Document:

Exhibit

EXHIBIT 10.2
CARTER VALIDUS MISSION CRITICAL REIT II, INC. 
RESTRICTED STOCK AWARD AGREEMENT 
	
			
	 
	 
	 

	Name of Recipient:
	 
	 

	Number of Award Shares:
	 
	 

	 
	 
	 

	Award Date:
	 
	 

 
 
THIS AGREEMENT (the “Agreement”) is made and entered into as of the day and date on the last page hereof (the “Award Date”), by and between Carter Validus Mission Critical REIT II, Inc. (the “Company”), a Maryland corporation, and the individual Recipient noted above (the “Recipient”). Unless otherwise indicated, all capitalized terms used in this Agreement are defined in the Plan as of the Award Date or in the “Definitions” section of EXHIBIT A. EXHIBIT A is incorporated by reference and is included in the definition of “Agreement.”
W I T N E S S E T H: 
WHEREAS, the Company has adopted the Carter Validus Mission Critical REIT II, Inc. Amended and Restated 2014 Restricted Share Plan (the “Plan”); and 
WHEREAS, the Board of Directors of the Company (the “Board”) or a committee thereof has authorized the grant to Recipient of a restricted stock award under the Plan or the Plan itself provides for an automatic grant of a restricted stock award to Recipient of the Class A common stock of the Company (“Common Stock”), and the Company and Recipient wish to confirm herein the terms, conditions, and restrictions of the restricted stock award; 
NOW, THEREFORE, in consideration of the premises, the mutual covenants contained herein, and other good and valuable consideration, the parties hereto agree as follows: 
 
	
		
	1
	AWARD OF SHARES

1.1 Award of Shares. Subject to the terms, restrictions, limitations, and conditions stated herein and in the Plan, the Company hereby awards to Recipient the number of shares of Common Stock (the “Award Shares”) noted above. By the execution of this Agreement, the Recipient hereby accepts the Award Shares subject to all terms and provisions of this Agreement. 
1.2 Vesting of Award Shares. Recipient shall become vested in a percentage of the Award Shares shown below based upon the Continuous Service of the Recipient from the Award Date of the Award Shares through the specified vesting date:1 
	
			
	 
	 
	 

	Vesting Schedule:

	Percentage Vested:
	 
	Vesting Date:

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	
	
	 

1 Leave cells empty in filed form. For actual awards, reflect terms approved by Board.
2 Leave brackets in filed form.
3 Leave brackets in form filed with the SEC.

If the above calculation of vested Shares would result in a fraction, any fraction will be rounded to zero. However, notwithstanding the foregoing, in the event that the Recipient ceases Continuous Service with the Company [(1) by reason of death or Disability, (2) because the Recipient’s Continuous Service with the Company has been terminated by the Company without Cause or (4) because the Recipient has terminated Continuous Service with the Company for Good Reason]2, then the Recipient shall nonetheless immediately, as of the date of such cessation of Continuous Service, become fully (100%) vested in the Award Shares. [Furthermore, notwithstanding the foregoing, in the event that a Change of Control of the Company occurs while the Recipient is performing Continuous Service with the Company, then the Recipient shall nonetheless immediately, as of the date of such Change of Control, become fully (100%) vested in the Award Shares.]3 Notwithstanding the foregoing, the Board may, in its sole discretion, accelerate the vesting of the Award Shares in whole or in part. The Award Shares which have become vested pursuant to the vesting schedule or by virtue of such acceleration are herein referred to as the “Vested Award Shares” and all Award Shares which are not Vested Award Shares are sometimes herein referred to as the “Unvested Award Shares.” 
1.3 Rights as Stockholder; Dividend & Voting Rights. Recipient (or any subsequent transferee) shall have no rights as a Stockholder with respect to any Award Shares until shares are issued in Recipient’s name. Recipient shall be entitled to dividends paid or declared on Vested and Unvested Award Shares for which the record date is on or after the date such Award Shares have been issued in the Recipient’s name; provided, however, any dividends paid in the form of common stock of the Company shall be considered Award Shares and shall be subject to all terms and provisions of this Agreement as the underlying Award Shares. Recipient shall have all voting rights applicable for all Vested and Unvested Award Shares for which the record date is on or after the date such Award Shares have been issued in the Recipient’s name. Recipient shall have no rights whatsoever (dividend, voting or otherwise) with respect to Award Shares which have been forfeited under Sections 2.1 or 2.2. 
1.4 Withholding on Award Shares. Recipient hereby agrees that, in consideration for the grant of the Award Shares, the following federal and state income tax withholding provisions shall apply: 
(a) Code §83(b) Election Made by Recipient. If the Recipient makes a Code §83(b) Election with respect to the Award Shares, then, in order not to forfeit Award Shares, the Recipient must deliver to the Company a check payable to the Company in the amount of all withholding or other tax obligations (whether federal, state or local) imposed on the Company by reason of such Code §83(b) Election simultaneously with the Recipient’s delivery to the Company of a copy of his Code §83(b) Election (which must occur no later than thirty (30) days after the Award Date). If the Recipient does not timely make such payment, the Award Shares shall be immediately forfeited by the Recipient, and any amounts which must be paid by the Company for any required withholding or other tax obligations imposed on the Company by reason of such Code §83(b) Election shall be paid by the Recipient by directly withholding all such amounts as quickly as possible consistent with applicable law from any other compensation payable to the Recipient on or after the date of such Code §83(b) Election. The Recipient hereby agrees to the withholding by the Company outlined in the preceding sentence, and authorizes and directs that such withholding from the Recipient’s compensation be made if such sentence is applicable. 
(b) Code §83(b) Election Not Made by Recipient. If the Recipient does not make a Code §83(b) Election with respect to the Award Shares, then the Recipient shall be entitled to elect one (or, at the discretion of the Committee, a combination) of the following methods of satisfying the Company’s withholding obligations (see EXHIBIT C attached): 
(1) Direct Payment on or prior to Substantial Vesting Event. The Recipient may, on or before the date of occurrence of an event pursuant to which such Award Shares become “substantially vested” within the meaning of Code §83, deliver to the Company cash and/or a check payable to the Company in the amount of all withholding obligations (whether federal, state or local) imposed on the Company by reason of the substantial vesting of such Award Shares. 
(2) Return of Vested Award Shares upon Substantial Vesting Event. The Recipient may, as of the close of business on the business day which is coincident with or which immediately follows the occurrence of an event pursuant to which such Award Shares become “substantially vested” within the meaning of Code §83, allow the Company to repurchase from the Recipient the smallest whole number of Vested Award Shares which, when multiplied by the Fair Market Value of the Common Stock on such business date, is sufficient to satisfy the amount of the withholding tax obligations imposed on the Company by reason of the vesting of the Award Shares. If the Recipient elects this method of satisfying withholding obligations, the Recipient acknowledges 

and understands that any Vested Award Shares repurchased from the Recipient may result in tax consequences to the Recipient.
The Recipient’s election of a method of withholding under this Section 1.4 must be made prior to the date of occurrence of an event pursuant to which such Award Shares become “substantially vested” within the meaning of Code §83. The Recipient’s election of a method of withholding under this Section 1.4 shall, once made, be irrevocable. Notwithstanding the above, if, for any reason, withholding or other tax obligations (whether federal, state or local) are imposed upon the Company by reason of the grant of the Award Shares or their becoming substantially vested, the Company shall have the power and the right to deduct or withhold, or require the Recipient to remit to the Company as a condition precedent to immediate forfeiture of the Award Shares, an amount sufficient to satisfy such withholding or other tax obligations (whether federal, state or local), and, in this regard, the Company may offer the Recipient various alternatives for satisfying such obligations. If the Recipient fails to timely make an election with respect to the vesting of any Award Shares, then the method specified in Section 1.4(b)(2) shall automatically apply unless the Company determines that the method specified in Section 1.4(b)(1) should instead apply, in which case the Recipient shall be required to comply and the Recipient agrees that the necessary withholding and other tax obligations (whether federal, state or local) imposed upon the Recipient shall be withheld from any amounts due or owing to the Recipient by the Company if the Recipient does not timely provide such amounts. 
1.5 Investment Representations. Recipient hereby represents, warrants, covenants, and agrees with the Company as follows: 
(a) The Award Shares being acquired by Recipient will be acquired for Recipient’s own account without the participation of any other person, with the intent of holding the Award Shares for investment and without the intent of participating, directly or indirectly, in a distribution of the Award Shares and not with a view to, or for resale in connection with, any distribution of the Award Shares, nor is Recipient aware of the existence of any distribution of the Award Shares; 
 
(b) Recipient is not acquiring the Award Shares based upon any representation, oral or written, by any person with respect to the future value of, or income from, the Award Shares but rather upon an independent examination and judgment as to the prospects of the Company; 
(c) The Award Shares were not offered to Recipient by means of publicly disseminated advertisements or sales literature, nor is the Recipient aware of any offers made to other persons by such means; 
(d) Recipient is able to bear the economic risks of the investment in the Award Shares, including the risk of a complete loss of Recipient’s investment therein; 
(e) Recipient understands and agrees that the Award Shares will be issued and sold to Recipient without registration under any state law relating to the registration of securities for sale, and will be issued and sold in reliance on the exemptions from registration under the Securities Act of 1933 (the “1933 Act”), provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated thereunder; 
(f) The Award Shares cannot be offered for sale, sold or transferred by Recipient other than pursuant to: (A) an effective registration under the 1933 Act or in a transaction otherwise in compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance with the applicable securities laws of other jurisdictions. The Company shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws; 
(g) The Company will be under no obligation to register the Award Shares or to comply with any exemption available for sale of the Award Shares without registration or filing, and the information or conditions necessary to permit routine sales of securities of the Company under Rule 144 of the 1933 Act are not now available and no assurance has been given that it or they will become available. The Company is under no obligation to act in any manner so as to make Rule 144 available with respect to the Award Shares; 
(h) Recipient has and has had complete access to and the opportunity to review and make copies of all material documents related to the business of the Company, including, but not limited to, contracts, financial statements, tax returns, leases, deeds, and other books and records. Recipient has examined such of these documents as Recipient has wished and is familiar with the business and affairs of the Company. Recipient realizes that the purchase of the Award Shares is a speculative investment and that any possible profit therefrom is uncertain; 
(i) Recipient has had the opportunity to ask questions of and receive answers from the Company and any person acting on its behalf and to obtain all material information reasonably available with respect to the Company and its 

affairs. Recipient has received all information and data with respect to the Company which Recipient has requested and which Recipient has deemed relevant in connection with the evaluation of the merits and risks of Recipient’s investment in the Company; 
(j) Recipient has such knowledge and experience in financial and business matters that Recipient is capable of evaluating the merits and risks of the purchase of the Award Shares hereunder and Recipient is able to bear the economic risk of such purchase; and 
(k) The agreements, representations, warranties, and covenants made by Recipient herein extend to and apply to all of the Award Shares of the Company issued to Recipient pursuant to this restricted stock award. Acceptance by Recipient of such Award Shares shall constitute a confirmation by Recipient that all such agreements, representations, warranties, and covenants made herein shall be true and correct at that time. 

	
			
	2
	

	RESTRICTIONS & FORFEITURE OF AWARD SHARES

2.1 Forfeiture of Award Shares. As a condition of receiving a grant of Award Shares pursuant to this Agreement, the Recipient agrees that if, subsequent to the grant of the Award Shares, the Recipient, either directly or indirectly, on the Recipient’s own behalf or in the service or on behalf of others, serves as a principal, partner, officer, director, manager, supervisor, administrator, consultant or employee engaged in any business which involves the business of investing in income-producing commercial real estate in the healthcare and data center sectors (a “Business Competing with the Business of the Company”) while performing services for the Company and for a period ending one year from the date of the Recipient’s cessation of services for the Company, and the Committee determines in good faith that the Recipient has violated the provisions of this Section, then notwithstanding any other provisions contained in this Agreement, (1) the Recipient (or any subsequent holder or transferee of the Award Shares) shall immediately forfeit any and all Vested and Unvested Shares and (2) the Recipient (or such subsequent holder or transferee of the Award Shares) shall forfeit and return to the Company any amounts which Recipient (or such holder or transferee) received at the time of disposition of any Vested Shares within ten (10) calendar days of notice from the Company. 
2.2 Forfeiture upon Cessation of Services. Notwithstanding anything to the contrary herein, upon the Recipient’s cessation of the performance of services for the Company, or any Parent or Subsidiary: 
(a) by the Company for actions or omissions which would constitute Cause, all Award Shares (including all Vested Award Shares and Unvested Award Shares) shall be forfeited, effective upon the date of such cessation of the performance of services; or 
(b) for any reason other than as set forth in 2.2(a) above, except as otherwise provided in Section 1.2, all Unvested Award Shares shall be forfeited, effective upon such cessation of the performance of services. 
2.3 Restrictions on Unvested Award Shares. None of the Unvested Award Shares may be conveyed, pledged, assigned, transferred, hypothecated, encumbered, or otherwise disposed of by Recipient, and any attempt to do so with respect to Unvested Award Shares shall be null and void ab initio, unless the Committee expressly authorizes such in writing, in which case the transferee shall be subject to all provisions of this Restricted Stock Agreement. If Unvested Award Shares are transferred pursuant to the preceding sentence, the Recipient agrees to notify the Committee at least thirty (30) days prior to such transfer, and the Committee may require that the transferee thereof execute and deliver to the Company such documents and agreements as the Company shall reasonably require to evidence the fact that the Award Shares to be owned, either directly or beneficially, by such transferee shall continue to be subject to all the restrictions set forth in this Agreement and all applicable rights in favor of the Company set forth elsewhere herein, and that such transferee is subject to and bound by such restrictions and provisions. The restrictions of this Section 2.3 shall not apply to Vested Award Shares. 
2.4 Restrictions on Transfer of Award Shares. Award Shares shall be subject to the following transfer restrictions: 
(a) General Rule. None of the Award Shares may be conveyed, pledged, assigned, transferred, hypothecated, encumbered, or otherwise disposed of by Recipient, or if the Award Shares are held or owned of record by a transferee, by such transferee, (either being referred to herein as the “Holder”), except as expressly provided in subsections (b), (c), or (d) below.
(b) Company Permitted Transfers. The Board may, but shall not be obligated to, approve the transfer of any or all of the Award Shares upon the condition that the transferee thereof execute and deliver to the Company such documents and agreements as the Company shall require to evidence the fact that the Award Shares to be owned, 

either directly or beneficially, by such transferee shall continue to be subject to all the restrictions set forth in this Agreement and all applicable rights in favor of the Company set forth herein, and that such transferee is subject to and bound by such restrictions and provisions.
(c) Transfers upon Death. The Award Shares may be transferred by Holder to a transferee by bequest or by operation of the laws of descent and distribution upon the death of Holder upon the condition that the transferee thereof execute and deliver to the Company such documents and agreements as the Company shall require to evidence the fact that the Award Shares to be owned, either directly or beneficially, by such transferee shall continue to be subject to all the restrictions set forth in this Agreement and all applicable rights in favor of the Company set forth herein, and that such transferee is subject to and bound by such restrictions and provisions. 
(d) Post Service Period Transfers. The Award Shares may be transferred by Holder after the expiration of the one year period commencing on the date of the Recipient’s cessation of services for the Company (the “Post Service Period”), if and only if Holder shall have first complied with the right of first refusal described in Section 2.6 below. 
 
2.5 Company’s Right to Repurchase. During the Post Service Period, the Company shall have the right, but not the obligation, to purchase from Holder all or any portion of the Award Shares which have not been forfeited pursuant to Sections 2.1 or 2.2. The purchase price shall be the product of (1) a price per Award Share (the “Repurchase Price Per Share”), multiplied by (2) the number of Vested Award Shares the Company is repurchasing. If the Company elects to exercise its right to repurchase pursuant to this Section 2.5, it shall do so by giving written notice thereof to Holder, which notice shall specify the number of Award Shares held by Holder as to which the Company is exercising its repurchase right. The repurchase by the Company and the sale by Holder of such Award Shares shall be consummated not later than thirty (30) days following the date the Company gives written notice of its exercise of such repurchase right. Payment of the purchase price by the Company shall be in cash or by the Company’s check against delivery of the Award Shares being repurchased. The Repurchase Price Per Share shall equal the Fair Market Value of a share of Common Stock (on a fully diluted basis) as of the last day of the most recent fiscal quarter for which financial information is available, as determined by the Board of the Company. In making such determination, the Board may take into account factors that it, in good faith, deems relevant to such valuation, including the absence of a trading market, the minority status of the Award Shares, and such other facts and circumstances deemed material to the value of the Award Shares in the hands of Recipient. 
2.6 Right of First Refusal. Before any Award Shares held by Holder may be sold or otherwise transferred (except for a transfer under Sections 2.4(b) or 2.4(c)), the Company or the stockholders of the Company (the “Stockholders”) shall have a right of first refusal to purchase the Award Shares on the terms and conditions set forth in this Section 2.6 (the “Right of First Refusal”). 
(a) Notice of Proposed Transfer. The Holder of the Award Shares shall deliver to the Company a written notice (the “Notice”) stating (i) the Holder’s bona fide intention to sell or otherwise transfer such Award Shares, (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”), (iii) the number of Award Shares to be transferred to each Proposed Transferee, and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Award Shares (the “Offered Price”); in addition, by providing the Notice, the Holder is deemed to be offering to sell the Shares at the Offered Price to the Company or the Stockholders, as the case may be. 
(b) Exercise of Right of First Refusal. At any time within sixty (60) days after receipt of the Notice (the “Election Period”), the Company may, by giving written notice to the Holder, elect to purchase any or all of the Award Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below. In the event the Company does not so elect to purchase any or all of the Award Shares proposed to be transferred, the Company shall promptly provide the Notice to the Stockholders. In such event, at any time within the Election Period, the Stockholders may, by giving written notice to the Holder, elect to purchase any or all of the Award Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below. The Stockholders shall have the right to accept the offer to purchase the Award Shares proposed to be transferred for the consideration and on the terms and conditions specified in the Notice, with each Stockholder having the right to acquire its Pro Rata Allotment (as defined below). “Pro Rata Allotment” shall mean with respect to any Award Shares proposed to be transferred, as determined for any Stockholder, the number of such Award Shares multiplied by a fraction, the numerator of which is the number of shares of Common Stock owned of record on the relevant date of determination by such Stockholder (on an as if converted basis), and the denominator of which is the number of shares of Common Stock owned of record on the relevant date of determination by all Stockholders (on a fully-diluted, as if converted basis). Each Stockholder shall have the right to assign its rights under this subsection (b) to the Company, or to the 

other Stockholders (proportionately, based upon proportions of the Pro Rata Allotment allocated to each Stockholder, excluding the assigning Stockholder). 
(c) Purchase Price. The purchase price for the Award Shares purchased under this Section 2.6 shall be the Offered Price. If the Offered Price includes consideration other than cash, the Board in good faith shall determine the cash equivalent value of the non-cash consideration. 
(d) Payment. Payment of the purchase price shall be made, at the option of the Company or the Stockholders, as the case may be, either (i) in cash (by certified check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (if the Company shall be the purchasing party) or by any combination thereof within thirty (30) days after receipt of the Notice or (ii) in the manner and at the time(s) set forth in the Notice. 
 
(e) Holder’s Right to Transfer. If all of the Award Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or the Stockholders as provided in this Section 2.6, then the Holder may sell or otherwise transfer such Award Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred and twenty (120) days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in a manner satisfactory to the Company and in writing that the provisions of this Section 2.6 shall continue to apply to the Award Shares in the hands of such Proposed Transferee. If the Award Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company or the Stockholders, as the case may be, and the Company shall again be offered the Right of First Refusal, before any Award Shares held by the Holder may be sold or otherwise transferred. 
(f) Third Party Beneficiaries. Recipient agrees that the Stockholders are third party beneficiaries of the provisions of this Section 2.6 and that the Stockholders may enforce such provisions as if they were parties hereto. Recipient acknowledges that decisions that the Stockholders make with respect to the Company may be made in reliance upon the Recipient entering into this Agreement, and the Company would not enter into this Agreement without Recipient agreeing to the provisions of this Section 2.6. 
2.7 Pledging of Award Shares. If the Company incurs indebtedness and in connection therewith, at the time the Recipient receives his Award Shares, all other stockholders of the Company have either pledged their shares of Common Stock, or have been asked to pledge their shares of Common Stock for the benefit of certain lenders of the Company, the Recipient, if so requested by the Company, shall pledge any exercised Award Shares on the same terms and conditions as the other stockholders of the Company and shall take such actions as may be required to accomplish the pledge as may be requested by the Company. 
2.8 Market-Stand-Off Agreement. Recipient agrees that, if requested by the Company and its underwriters, Recipient will enter into a lock-up or similar agreement not to sell or offer to sell any securities of the Company during the 180-day period following the effective date of a registration statement of the Company filed under the 1933 Act provided that such agreement only applies to the first such registration statement of the Company which includes securities to be sold on the Company’s behalf to the public in an underwritten offering. 
2.9 Termination of Restrictions. The restrictions contained in Sections 2.4 through 2.7 above shall continue in effect, notwithstanding the earlier termination or expiration of this Agreement, until ninety (90) days after the first sale of common stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission (other than a registration statement solely covering an employee benefit plan or corporate reorganization). However, notwithstanding the foregoing, the Award Shares, whether owned by the Recipient or any transferee thereof shall continue to be subject to all restrictions imposed under Section 2.1 through 2.2 until all Award Shares have become Vested Award Shares. 
2.10 Right of Setoff. At any closing of a purchase by the Company of Award Shares pursuant to Sections 2.5, or 2.6, the Company shall have the right to set off against and to deduct from any sums payable by it in connection with the purchase of Award Shares, the principal amount of and all accrued but unpaid interest on any indebtedness of Recipient owing to the Company on the date of the closing. 
 

	
		
	3
	GENERAL PROVISIONS

3.1 Legends. Each certificate (if any) representing the Award Shares shall, subject to Section 3.2 below, be endorsed with the following legend and Recipient shall not make any transfer of the Award Shares without first complying with the restrictions on transfer described in such legend: 
TRANSFER IS RESTRICTED 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL AND OTHER RESTRICTIONS ON TRANSFER SET FORTH IN A RESTRICTED STOCK AWARD AGREEMENT DATED [INSERT DATE OF THIS AGREEMENT], A COPY OF WHICH IS AVAILABLE FROM THE COMPANY. 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION UNDER SUCH ACT COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR (3) THE ISSUER RECEIVES AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT. 
Recipient agrees that the Company may also endorse any other legends required by applicable federal or state securities laws. The Company need not register a transfer of the Award Shares, and may also instruct its transfer agent, if any, not to register the transfer of the Award Shares unless the conditions specified in the foregoing legends are satisfied. 
3.2 Removal of Legend and Transfer Restrictions. 
(a) Any legend endorsed on a certificate pursuant to Section 3.1 and the stop transfer instructions with respect to the Award Shares shall be removed and the Company shall issue a certificate without such legend to the holder thereof if such Award Shares are registered under the Securities Act and a prospectus meeting the requirements of Section 10 of the Securities Act is available. 
(b) The restrictions described in the second sentence of the legend set forth in Section 3.1 may be removed at such time as permitted by Rule 144(k) promulgated under the Securities Act. 
3.3 Governing Laws. This Agreement shall be construed, administered and enforced according to the laws of the State of Maryland; provided, however, no Award Shares shall be issued except, in the reasonable judgment of the Board, in compliance with exemptions under applicable state securities laws of the state in which Recipient resides, and/or any other applicable securities laws. 
3.4 Successors. This Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors, and permitted assigns of the parties. 
3.5 Notice. Except as otherwise specified herein, all notices and other communications under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or if sent by registered or certified United States mail, return receipt requested, postage prepaid, addressed to the proposed recipient at the last known address of the recipient. Any party may designate any other address to which notices shall be sent by giving notice of the address to the other parties in the same manner as provided herein. 
3.6 Severability. In the event that any one or more of the provisions or portion thereof contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of this Agreement, and this Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein. 
3.7 Entire Agreement. Subject to the terms and conditions of the Plan, this Agreement expresses the entire understanding and agreement of the parties with respect to the subject matter. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. 
3.8 Violation. Any transfer, pledge, sale, assignment, or hypothecation of the Award Shares or any portion thereof shall be a violation of the terms of this Agreement and shall be null, void and without effect ab initio. 
 

3.9 Headings. Paragraph headings used herein are for convenience of reference only and shall not be considered in construing this Agreement. 
3.10 Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. 
3.11 No Employment Rights Created. Neither the establishment of the Plan nor the award of Award Shares hereunder shall be construed as giving Recipient the right to continued employment with the Company. 
3.12 Capitalized Terms. All capitalized terms used in this Agreement shall have the meanings given to them herein or in the Plan. 
3.13 No Disclosure Duty. The Recipient and the Company acknowledge and agree that the Company and its directors, officers or employees shall have no duty or obligation to disclose to the Recipient any material information regarding the business of the Company or affecting the value of the Award Shares. 
3.14 Tax Consequences. RECIPIENT REPRESENTS THAT RECIPIENT HAS BEEN ADVISED BY THE COMPANY TO CONSULT WITH, AND HAS FULLY CONSULTED WITH, RECIPIENT’S OWN TAX CONSULTANTS REGARDING HIS MAKING A CODE §83(B) ELECTION WITH RESPECT TO THE AWARD SHARES AND THE RESULTING IMPACT ON RECIPIENT’S PERSONAL TAX SITUATION, PRIOR TO ENTERING INTO THIS AGREEMENT AND THAT RECIPIENT IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. RECIPIENT UNDERSTANDS THAT RECIPIENT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF RECIPIENT’S RECEIPT AND DISPOSITION OF THE SHARES. RECIPIENT UNDERSTANDS THAT RECIPIENT MAY OR MAY NOT MAKE A CODE §83(B) ELECTION WITH RESPECT TO THE AWARD SHARES, BUT THAT RECIPIENT SHALL BE SUBJECT TO THE WITHHOLDING PROVISIONS OF SECTION 1.4 HEREIN BASED UPON THE CHOICE OF RECIPIENT REGARDING SUCH CODE §83(B) ELECTION AND THE CHOICE OF RECIPIENT REGARDING THE TIME AND MANNER THAT WITHHOLDING OBLIGATIONS SHALL BE SATISFIED. 
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement on the day and year first set forth above. 
 
	
									
	 
	 
	 
	 
	 
	 
	 
	 
	 

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	CARTER VALIDUS MISSION CRITICAL REIT II, INC.:
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

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EXHIBIT A 
DEFINITIONS 
A. Agreement shall mean this Restricted Stock Agreement. 
B. Award Shares shall mean the shares of common stock of the Company which are awarded to the Recipient subject to the terms and conditions of this Agreement. 
C. Code shall mean the Internal Revenue Code of 1986, as amended from time to time. 
D. Code §83(b) Election shall mean the election available to the recipient of property transferred in connection with the performance of services to include in gross income under Code §83(b) the excess of the fair market value of the property transferred determined as of the time of transfer over the amount (if any) paid for such property as compensation for services. 
E. Common Stock shall mean the common stock of the Company. 
F. Company shall mean Carter Validus Mission Critical REIT II, Inc., and any successor thereto. 
G. Committee shall mean the Compensation Committee of the Board of Directors. 
H. Disability shall mean a physical or mental impairment that substantially limits one or more major life activities and prevents the Recipient from performing his or her duties for the Company. 
I. Plan shall mean the Carter Validus Mission Critical REIT II, Inc. 2014 Restricted Share Plan. 
J. Recipient shall mean the individual shown on this Agreement as the Recipient. 
K. Unvested Award Shares shall mean the Award Shares which have not become vested pursuant to the Vesting Schedule or otherwise. 
L. Vested Award Shares shall mean the Award Shares which have become vested pursuant to the Vesting Schedule or otherwise. 

EXHIBIT B 
ELECTION UNDER SECTION 83(b) 
OF THE INTERNAL REVENUE CODE 
The undersigned taxpayer (the “Taxpayer”) hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in his gross income for the current taxable year, the amount of any compensation taxable to him in connection with his receipt of the property described below: 
1. The name, address and taxpayer identification number of the undersigned Taxpayer are as follows: 
 
	
			
	 
	 
	 

	Name:
	 
	 

	 
	 

	Address:
	 
	 

	 
	 

	Social Security Number (TIN):
	 
	 

2. The property with respect to which the election is made is: 
shares of Class A common stock of Carter Validus Mission Critical REIT II, Inc. 
3. The date on which the property was transferred and the taxable year for which this election is made are: 
 
	
			
	 
	 
	 

	Date on Which Property Was Transferred:
	 
	 

	 
	 

	Taxable Year for Which Election is Made:
	 
	 

4. The property is subject to transferability, forfeiture and other restrictions, all as set forth in a Restricted Stock Agreement between the Taxpayer and Carter Validus Mission Critical REIT II, Inc. 
5. The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: 
 
	
	
	 

	$ /Share X  Shares = $ 

6. No amount was paid for such property. 
The undersigned Taxpayer has submitted copies of this statement to Carter Validus Mission Critical REIT II, Inc., the person for whom the services were performed in connection with the Taxpayer’s receipt of the above-described property. The Taxpayer is the person performing the services in connection with the transfer of said property. The undersigned Taxpayer understands that the foregoing election may NOT be revoked except with the consent of the Commissioner, which will only be granted when the Taxpayer is under a mistake of fact as to the underlying transaction and when made within 60 days of the date such mistake of fact first became known to the Taxpayer. 
THE UNDERSIGNED TAXPAYER UNDERSTANDS AND ACKNOWLEDGES THAT, FOR THIS ELECTION TO BE EFFECTIVE, COPIES OF THIS COMPLETED ELECTION FORM MUST BE FILED WITH THE INTERNAL REVENUE SERVICE (AT THE LOCATION WHERE THE TAXPAYER’S INCOME TAX RETURN WOULD BE FILED) NOT LATER THAN 30 DAYS AFTER THE DATE THE ABOVE-DESCRIBED PROPERTY WAS 

TRANSFERRED TO THE TAXPAYER. A COPY OF THIS COMPLETED ELECTION MUST ALSO BE SUBMITTED TO CARTER VALIDUS MISSION CRITICAL REIT II, INC., ALONG WITH FULL PAYMENT OF AMOUNTS REQUIRED TO BE WITHHELD UNDER APPLICABLE LAW, WITHIN 30 DAYS AFTER THE DATE THE ABOVE-DESCRIBED PROPERTY WAS TRANSFERRED TO THE TAXPAYER. 
 
	
					
	 
	 
	 
	 
	 

	 
	 
	Dated this day of , 20 .

	 
	 
	 

	 
	 
	Signature:
	 
	 

	 
	 
	 

	 
	 
	Name of Taxpayer:
	 
	 

 
Code §83(b) Election Form 

EXHIBIT C 
WITHHOLDING ELECTION 
	
			
	 
	 
	 

	TO:
	 
	Carter Validus Mission Critical REIT II, Inc.

	 
	 

	RE:
	 
	Withholding Election

	 

	This election relates to the number of shares of common stock of the Company which will vest on the date noted below (the “Vesting Shares”):

	 

	Number of Vesting Shares:  

	 

	Date of Vesting:  

 
	
	
	 

	Restricted Stock Agreement:
 

	Restricted Stock Agreement between the Recipient (designated below) and Carter Validus Mission Critical REIT II, Inc. (the “Company”).

	 

	Date of Agreement: 

	 

	Total Number of Restricted Shares subject to Restricted Stock Agreement:  

	 

 
 
 
I, the undersigned Recipient, hereby certify that: 
-My correct name and social security number and my current address are set forth at the end of this document. 
-I have read and understand the Restricted Stock Agreement and the various methods by which withholding obligations regarding the Vesting Shares subject to the Restricted Stock Agreement may be satisfied. 
-I do hereby elect the following method of withholding pursuant to Section 1.4 of the Restricted Stock Agreement with respect to any withholding or other tax obligations (whether federal, state or local) imposed on the Company by reason of the substantial vesting of the Vesting Shares (the “Withholding Obligations”), assuming that I have met all requirements under the Plan relative to such election and such election is approved by the Company: 
 
	
		
	 ̈
	In accordance with Section 1.4(b)(1), I hereby elect to pay to the Company the entire amount of all Withholding Obligations with respect to the Vesting Shares in cash or by check on or before the Date of Vesting.

 
	
		
	 ̈
	In accordance with Section 1.4(b)(2), I hereby elect that the entire amount of all Withholding Obligations with respect to the Vesting Shares should be paid by having the Company repurchase the smallest whole number of the Vested Shares which, when multiplied by the fair market value per share of the common stock of the Company as of the close of business on the business day which is coincident with or immediately follows the Date of Vesting, will be sufficient to satisfy the amount of such Withholding Obligations, and applying all the proceeds from such repurchase to such Withholding Obligations. I further acknowledge and understand that the repurchase by the Company of any Vested Shares may result in tax consequences to me.

-I understand that capitalized terms used in this Notice of Withholding Election without definition herein shall have the meanings given to them in the Restricted Stock Agreement and in the Plan. 

-I also understand that if I do not timely (in accordance with the Restricted Stock Agreement and the Plan) submit this form properly completed, I shall be responsible for timely paying all Withholding Obligations and that the Company may withhold an amount sufficient to pay all the Withholding Obligations from any other amounts due or owing to me (including salary) if I do not do so. 
 
	
							
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	RECIPIENT:
	 
	 

	Dated this day of , 20
	 
	 
	 
	 
	 
	 

	 
	 
	 

	Recipient’s Address:
	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 
	Printed Name:
	 
	 

	 
	 
	 

	 
	 
	 
	 
	Social Security Number: - -

	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

 
Withholding Election FormExhibit
4.4

 

DESCRIPTION
OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES
EXCHANGE ACT OF 1934

 

As
of March 9, 2020, InspireMD, Inc., a Delaware corporation (“we,” “our” and the “Company”)
has three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: (i) common stock,
par value $0.0001 per share, (ii) warrants, with each warrant exercisable for 1/43,750 shares of common stock at an exercise price
$8,750 per share (the “Series A Warrants”), and (iii) Series B Warrants, with each warrant exercisable for 1/1,750
shares of common stock at an exercise price of $3,500 per share, . The following description of such securities is intended as
a summary of the terms of such securities as currently in effect and is qualified in its entirety by the provisions of our amended
and restated certificate of incorporation, as amended (the “Certificate of Incorporation”), the bylaws, and the respective
warrant agreements and the warrant certificates, copies of which are filed as exhibits to this Annual Report on Form 10-K and
are incorporated by reference herein. We encourage you to read our amended and restated Certificate of Incorporation and amendments
thereto, our bylaws, the forms of the respective warrant agreements and the warrant certificates and the applicable provisions
of the Delaware General Corporation Law, as amended (the “DGCL”), for additional information.

 

Authorized
Capital Stock

 

Pursuant
to our Certificate of Incorporation, we have authorized 155,000,000 shares of capital stock, par value $0.0001 per share, of which
150,000,000 are shares of common stock and 5,000,000 are shares of “blank check” preferred stock. The authorized and
unissued shares of common stock and the authorized and undesignated shares of preferred stock are available for issuance without
further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange on which
our securities may be listed. Unless approval of our stockholders is so required, our board of directors does not intend to seek
stockholder approval for the issuance and sale of our common stock or preferred stock.

 

Common
Stock

 

The
holders of our common stock are entitled to one vote per share. Our Certificate of Incorporation does not provide for cumulative
voting. Our directors are divided into three classes. At each annual meeting of stockholders, directors elected to succeed those
directors whose terms expire are elected for a term of office to expire at the third succeeding annual meeting of stockholders
after their election. The holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared
by our board of directors out of legally available funds; however, the current policy of our board of directors is to retain earnings,
if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to
share ratably in all assets that are legally available for distribution. The holders of our common stock have no preemptive, subscription,
redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to, and may
be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely by action
of our board of directors and issued in the future.

 

The
transfer agent and registrar for our common stock is Action Stock Transfer Corp. The transfer agent’s address is 2469 E.
Fort Union Blvd., Suite 214, Salt Lake City, Utah 84121.

 

Our
common stock is listed on the NYSE American under the symbol “NSPR.”

 

    	 

    	 

    

 

Preferred
Stock

 

The
board of directors is authorized, subject to any limitations prescribed by law, without further vote or action by the stockholders,
to issue from time to time shares of preferred stock in one or more series. Each such series of preferred stock shall have such
number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall
be determined by the board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences,
conversion rights and preemptive rights. Issuance of preferred stock by our board of directors may result in such shares having
dividend and/or liquidation preferences senior to the rights of the holders of our common stock and could dilute the voting rights
of the holders of our common stock.

 

Prior
to the issuance of shares of each series of preferred stock, the board of directors is required by the Delaware General Corporation
Law and our Certificate of Incorporation to adopt resolutions and file a certificate of designation with the Secretary of State
of the State of Delaware. The certificate of designation fixes for each class or series the designations, powers, preferences,
rights, qualifications, limitations and restrictions, including, but not limited to, some or all of the following:

 

	 	●	the
    number of shares constituting that series and the distinctive designation of that series, which number may be increased or
    decreased (but not below the number of shares then outstanding) from time to time by action of the board of directors;	 
	 	 	 	 
	 	●	the
    dividend rate and the manner and frequency of payment of dividends on the shares of that series, whether dividends will be
    cumulative, and, if so, from which date;	 
	 	 	 	 
	 	●	whether
    that series will have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting
    rights;	 
	 	 	 	 
	 	●	whether
    that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision
    for adjustment of the conversion rate in such events as the board of directors may determine;	 
	 	 	 	 
	 	●	whether
    or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption;	 
	 	 	 	 
	 	●	whether
    that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount
    of such sinking fund;	 
	 	 	 	 
	 	●	whether
    or not the shares of the series will have priority over or be on a parity with or be junior to the shares of any other series
    or class in any respect;	 
	 	 	 	 
	 	●	the
    rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the
    corporation, and the relative rights or priority, if any, of payment of shares of that series; and	 
	 	 	 	 
	 	●	any
    other relative rights, preferences and limitations of that series.	 

 

Once
designated by our board of directors, each series of preferred stock may have specific financial and other terms.

 

    	2

    	 

    

 

Series
B Convertible Preferred Stock (the “Series B Preferred Stock”)

 

As
of March 9, 2020, there were 17,303 shares of Series B Preferred Stock outstanding, convertible into an aggregate of 555,138 shares
of our common stock (including the payment of the cumulative dividends accrued on the Series B Preferred Stock in an aggregate
of 237,916 shares of our common stock).

 

On
July 7, 2016, we issued 442,424 shares of Series B Preferred Stock in a public offering. Our Series B Preferred Stock has a stated
value of $33.00 and was initially convertible into 0.00229 shares of common stock (subject to the beneficial ownership limitations
as provided in the related certificate of designation of preferences) reflecting a conversion price equal to $14,437.50 per share,
subject to adjustment as provided in the certificate of designation. In accordance with the anti-dilution price protection contained
in the certificate of designation for the Series B Preferred Stock as further described below, we reduced the Series B Preferred
Stock conversion price to $2,800.00 per share of common stock in connection with the underwritten public offering that closed
on March 14, 2017, which was further reduced to $350.00 per share in connection with the private placement of 750 shares of Series
D Preferred Stock in December 2017, to $150.00 per share in connection with the underwritten public offering that closed on March
1, 2018, to $87.50 per share in connection with the underwritten public offering that closed on April 2, 2018, to $15.00 per share
in connection with the underwritten public offering that closed on July 3, 2018, to $5.00 per share in connection with the underwritten
public offering that closed on April 8, 2019, then to $1.80 per share in connection with the underwritten public offering that
closed on September 24, 2019.

 

The
Series B Preferred Stock is convertible at any time at the option of the holder prior to the fifth anniversary of the date of
issuance, at which time all shares of outstanding Series B Preferred Stock shall automatically and without any further action
by the holder be converted into shares of our common stock at the then effective conversion price, provided that the holder will
be prohibited from converting Series B Preferred Stock into shares of our common stock if, as a result of such conversion, the
holder, together with its affiliates, would own more than 9.99% of the total number of shares of our common stock then issued
and outstanding.

 

The
holders of Series B Preferred Stock are entitled to receive cumulative dividends at the rate per share of 15% per annum of the
stated value per share, until the fifth anniversary of the date of issuance of the Series B Preferred Stock. The dividends become
payable, at our option, in either cash, out of any funds legally available for such purpose, or in shares of common stock, (i)
upon any conversion of the Series B Preferred Stock, (ii) on each such other date as our board of directors may determine, subject
to written consent of the holders of Series B Preferred Stock holding a majority of the then issued and outstanding Series B Preferred
Stock, (iii) upon our liquidation, dissolution or winding up, and (iv) upon occurrence of a fundamental transaction, including
any merger or consolidation, sale of all or substantially all of our assets, exchange or conversion of all of our common stock
by tender offer, exchange offer or reclassification; provided, however, that if Series B Preferred Stock is converted into shares
of common stock at any time prior to the fifth anniversary of the date of issuance of the Series B Preferred Stock, the holder
will receive a make-whole payment in an amount equal to all of the dividends that, but for the early conversion, would have otherwise
accrued on the applicable shares of Series B Preferred Stock being converted for the period commencing on the conversion date
and ending on the fifth anniversary of the date of issuance, less the amount of all prior dividends paid on such converted Series
B Preferred Stock before the date of conversion. Make-whole payments are payable at our option in either cash, out of any funds
legally available for such purpose, or in shares of common stock.

 

With
respect to any dividend payments and make-whole payments paid in shares of common stock, the number of shares of common stock
to be issued to a holder of Series B Preferred Stock will be an amount equal to the quotient of (i) the amount of the dividend
payable to such holder divided by (ii) the conversion price then in effect.

 

    	3

    	 

    

 

We
are not obligated to redeem or repurchase any shares of Series B Preferred Stock. Shares of Series B Preferred Stock are not otherwise
entitled to any redemption rights, or mandatory sinking fund or analogous fund provision.

 

The
Series B Preferred Stock, to the extent that it has not been converted previously, is subject to full ratchet anti-dilution price
protection upon the issuance of equity or equity-linked securities at an effective common stock purchase price of less than the
conversion price then in effect, subject to adjustment as provided in the certificate of designation. As such, while any of our
Series B Preferred Stock is outstanding, if we issue equity or equity-linked securities at an effective common stock purchase
price of less than the Series B Preferred Stock conversion price then in effect, we are required, subject to certain limitations
and adjustments as provided in the certificate of designation, to reduce the Series B Preferred Stock conversion price to equal
the effective common stock purchase price. This reduction in the Series B Preferred Stock conversion price will result in a greater
number of shares of common stock becoming issuable upon conversion of the Series B Preferred Stock for no additional consideration.

 

In
the event of our liquidation, dissolution, or winding up, holders of our Series B Preferred Stock will be entitled to receive
the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares
of Series B Preferred Stock if such shares had been converted to common stock immediately prior to such event (without giving
effect for such purposes to the 9.99% beneficial ownership limitation, as applicable) subject to the preferential rights of holders
of any class or series of our capital stock specifically ranking by its terms senior to the Series B Preferred Stock as to distributions
of assets upon such event, whether voluntarily or involuntarily.

 

The
holders of the Series B Preferred Stock have no voting rights, except as required by law. Any amendment to our Certificate of
Incorporation, bylaws or certificate of designation that adversely affects the powers, preferences and rights of the Series B
Preferred Stock requires the approval of the holders of a majority of the shares of Series B Preferred Stock then outstanding.

 

We
have not listed, and we do not plan on making an application to list, the Series B Preferred Stock on the NYSE American, any other
national securities exchange or any other nationally recognized trading system.

 

Shares
of Series B Preferred Stock were issued in book-entry form under a transfer agency and service agreement between Action Stock
Transfer Corp., as transfer agent, and us, and are represented by one or more book-entry certificates deposited with DTC and registered
in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

 

The
transfer agent and registrar for our Series B Preferred Stock is Action Stock Transfer Corp. The transfer agent’s address
is 2469 E. Fort Union Blvd., Suite 214, Salt Lake City, Utah 84121.

 

You
should review the certificate of designation of the Series B Preferred Stock, and subsequent amendments, which are filed as an
exhibit to this Annual Report on Form 10-K, for a complete description of the terms and conditions of the Series B Preferred Stock.

 

Series
C Convertible Preferred Stock (the “Series C Preferred Stock”)

 

As
of March 9, 2020, there were 26,558 shares of Series C Preferred Stock outstanding, convertible into an aggregate of 94,428 shares
of our common stock.

 

    	4

    	 

    

 

On
March 14, 2017, we issued 1,069,822 shares of Series C Preferred Stock in a public offering. Our Series C Preferred Stock has
a stated value of $6.40, and each share of Series C Preferred Stock was initially convertible into 0.00229 of a share of common
stock at an initial conversion price equal to $2,800 per share of common stock. Series C Preferred Stock, to the extent that it
has not been converted previously, is subject to full ratchet anti-dilution price protection upon the issuance of equity or equity-linked
securities at an effective common stock purchase price of less than the conversion price then in effect, subject to adjustment
as provided in the certificate of designation. In accordance with the anti-dilution price protection contained in the certificate
of designation for the Series C Preferred Stock as further described below, we reduced the Series C Preferred Stock conversion
price to $150.00 per share in connection with the underwritten public offering that closed on March 1, 2018, to $87.50 per share
in connection with the underwritten public offering that closed on April 2, 2018, to $15.00 per share in connection with the underwritten
public offering that closed on July 3, 2018, to $5.00 per share in connection with the underwritten public offering that closed
on April 8, 2019, then to $1.80 per share in connection with the underwritten public offering that closed on September 24, 2019.

 

The
Series C Preferred Stock is convertible at any time at any time at the option of the holder, provided that the holder will be
prohibited from converting Series C Preferred Stock into shares of our common stock if, as a result of such conversion, the holder,
together with its affiliates, would own more than 4.99% of the total number of shares of our common stock then issued and outstanding.
However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any
increase in such percentage shall not be effective until 61 days after such notice to us.

 

In
the event of our liquidation, dissolution, or winding up, holders of our Series C Preferred Stock will be entitled to receive
the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares
of Series C Preferred Stock if such shares had been converted to common stock immediately prior to such event (without giving
effect for such purposes to the 4.99% or 9.99% beneficial ownership limitation, as applicable) subject to the preferential rights
of holders of any class or series of our capital stock specifically ranking by its terms senior to the Series C Preferred Stock
as to distributions of assets upon such event, whether voluntarily or involuntarily.

 

Shares
of Series C Preferred Stock are not entitled to receive any dividends, unless and until specifically declared by our board of
directors. However, holders of our Series C Preferred Stock are entitled to receive dividends on shares of Series C Preferred
Stock equal (on an as-if-converted-to-common-stock basis, and without giving effect for such purposes to the 4.99% or 9.99% beneficial
ownership limitation, as applicable) to and in the same form as dividends actually paid on shares of the common stock when such
dividends are specifically declared by our board of directors. We are not obligated to redeem or repurchase any shares of Series
C Preferred Stock. Shares of Series C Preferred Stock are not otherwise entitled to any redemption rights, or mandatory sinking
fund or analogous fund provision.

 

The
holders of the Series C Preferred Stock have no voting rights, except as required by law. Any amendment to our Certificate of
Incorporation, bylaws or certificate of designation that adversely affects the powers, preferences and rights of the Series C
Preferred Stock requires the approval of the holders of a majority of the shares of Series C Preferred Stock then outstanding.

 

Pursuant
to the anti-dilution provisions contained in the certification of designation for our Series C Preferred Stock, in the event that,
while any of our Series C Preferred Stock is outstanding, we issue equity or equity-linked securities at an effective common stock
purchase price of less than the Series C Preferred Stock conversion price then in effect, we are required, subject to certain
limitations and adjustments as provided in the certificate of designation, to reduce the Series C Preferred Stock conversion price
to equal the effective common stock purchase price. This reduction in the Series C Preferred Stock conversion price will result
in a greater number of shares of common stock becoming issuable upon conversion of the Series C Preferred Stock for no additional
consideration.

 

    	5

    	 

    

 

We
have not listed, and we do not plan on making an application to list, the Series C Preferred Stock on the NYSE American, any other
national securities exchange or any other nationally recognized trading system.

 

Shares
of Series C Preferred Stock were issued in book-entry form under a transfer agency and service agreement between Action Stock
Transfer Corp., as transfer agent, and us, and are represented by one or more book-entry certificates deposited with DTC and registered
in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

 

The
transfer agent and registrar for our Series C Preferred Stock is Action Stock Transfer Corp. The transfer agent’s address
is 2469 E. Fort Union Blvd., Suite 214, Salt Lake City, Utah 84121.

 

You
should review the certificate of designation of the Series C Preferred Stock, and a subsequent amendment, which are filed as an
exhibit to this Annual Report on Form 10-K, for a complete description of the terms and conditions of the Series C Preferred Stock.

 

Series
A Warrants

 

On
July 7, 2016, we issued to certain investors in an underwritten public offering Series A Warrants to purchase up to an aggregate
of 1,102 shares of our common stock at an exercise price of $8,750 per share. The Series A Warrants are exercisable immediately
and may be exercised until 5:00 p.m. New York City time on July 7, 2021. The Series A Warrants may be exercised only for a whole
number of shares of common stock.

 

These
Series A Warrants trade on the NYSE American under the symbol “NSPR.WS.” As of March 9, 2020, the Series A Warrants
issued and outstanding are exercisable into 1,102 shares of common stock.

 

The
Series A Warrants were issued in book-entry form under a warrant agent agreement between Action Stock Transfer Corp., as warrant
agent, and us, and are represented by one or more book-entry certificates deposited with DTC, and registered in the name of Cede
& Co., a nominee of DTC, or as otherwise directed by DTC. The warrant agent agreement, and the form of Series A Warrant certificate
attached thereto, is included as an exhibit to this Annual Report on Form 10-K. You should review the warrant agent agreement
and the form of Series A Warrant certificate for a complete description of the terms and conditions of the Series A Warrants.

 

The
warrant agent and registrar for the Series A Warrants is Action Stock Transfer Corp. The warrant agent’s address is 2469
E. Fort Union Blvd., Suite 214, Salt Lake City, Utah 84121.

 

Exercisability.
The Series A Warrants are exercisable at any time after the date of issuance, and at any time up to the date that is 60
months from the date of issuance, at which time any unexercised Series A Warrants will expire and cease to be exercisable.
The Series A Warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed
exercise notice and by payment in full in immediately available funds for the number of shares of common stock purchased upon
such exercise. If a registration statement registering the issuance of the shares of common stock underlying the Series A
Warrants under the Securities Act, is not then effective or available, the holder may exercise the Series A Warrants through
a cashless exercise, in whole or in part, in which case the holder would receive upon such exercise the net number of shares
of common stock determined according to the formula set forth in the Series A Warrants. No fractional shares of common stock
will be issued in connection with the exercise of the Series A Warrants. In lieu of fractional shares, we will either pay the
holder an amount in cash equal to the fractional amount multiplied by the exercise price or round up to the next whole
share.

 

    	6

    	 

    

 

Exercise
Limitation. A holder will not have the right to exercise any portion of the Series A Warrant if the holder (together with
its affiliates) would beneficially own in excess of 4.99% of the number of shares of our stock outstanding immediately after giving
effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Series A Warrants. However,
any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase
in such percentage shall not be effective until 61 days after such notice to us.

 

Exercise
Price; Anti-Dilution. The current exercise price per share of common stock purchasable upon exercise of the Series A Warrants
is $8,750 per share of common stock. The exercise price is subject to appropriate adjustment in the event of certain stock dividends
and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock.

 

Transferability.
Subject to applicable laws, the warrants may be offered for sale, sold, transferred or assigned without our consent.

 

Fundamental
Transactions. In the event of a fundamental transaction, as described in the Series A Warrants and generally including any
reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially
all of our properties or assets, our consolidation or merger with or into another person, the holders of the warrants will be
entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property that the holders would
have received had they exercised the warrants immediately prior to such fundamental transaction.

 

Rights
as a Stockholder. Except as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of
our common stock, the holder of a warrant does not have the rights or privileges of a holder of our common stock, including any
voting rights, until the holder exercises the warrant.

 

We,
with the consent of the Series A Warrant holders holding all of the then outstanding Series A Warrants, may increase the exercise
price, shorten the expiration date and amend all other warrant terms. We may lower the exercise price or extend the expiration
date without the consent of the holders.

 

Series
B Warrants

 

On
March 14, 2017, we issued to certain investors in an underwritten public offering Series B Warrants to purchase up to an aggregate
of 2,448 shares of our common stock at an exercise price of $3,500 per share. The Series B Warrants are exercisable immediately
and may be exercised until 5:00 p.m. New York City time on March 14, 2022. The Series B Warrants may be exercised only for a whole
number of shares of common stock.

 

These
Series B Warrants trade on the NYSE American under the symbol “NSPR.WSB.” As of March 9, 2020, the Series B Warrants
issued and outstanding are exercisable into 2,448 shares of common stock.

 

The
Series B Warrants were issued in book-entry form under a warrant agent agreement between Action Stock Transfer Corp., as warrant
agent, and us, and are represented by one or more global book-entry certificates deposited with DTC, and registered in the name
of Cede & Co., a nominee of DTC, or as otherwise directed by DTC. The warrant agent agreement, and the form of Series B Warrant
certificate attached thereto, is included as an exhibit to this Annual Report on Form 10-K. You should review the warrant agent
agreement and the form of Series B Warrant certificate for a complete description of the terms and conditions of the Series B
Warrants.

 

    	7

    	 

    

 

The
warrant agent and registrar for the Series B Warrants is Action Stock Transfer Corp. The warrant agent’s address is 2469
E. Fort Union Blvd., Suite 214, Salt Lake City, Utah 84121.

 

Exercisability.
The Series B Warrants are exercisable at any time after the date of issuance, and at any time up to the date that is 5 years
from the date of issuance, at which time any unexercised Series B Warrants will expire and cease to be exercisable. The Series
B Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise
notice and by payment in full in immediately available funds for the number of shares of common stock purchased upon such exercise.
If a registration statement registering the issuance of the shares of common stock underlying the Series B Warrants under the
Securities Act is not then effective or available, the holder may exercise the warrant through a cashless exercise, in whole or
in part, in which case the holder would receive upon such exercise the net number of shares of common stock determined according
to the formula set forth in the warrant. No fractional shares of common stock will be issued in connection with the exercise of
a warrant. In lieu of fractional shares, we will either pay the holder an amount in cash equal to the fractional amount multiplied
by the exercise price or round up to the next whole share.

 

Exercise
Limitation. A holder will not have the right to exercise any portion of the warrant if the holder (together with its affiliates)
would beneficially own in excess of 4.99% of the number of shares of our stock outstanding immediately after giving effect to
the exercise, as such percentage ownership is determined in accordance with the terms of the Series B Warrants. However, any holder
may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage
shall not be effective until 61 days after such notice to us.

 

Exercise
Price; Anti-Dilution. The current exercise price per share of common stock purchasable upon exercise of the Series B Warrants
is $3,500 per share of common stock. The exercise price is subject to appropriate adjustment in the event of certain stock dividends
and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock.

 

Transferability.
Subject to applicable laws, the Series B Warrants may be offered for sale, sold, transferred or assigned without our consent.
There is currently no trading market for the Series B Warrants and a trading market may not ever develop.

 

Fundamental
Transactions. In the event of a fundamental transaction, as described in the Series B Warrants and generally including any
reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially
all of our properties or assets, our consolidation or merger with or into another person, the holders of the Series B Warrants
will be entitled to receive upon exercise of the Series B Warrants the kind and amount of securities, cash or other property that
the holders would have received had they exercised the Series B Warrants immediately prior to such fundamental transaction. Notwithstanding
the foregoing, in the event of a fundamental transaction, each holder may, at its option, at any time concurrently with, or within
30 days after, the consummation of such fundamental transaction, cause us to purchase the unexercised portion of the Series B
Warrants at an amount of cash equal to the Black-Scholes value of such Series B Warrants on the date of the consummation of such
fundamental transaction; provided, however, such holder may not require us or our successor entity to purchase the Series B Warrants
for the Black-Scholes value solely in connection with a fundamental transaction that is (i) not approved by our board of directors
and (ii) not within our control.

 

    	8

    	 

    

 

Rights
as a Stockholder. Except as otherwise provided in the Series B Warrants or by virtue of such holder’s ownership of shares
of our common stock, the holder of a warrant does not have the rights or privileges of a holder of our common stock, including
any voting rights, until the holder exercises the warrant.

 

We,
with the consent of the Series B Warrant holders holding all of the then outstanding Series B Warrants, may increase the exercise
price, shorten the expiration date and amend all other warrant terms. We may lower the exercise price or extend the expiration
date without the consent of investors.

 

Delaware
Anti-Takeover Law, Provisions of our Certificate of Incorporation and Bylaws

 

Delaware
Anti-Takeover Law

 

We
are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation
from engaging in a “business combination” with an “interested stockholder” for a period of three years
after the date of the transaction in which the person became an interested stockholder, unless:

 

	 	●	prior
    to the date of the transaction, the board of directors of the corporation approved either the business combination or the
    transaction which resulted in the stockholder becoming an interested stockholder;	 
	 	 	 	 
	 	●	the
    interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced,
    excluding for purposes of determining the number of shares outstanding (i) shares owned by persons who are directors and also
    officers and (ii) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially
    whether shares held subject to the plan will be tendered in a tender or exchange offer; or	 
	 	 	 	 
	 	●	on
    or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual
    or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding
    voting stock which is not owned by the interested stockholder.	 

 

Section
203 defines a business combination to include:

 

	 	●	any
    merger or consolidation involving the corporation and the interested stockholder;	 
	 	 	 	 
	 	●	any
    sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;	 
	 	 	 	 
	 	●	subject
    to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
    to the interested stockholder; or	 
	 	 	 	 
	 	●	the
    receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
    provided by or through the corporation.	 

 

In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with, or controlling, or controlled by, the entity or person.
The term “owner” is broadly defined to include any person that, individually, with or through that person’s
affiliates or associates, among other things, beneficially owns the stock, or has the right to acquire the stock, whether or not
the right is immediately exercisable, under any agreement or understanding or upon the exercise of warrants or options or otherwise
or has the right to vote the stock under any agreement or understanding, or has an agreement or understanding with the beneficial
owner of the stock for the purpose of acquiring, holding, voting or disposing of the stock.

 

    	9

    	 

    

 

The
restrictions in Section 203 do not apply to corporations that have elected, in the manner provided in Section 203, not to be subject
to Section 203 of the Delaware General Corporation Law or, with certain exceptions, which do not have a class of voting stock
that is listed on a national securities exchange or held of record by more than 2,000 stockholders. Our Certificate of Incorporation
and bylaws do not opt out of Section 203.

 

Section
203 could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage
attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price
above the prevailing market price.

 

Certificate
of Incorporation and Bylaws

 

Provisions
of our Certificate of Incorporation and bylaws may delay or discourage transactions involving an actual or potential change in
our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their
shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions
could adversely affect the price of our common stock. Among other things, our Certificate of Incorporation and bylaws:

 

	 	●	permit
    our board of directors to issue up to 5,000,000 shares of preferred stock, without further action by the stockholders, with
    any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change
    in control;	 
	 	 	 	 
	 	●	provide
    that the authorized number of directors may be changed only by resolution of the board of directors;	 
	 	 	 	 
	 	●	provide
    that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative
    vote of a majority of directors then in office, even if less than a quorum;	 
	 	 	 	 
	 	●	divide
    our board of directors into three classes, with each class serving staggered three-year terms;	 
	 	 	 	 
	 	●	do
    not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled
    to vote in any election of directors to elect all of the directors standing for election, if they should so choose);	 
	 	 	 	 
	 	●	provide
    that special meetings of our stockholders may be called only by our board of directors; and	 
	 	 	 	 
	 	●	set
    forth an advance notice procedure with regard to the nomination, other than by or at the direction of our board of directors,
    of candidates for election as directors and with regard to business to be brought before a meeting of stockholders.	 

 

    	10

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