of: (i) such time after consummation
of an IPO as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of the Holder’s
shares without limitation during a three-month period without registration; or (ii) the third (3rd) anniversary of an IPO.

 

3.            Information
Rights.

 

3.1            Delivery
of Financial Statements. The Company shall deliver to the Investor; provided that the Board of Directors has
not reasonably determined that the Investor is a Competitor of the Company:

 

(a)            as
soon as practicable, but in any event within one hundred twenty (120) calendar days after the end of each fiscal year of the Company
(i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and (iii) a
statement of stockholders’ equity as of the end of such year, all prepared in accordance with GAAP;

 

(b)            as
soon as practicable, but in any event within forty-five (45) calendar days after the end of each of the first three (3) quarters
of each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance
sheet and a statement of stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP
(except that such financial statements (i) may be subject to normal year-end audit adjustments; and (ii) shall not be
required to contain all notes thereto that may be required in accordance with GAAP);

 

    10 

     

    

 

(c)            as
soon as practicable, but in any event thirty (30) calendar days before the end of each fiscal year, a budget and business plan
for the next fiscal year (collectively, the “Budget”), approved by the Board of Directors and prepared on a
quarterly basis, any other budgets or revised budgets prepared by the Company;

 

If, for any period,
the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial
statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the
Company and all such consolidated subsidiaries.

 

Notwithstanding anything
else in this Subsection 3.1 to the contrary, the Company may cease providing the information set forth in this Subsection
3.1 during the period starting with the date ninety (90) calendar days before the Company’s good-faith estimate of the
date of filing of a registration statement.

 

3.2            Termination
of Information. The covenants set forth in Subsection 3.1 shall terminate and be of no further force or
effect (i) immediately before the consummation of an IPO, or (ii) when the Company first becomes subject to the periodic
reporting requirements of Section 12(g) or 15(d) of the Exchange Act, whichever event occurs first.

 

3.3            Confidentiality.
The Investor agrees that the Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than
to monitor its investment in the Company) all information, whether oral or written, disclosed by the Company or its affiliates,
employees, consultants, officers, directors, partners, ageents, attorneys, consultants, or advisors (including notice of the Company’s
intention to file a registration statement), unless such information (a) is known or becomes known to the public in general
(other than as a result of a breach of this Subsection 3.3 by the Investor), (b) is or has been independently developed
or conceived by the Investor without use of or reference to the Company’s confidential information, or (c) is or has
been lawfully received by the Investor on a non-confidential basis from a third party that has the legal right to disclose such
information; provided, however, that an Investor may disclose confidential information (i) to its attorneys,
accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring
its investment in the Company; (ii) to any Affiliate, partner, member, stockholder, or wholly owned subsidiary of the Investor
in the ordinary course of business, provided that the Investor informs such Person that such information is confidential
and directs such Person to maintain the confidentiality of such information; or (iii) as may otherwise be required by law,
regulation, rule, court order or subpoena, provided that the Investor promptly notifies the Company of such disclosure
and takes reasonable steps to minimize the extent of any such required disclosure.

 

    11 

     

    

 

4.            Rights
to Future Stock Issuances.

 

4.1            Right
of First Offer. Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if
the Company proposes to offer or sell any New Securities, the Company shall first offer the Investor’s pro rata portion
(as determined in accordance with Subsection 4.1(b)) of such New Securities to the Investor. An Investor shall be entitled
to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate, among (i) itself,
(ii) its Affiliates and (iii) its beneficial interest holders, such as limited partners, members or any other Person
having “beneficial ownership,” as such term is defined in Rule 13d-3 promulgated under the Exchange Act, of the
Investor (“Investor Beneficial Owners”); provided that each such Affiliate or Investor Beneficial Owner
(x) is not a Competitor or FOIA Party, unless such party’s purchase of New Securities is otherwise consented to by
the Board of Directors, (y) agrees to enter into this Agreement and each of the Voting Agreement, dated as of June 22,
2018, among the Company, the Investor and the other parties named therein (provided that any Competitor or FOIA Party shall
not be entitled to any rights as an Investor under Subsections 3.1 and 4.1 hereof), and (z) agrees to purchase
at least such number of New Securities as are allocable hereunder to the Investor holding the fewest number of Common Stock and
any other Derivative Securities.

 

(a)            The
Company shall give notice (the “Offer Notice”) to the Investor, stating (i) its bona fide intention to
offer such New Securities, (ii) the number of such New Securities expected to be offered, and (iii) the anticipated
price and material terms, if any, upon which it proposes to offer such New Securities.

 

(b)            By
notification to the Company within twenty (20) calendar days after the Offer Notice is given, the Investor may elect to purchase
or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities that
equals the proportion that the Common Stock then held by the Investor (including all shares of Common Stock then issuable (directly
or indirectly) upon conversion and/or exercise, as applicable, of any Derivative Securities then held by the Investor) bears to
the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Derivative
Securities then outstanding).

 

(c)            If
all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Subsection 4.1(b),
the Company may, during the six (6) month period following the expiration of the periods provided in Subsection 4.1(b),
offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and
upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not sell the New Securities
within such period, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless
first reoffered to the Investor in accordance with this Subsection 4.1.

 

(d)            The
right of first offer in this Subsection 4.1 shall not be applicable to (i) Exempted Securities and (ii) shares
of Common Stock issued in an IPO.

 

    12 

     

    

 

(e)            Notwithstanding
any provision hereof to the contrary, in lieu of complying with the provisions of this Subsection 4.1, the Company may
elect to give notice to the Investor within thirty (30) calendar days after the issuance of New Securities. Such notice shall
describe the type, price, and material terms of the New Securities. The Investor shall have twenty (20) calendar days from the
date notice is given to elect to purchase up to the number of New Securities that would, if purchased by the Investor, maintain
its percentage-ownership position, calculated as set forth in Subsection 4.1(b) before giving effect to the issuance
of such New Securities.

 

(f)            For
avoidance of doubt, the Company may offer similar rights of first offer to its existing stockholders; provided that such rights
of first offer do not adversely affect the rights of the Investor in this Subsection 4.1.

 

4.2            Termination.
The covenants set forth in Subsection 4.1 shall terminate and be of no further force or effect (i) immediately before
the consummation of an IPO, or (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or
15(d) of the Exchange Act, whichever event occurs first.

 

5.            Restrictive
Covenants.

 

5.1            Restrictive
Covenant. The Company shall not, without the prior written consent or affirmative vote of the Investor, given in writing
or by vote at a meeting, amend, alter or modify the Certificate of Incorporation to authorize any preferred stock of the Company.

 

5.2            Equity
Incentive Plan. The Company may not grant equity incentive awards that exceed in the aggregate ten percent (10%) of
the aggregate number of issued and outstanding shares of Common Stock, calculated on a fully-diluted basis.

 

5.3            Termination.
The covenants set forth in this Section 5 shall terminate and be of no further force or effect upon the earliest to
occur of: (i) immediately before the consummation of an IPO, or (ii) when the Company first becomes subject to the periodic
reporting requirements of Section 12(g) or 15(d) of the Exchange Act;.

 

6.            Anti-Dilution
Rights.

 

6.1            Anti-Dilution
Rights. Subject to Subection 6.3 below, in the event the Company shall at any time after the date hereof issue
additional shares of Common Stock to any party other than the Investor, without consideration or for a consideration per share
less than the Issuance Price (as defined below) in effect immediately prior to such issuance (a “Dilutive Issuance”),
then the Company shall issue to the Investor such number of additional shares of Common Stock determined in accordance with the
following formula:

 

AS = (IP1/IP2 * SH)
 – SH

 

IP2 = IP1* (A + B) ÷
(A + C).

 

    13 

     

    

 

For purposes of the
foregoing formula, the following definitions shall apply:

 

“AS” shall
mean the number of additional shares of Common Stock issuable to the Investor pursuant to this Subsection 6.1;

 

“SH” shall
mean the total number of shares of Common Stock held by the Investor immediately prior to such Dilutive Issuance.

 

“IP1” shall
mean the Issuance Price in effect immediately prior to such Dilutive Issuance;

 

“IP2” shall
mean the Issuance Price in effect immediately after such Dilutive Issuance;

 

“A” shall
mean the number of shares of Common Stock outstanding immediately prior to such Dilutive Issuance (treating for this purpose as
outstanding all shares of Common Stock issuable upon exercise of options outstanding immediately prior to such issuance or deemed
issuance or upon conversion or exchange of convertible securities outstanding immediately prior to such Dilutive Issuance);

 

“B” shall
mean the number of shares of Common Stock that would have been issued if the shares of Common Stock issued at the Dilutive Issuance
had been issued or deemed issued at a price per share equal to IP1 (determined by dividing the aggregate consideration received
by the Corporation in respect of such issue by IP1); and

 

“C” shall
mean the number of such additional shares of Common Stock issued in such Dilutive Issuance.

 

6.2            Issuance
Price. The “Issuance Price” of the shares of Common Stock held by the Investor shall initially be
equal to $0.095430. Such initial Issuance Price shall be subject to adjustment as provided above in Subsection 6.1.

 

6.3            Exempted
Securities. Notwithstanding anything to the contrary herein, the provisions of Subsection 6.1 shall not apply
to any issuance or grant of Exempted Securities.

 

6.4            Termination.
The covenants set forth in Section 6 shall terminate and be of no further force or effect upon the earliest to occur
of: (i) immediately before the consummation of an IPO, (ii) when the Company first becomes subject to the periodic reporting
requirements of Section 12(g) or 15(d) of the Exchange Act; or (iii) the closing of the next equity financing
in which the Company raises at least an aggregate amount of $5,000,000 through the issuance of its Common Stock.

 

    14 

     

    

 

7.            Miscellaneous.

 

7.1            Successors
and Assigns

. The rights under this Agreement may not be transferred
or assigned by the Holder without the prior written consent of the Company. The terms and conditions of this Agreement inure to
the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted
assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided
herein.

 

7.2            Governing
Law. This Agreement shall be governed by the internal law of the State of New York, without regard to conflict of law
principles that would result in the application of any law other than the law of the State of New York.

 

7.3            Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including pdf or any
electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

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

 

7.5            Notices.

 

(a)            All
notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent
by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours,
then on the recipient’s next business day; (iii) five (5) calendar days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit
with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt.
All communications shall be sent to the Investor at its address as set forth on the signature page hereto, or to the principal
office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address
or address as subsequently modified by written notice given in accordance with this Subsection 7.5. If notice is given
to the Company, a copy shall also be sent to Thompson Hine LLP, 335 Madison Avenue, 12th Floor, New York, New York 10017-4611,
Attention: Faith L. Charles.

 

(b)            Consent
to Electronic Notice. The Investor consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation
Law (the “DGCL”), as amended or superseded from time to time, by electronic transmission pursuant to Section 232
of the DGCL (or any successor thereto) at the electronic mail address or the facsimile number as on the books of the Company.
The Investor agrees to promptly notify the Company of any change in its electronic mail address, and that failure to do so shall
not affect the foregoing.

 

    15 

     

    

 

7.6            Amendments
and Waivers. Any term of this Agreement may be amended, modified or terminated and the observance of any term of this
Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the
written consent of the Company and the Holder; provided that the Company may in its sole discretion waive compliance with
Subsection 2.10(c) (and the Company’s failure to timely object in writing after notification of a proposed assignment
allegedly in violation of Subsection 2.10(c) shall be deemed to be a waiver); and provided further that
any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party.
Any amendment, modification, termination, or waiver effected in accordance with this Subsection 7.6 shall be binding on
all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition,
or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver
of any such term, condition, or provision.

 

7.7            Severability.
In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such
invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable
to the maximum extent permitted by law.

 

7.8            Aggregation
of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights
as among themselves in any manner they deem appropriate.

 

7.9            Entire
Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding
and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to
the subject matter hereof existing between the parties is expressly canceled.

 

7.10            Dispute
Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state and
federal courts in the State of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this
Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except
in the state or federal courts in Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense,
or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.

 

    16 

     

    

 

Waiver of Jury Trial: EACH PARTY HEREBY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE SECURITIES
OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS
SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.
EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

7.11            Delays
or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement,
upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching
or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar
breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach
or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to
any party, shall be cumulative and not alternative.

 

[Remainder of Page Intentionally
Left Blank]

 

    17 

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first written above.

 

	 	COMPANY:
	 	 
	 	VALLON
    PHARMACEUTICALS, INC.
	 	 
	 	 
	 	By:	/s/ David Baker                   
	 	Name: David
    Baker
	 	Title: President &
    CEO

 

 

    	 

    	 

    

 

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first written above.

 

	 	INVESTOR:
	 	 
	 	SALMON PHARMA GMBH
	 	 
	 	 
	 	By:	/s/ Richard Ammer        
	 	Name: Richard Ammer, MD, PhD
	 	Title: General Manager
	 	 
	 	Address:

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