Document:

Exhibit 4.7

 

 

 

DRONE AVIATION HOLDING CORP.

 

and

 

CLEARTRUST, LLC, as

Warrant Agent

 

 

 

Warrant Agency Agreement

 

Dated as of October __, 2019

 

     

     

    

 

WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT,
dated as of October __, 2019 (“Agreement”), between Drone Aviation Holding Corp., a corporation organized under
the laws of the State of Nevada (the “Company”), and ClearTrust, LLC (the “Warrant Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to
a registered offering by the Company (the “Offering”) of [_______________] shares of the Company’s common
stock, par value $0.0001 per share (the “Common Stock”), and [_______________] warrants (the “Warrants”),
each Warrant to purchase one (1) share of Common Stock (the “Warrant Shares”) at an exercise of $[___] per share
(such shares of Common Stock and Warrants to be sold in the form of immediately separable units); and

 

WHEREAS, the Company
granted an over-allotment option to purchase up to 15% of the aggregate number of shares of Common Stock and/or Warrants sold,
including Warrants to purchase an additional [__] shares of Common Stock (the “Over-Allotment Option”) to the
Underwriters; and

 

WHEREAS, upon the terms
and subject to the conditions hereinafter set forth and pursuant to an effective registration statement on Form S-1, as amended
(File No. 333-232020) (the “Registration Statement”), and the terms and conditions of the Warrant Certificate,
the Company wishes to issue the Warrants in book entry form entitling the respective holders of the Warrants (the “Holders,”
which term shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants
are held in “street name,” a Participant (as defined below) or a designee appointed by such Participant); and

 

WHEREAS, the shares
of Common Stock and Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately,
but will be purchased together in the Offering; and

 

WHEREAS, the Company
wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance,
registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s
transfer agent, the delivery of the Warrant Shares (as defined below).

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1. Certain
Definitions. For purposes of this Agreement, all capitalized terms not herein defined shall have the meanings hereby indicated:

 

(a) “Affiliate”
has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(b) “Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which the Nasdaq Stock Market is authorized or required by law or other governmental action to close.

 

(c) “Close
of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that
if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.

 

(d) “Person”
means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization,
government or political subdivision thereof or governmental agency or other entity.

 

    2

     

    

 

(e) “Warrant
Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto, representing such number
of Warrant Shares as is indicated therein, provided that any reference to the delivery of a Warrant Certificate in this Agreement
shall include delivery of a Definitive Certificate or a Global Warrant (each as defined below).

 

All other capitalized
terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.

 

Section 2. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Warrant Agent hereby accepts such appointment.

 

Section 3. Global
Warrants.

 

(a) The Warrants
shall be registered securities and shall be evidenced by a global warrant (the “Global Warrants”), in the form
of the Warrant Certificate, which shall be deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee
of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of
beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained
by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such
institution, with respect to a Warrant in its account, a “Participant”).

 

(b) If the Depositary
subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent
regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer
necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary
to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent to deliver
to each Holder a Warrant Certificate.

 

(c) A Holder has
the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate Request
Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s
Global Warrants for a separate certificate in the form attached hereto as Exhibit 1 (such separate certificate, a “Definitive
Certificate”) evidencing the same number of Warrants, which request shall be in the form attached hereto as Exhibit
2 (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request Notice
by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery by the Holder
of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”),
the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver to the Holder a Definitive Certificate
for such number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Definitive Certificate shall
be dated the original issue date of the Warrants, shall be manually executed by an authorized signatory of the Company, shall be
in the form attached hereto as Exhibit 1 and shall be reasonably acceptable in all respects to such Holder. In connection
with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Definitive Certificate to
the Holder within ten (10) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the
Warrant Certificate Request Notice (“Warrant Certificate Delivery Date”). If the Company fails for any reason
to deliver to the Holder the Definitive Certificate subject to the Warrant Certificate Request Notice by the Warrant Certificate
Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares evidenced by such Definitive Certificate (based on the VWAP (as defined in the Warrants) of the Common Stock on the Warrant
Certificate Request Notice Date), $10 per Business Day for each Business Day after such Warrant Certificate Delivery Date until
such Definitive Certificate is delivered or, prior to delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange.
The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate Request Notice, the Holder shall be
deemed to be the holder of the Definitive Certificate and, notwithstanding anything to the contrary set forth herein, the Definitive
Certificate shall be deemed for all purposes to contain all of the terms and conditions of the Warrants evidenced by such Warrant
Certificate and the terms of this Agreement, other than Sections 3(c), 3(d) and 9 herein, shall not apply to the Warrants evidenced
by the Definitive Certificate. Notwithstanding anything herein to the contrary, the Company shall act as warrant agent with respect
to any Definitive Certificate requested and issued pursuant to this section. Notwithstanding anything to the contrary contained
in this Agreement, in the event of inconsistency between any provision in this Agreement and any provision in a Definitive Certificate,
as it may from time to time be amended, the terms of such Definitive Certificate shall control.

 

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(d) A Holder of a
Definitive Certificate (pursuant to a Warrant Exchange or otherwise) has the right to elect at any time or from time to time a
Global Warrants Exchange (as defined below) pursuant to a Global Warrants Request Notice (as defined below). Upon written notice
by a Holder to the Company for the exchange of some or all of such Holder’s Warrants evidenced by a Definitive Certificate
for a beneficial interest in Global Warrants held in book-entry form through the Depositary evidencing the same number of Warrants,
which request shall be in the form attached hereto as Exhibit 3 (a “Global Warrants Request Notice” and
the date of delivery of such Global Warrants Request Notice by the Holder, the “Global Warrants Request Notice Date”
and the surrender upon delivery by the Holder of the Warrants evidenced by Definitive Certificates for the same number of Warrants
evidenced by a beneficial interest in Global Warrants held in book-entry form through the Depositary, a “Global Warrants
Exchange”), the Company shall promptly effect the Global Warrants Exchange and shall promptly direct the Warrant Agent
to issue and deliver to the Holder Global Warrants for such number of Warrants in the Global Warrants Request Notice, which beneficial
interest in such Global Warrants shall be delivered by the Depositary’s Deposit or Withdrawal at Custodian system to the
Holder pursuant to the instructions in the Global Warrants Request Notice. In connection with a Global Warrants Exchange, the Company
shall direct the Warrant Agent to deliver the beneficial interest in such Global Warrants to the Holder within ten (10) Business
Days of the Global Warrants Request Notice pursuant to the delivery instructions in the Global Warrant Request Notice (“Global
Warrants Delivery Date”). If the Company fails for any reason to deliver to the Holder Global Warrants subject to the
Global Warrants Request Notice by the Global Warrants Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Global Warrants (based on the VWAP (as defined
in the Warrants) of the Common Stock on the Global Warrants Request Notice Date), $10 per Business Day for each Business Day after
such Global Warrants Delivery Date until such Global Warrants are delivered or, prior to delivery of such Global Warrants, the
Holder rescinds such Global Warrants Exchange. The Company covenants and agrees that, upon the date of delivery of the Global Warrants
Request Notice, the Holder shall be deemed to be the beneficial holder of such Global Warrants.

 

Section 4. Form
of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock (“Notice
of Exercise”) and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit 1
hereto.

 

Section 5. Countersignature
and Registration. The Warrant Certificates shall be executed on behalf of the Company by its Chief Executive Officer, Chief
Financial Officer or Vice President, by facsimile signature. The Warrant Certificates shall be countersigned by the Warrant Agent
by facsimile signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be such officer of the Company before countersignature by the Warrant
Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the person who signed such Warrant Certificate had not ceased to
be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual
date of the execution of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant Certificate, although
at the date of the execution of this Warrant Agreement any such person was not such an officer.

 

The Warrant Agent will
keep or cause to be kept, at one of its offices, or at the office of one of its agents, books for registration and transfer of
the Warrant Certificates issued hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant
Certificates, the number of warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant
Certificate. The Warrant Agent will create a special account for the issuance of Warrant Certificates.

 

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Section 6. Transfer,
Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With
respect to the Global Warrant, subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph
of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions the Company may
give to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the
Termination Date (as such term is defined in the Warrant Certificate), any Warrant Certificate or Warrant Certificates or Global
Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant Certificates
or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as the Warrant Certificate
or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring
to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant shall make such request in writing delivered
to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined
or exchanged at the principal office of the Warrant Agent, provided that no such surrender is applicable to the Holder of a Global
Warrant. Any requested transfer of Warrants, whether in book-entry form or certificate form, shall be accompanied by reasonable
evidence of authority of the party making such request that may be required by the Warrant Agent. Thereupon the Warrant Agent shall,
subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested. The Company may require payment from the Holder of a
sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination
or exchange of Warrant Certificates. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed upon by
the parties hereto and provided separately on the date hereof.

 

Upon receipt by the
Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate,
which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof
remaining, and, in case of loss, theft or destruction, of indemnity in customary form and amount (but shall not include the posting
of any bond by the Holder), and satisfaction of any other reasonable requirements established by Section 8-405 of the Uniform Commercial
Code as in effect in the State of Delaware, and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental
thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Company will make
and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of the Warrant Certificate
so lost, stolen, destroyed or mutilated.

 

Section 7. Exercise
of Warrants; Exercise Price; Termination Date.

 

(a) The Warrants
shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable and shall terminate and
become void as set forth in the Warrant Certificate. Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant
may exercise the Warrant in whole or in part upon surrender of the Warrant Certificate, if required, with the executed Notice of
Exercise and payment of the Exercise Price, which may be made, at the option of the Holder, by wire transfer or by certified or
official bank check in United States dollars, to the Warrant Agent at the principal office of the Warrant Agent or to the office
of one of its agents as may be designated by the Warrant Agent from time to time. In the case of the Holder of a Global Warrant,
the Holder shall deliver the executed Notice of Exercise and the payment of the Exercise Price as described herein. Notwithstanding
any other provision in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant
held in book-entry form through the Depositary (or another established clearing corporation performing similar functions), shall
effect exercises by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction
form for exercise, complying with the procedures to effect exercise that are required by the Depositary (or such other clearing
corporation, as applicable). The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with
the services provided under this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection
with the investment at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company
nor the Holders will receive interest on any deposits or Exercise Price. No ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. The Company
hereby acknowledges and agrees that, with respect to a holder whose interest in a Global Warrant is a beneficial interest in a
Global Warrant held in book-entry form through the Depositary (or another established clearing corporation performing similar functions),
upon delivery of irrevocable instructions to such holder’s Participant to exercise such warrants, that solely for purposes
of Regulation SHO that such holder shall be deemed to have exercised such warrants.

 

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(b) Upon receipt
of a Notice of Exercise for a Cashless Exercise the Company will promptly calculate and transmit to the Warrant Agent the number
of Warrant Shares issuable in connection with such Cashless Exercise and deliver a copy of the Notice of Exercise to the Warrant
Agent, which shall issue such number of Warrant Shares in connection with such Cashless Exercise.

 

(c) Upon the exercise
of the Warrant Certificate pursuant to the terms of Section 2 of the Warrant Certificate, the Warrant Agent shall cause the Warrant
Shares underlying such Warrant Certificate or Global Warrant to be delivered to or upon the order of the Holder of such Warrant
Certificate or Global Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant
Share Delivery Date (as such term is defined in the Warrant Certificate). If the Company is then a participant in the DWAC system
of the Depositary and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to
or resale of the Warrant Shares by Holder or (B) the Warrant is being exercised via Cashless Exercise, then the certificates for
Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of the Holder’s broker with
the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to pay any amounts to any
Holders pursuant to Section 2(d)(i) or 2(d)(iv) of the Warrant Certificate, such obligation shall be solely that of the Company
and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case of a Cashless
Exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate Exercise Price of
the Warrant Shares to be purchased upon exercise of such Holder’s Warrant as set forth in Section 7(a) hereof by the Warrant
Share Delivery Date, the Warrant Agent will not obligated to deliver such Warrant Shares (via DWAC or otherwise) until following
receipt of such payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part
thereof) until such payment is delivered to the Warrant Agent.

 

(d) The Warrant Agent
shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company maintained
with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company
via email at the end of each day on which notices of exercise are received or funds for the exercise of any Warrant are received
of the amount so deposited to its account.

 

Section 8. Cancellation
and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for
cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificate
shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver
to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant
Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in
such case shall deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation
requiring the Warrant Agent to retain such canceled certificates.

 

Section 9. Certain
Representations; Reservation and Availability of Shares of Common Stock or Cash.

 

(a) This Agreement
has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof
by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance
with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due authentication
thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement, constitute
valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled
to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

 

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(b) As of
the date hereof, the authorized capital stock of the Company consists of (i) Three Hundred Million (300,000,000) shares of
Common Stock, of which approximately 2,755,613 post-reverse split (27,556,121 pre-reverse split) shares of Common Stock are
issued and outstanding as of June 30, 2019, and 227,000 post-reverse split (2,270,000 pre-reverse split) shares of Common
Stock are reserved for issuance upon exercise of the Warrants, and (ii) One Hundred Million (100,000,000) shares of preferred
stock, par value $0.0001 per share, of which no shares are issued and outstanding. Except as disclosed in the Registration
Statement, there are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase from
the Company any class of capital stock of the Company.

 

(c) The Company covenants
and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Common Stock or its
authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 

(d) The Warrant Agent
will create a special account for the issuance of Common Stock upon the exercise of Warrants.

 

(e) The Company further
covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be
payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon
exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable
in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates
for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise
or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental
charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the
time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental
charge is due.

 

Section 10. Common
Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued (or to whose broker’s
account is credited shares of Common Stock through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed
to have become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated, the date
on which submission of the Notice of Exercise was made, provided that the Warrant Certificate evidencing such Warrant is duly surrendered
(but only if required herein) and payment of the Exercise Price (and any applicable transfer taxes) is received on or prior to
the Warrant Share Delivery Date; provided, however, that if the date of submission of the Notice of Exercise is a
date upon which the Common Stock transfer books of the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next succeeding day on which the Common Stock transfer books
of the Company are open.

 

Section 11. Adjustment
of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares
covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section
3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant
Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the
Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant
shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the shares contained in Section 3 of the Warrant Certificate and the provisions of Sections 7, 11 and 12 of this
Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All Warrants originally
issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant Certificate shall evidence
the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time to time hereunder
upon exercise of the Warrants, all subject to further adjustment as provided herein.

 

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Section 12. Certification
of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common
Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare
a certificate setting forth the Exercise Price of each Warrant as so adjusted, and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate
and (c) instruct the Warrant Agent to send a brief summary thereof to each Holder of a Warrant Certificate.

 

Section 13. Fractional
Shares of Common Stock.

 

(a) The Company shall
not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional
Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of
such fraction to the nearest whole Warrant (rounded down).

 

(b) The Company shall
not issue fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates which evidence fractional
shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed,
the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.

 

Section 14. Conditions
of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from
time to time of the Warrant Certificates shall be subject:

 

		(a)	Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent the
compensation detailed on Exhibit 4 hereto for all services rendered by the Warrant Agent and to reimburse the Warrant Agent
for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred without gross negligence or willful misconduct
finally adjudicated to have been directly caused by the Warrant Agent in connection with the services rendered hereunder by the
Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability
or expense incurred without gross negligence, or willful misconduct on the part of the Warrant Agent, finally adjudicated to have
been directly caused by Warrant Agent hereunder, including the reasonable costs and expenses of defending against any claim of
such liability. The Warrant Agent shall be under no obligation to institute or defend any action, suit, or legal proceeding in
connection herewith or to take any other action likely to involve the Warrant Agent in expense, unless first indemnified to the
Warrant Agent’s satisfaction. The indemnities provided by this paragraph shall survive the resignation or discharge of the
Warrant Agent or the termination of this Agreement. Anything in this Agreement to the contrary notwithstanding, in no event shall
the Warrant Agent be liable under or in connection with the Agreement for indirect, special, incidental, punitive or consequential
losses or damages of any kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if the Warrant
Agent has been advised of the possibility thereof and regardless of the form of action in which such damages are sought, and the
Warrant Agent’s aggregate liability to the Company, or any of the Company’s representatives or agents, under this Section
14(a) or under any other term or provision of this Agreement, whether in contract, tort, or otherwise, is expressly limited to,
and shall not exceed in any circumstances, one (1) year’s fees received by the Warrant Agent as fees and charges under this
Agreement, but not including reimbursable expenses previously reimbursed to the Warrant Agent by the Company hereunder.

 

		(b)	Agent for the Company. In acting under this Warrant Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligations or relationship
of agency or trust for or with any of the Holders of Warrant Certificates or beneficial owners of Warrants.

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		(c)	Counsel. The Warrant Agent may consult with counsel satisfactory to it, which may include
counsel for the Company, and the written advice of such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

 

		(d)	Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect
of any action taken or omitted by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit,
statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper
parties.

 

		(e)	Certain Transactions. The Warrant Agent, and its officers, directors and employees, may
become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant
Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of Holders of Warrant
Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant
Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture to which the Company is a party.

 

		(f)	No Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall
have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or
of the Warrant Certificates.

 

		(g)	No Liability for Invalidity. The Warrant Agent shall have no liability with respect to any
invalidity of this Agreement or the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon).

 

		(h)	No Responsibility for Representations. The Warrant Agent shall not be responsible for any
of the recitals or representations herein or in the Warrant Certificate (except as to the Warrant Agent’s countersignature
thereon), all of which are made solely by the Company.

 

		(i)	No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties
as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any
action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not,
in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the
use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of the proceeds of the Warrant Certificate. The Warrant Agent shall have
no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein
or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with
respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or
attempt to initiate any proceedings at law.

 

Section 15. Purchase
or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant
Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which
the Warrant Agent or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business
of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Warrant Agent under the provisions of Section 17. In case at the time such successor
Warrant Agent shall succeed to the agency created by this Agreement any of the Warrant Certificates shall have been countersigned
but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver
such Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned,
any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in
the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in
the Warrant Certificates and in this Agreement.

 

    9

     

    

 

In case at any time
the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver such Warrant Certificates so countersigned;
and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such
Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have
the full force provided in the Warrant Certificates and in this Agreement.

 

Section 16. Duties
of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company, by its acceptance hereof, shall be bound:

 

(a) The Warrant Agent
may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.

 

(b) Whenever in the
performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate
signed by the Chief Executive Officer, Chief Financial Officer or Vice President of the Company; and such certificate shall be
full authentication to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.

 

(c) Subject to the
limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence or willful misconduct,
or for a breach by it of this Agreement.

 

(d) The Warrant Agent
shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant
Certificate (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.

 

(e) The Warrant Agent
shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in
this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making
of any change in the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the
manner, method or amount of any such change or the ascertaining of the existence of facts that would require any such adjustment
or change (except with respect to the exercise of Warrants evidenced by the Warrant Certificates after actual notice of any adjustment
of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization
or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether
any shares of Common Stock will, when issued, be duly authorized, validly issued, fully paid and nonassessable.

 

(f) Each party hereto
agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying
out or performing by any party of the provisions of this Agreement.

 

    10

     

    

 

(g) The Warrant Agent
is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief Executive Officer,
Chief Financial Officer or Vice President of the Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without
gross negligence or willful misconduct.

 

(h) The Warrant Agent
and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

 

(i) The Warrant Agent
may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through
its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct
of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment thereof.

 

Section 17. Change
of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice
in writing sent to the Company and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates.
The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant
Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and to the Holders of the
Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant
Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by
the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of
a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed to be the Warrant Agent until a
new warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment,
the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally
named as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor
Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing
to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 17, or any defect
therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the
successor Warrant Agent, as the case may be.

 

Section 18. Issuance
of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock
or other securities or property purchasable under the several Warrant Certificates made in accordance with the provisions of this
Agreement.

 

    11

     

    

 

Section 19. Notices.
Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate
to or on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate
to or on the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate shall be deemed
given (a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal
Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the
fourth Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt
requested), and (d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at
or prior to 5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such
notice or communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m.
(New York City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):

 

		(a)	If to the Company, to:

 

Drone Aviation Holding Corp.

11651 Central Parkway, #118

Jacksonville, Florida 32224

Attention: Daniyel Erdberg

 

		(b)	If to the Warrant Agent, to:

 

ClearTrust,
LLC

16540
Pointe Village Dr., Suite 210

Lutz,
Florida 33558

 

For any notice delivered by email to be
deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next business
day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.

 

(c) If to the Holder
of any Warrant Certificate to the address of such Holder as shown on the registry books of the Company. Any notice required to
be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding
any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant, such notice
shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.

 

Section 20. Supplements
and Amendments.

 

(a) The Company and
the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global Warrants
in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrants or to surrender
any rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall
not adversely affect the interests of the Holders of the Global Warrants or Warrant Certificates in any material respect.

 

(b) In addition to
the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority of
the shares of Common Stock issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of
adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying
in any manner the rights of the Holders of the Global Warrants; provided, however, that no modification of the terms
(including but not limited to the adjustments described in Section 11) upon which the Warrants are exercisable or the rights of
holders of Warrants to receive liquidated damages or other payments in cash from the Company or reducing the percentage required
for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding Warrant Certificate
affected thereby; provided further, however, that no amendment hereunder shall affect any terms of any Warrant Certificate
issued in a Warrant Exchange. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall
deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment
complies with the terms of this Section 20.

 

    12

     

    

 

Section 21. Successors.
All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.

 

Section 22. Benefits
of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant
Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement. This Agreement shall be
for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 23. Governing
Law. This Agreement and each Warrant Certificate and Global Warrant issued hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

 

Section 24. Counterparts.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and the same instrument.

 

Section 25. Captions.
The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.

 

Section 26. Information.
The Company agrees to promptly provide to the Holders of the Warrants any information it provides to the holders of the Common
Stock, except to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities
and Exchange Commission.

 

[Signature page to follow]

 

    13

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	 	DRONE AVIATION HOLDING CORP.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	CLEARTRUST, LLC
	 	 	 
	 	By:	               
	 	Name: 	 
	 	Title: 	 

 

 

    14

     

    

 

Exhibit 1

 

Form of Warrant Certificate

 

[Insert Final Form of Warrant]

 

     

     

    

 

Exhibit 2

 

Form of Warrant Certificate Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

 

To: ClearTrust, LLC, as Warrant
Agent for Drone Aviation Holding Corp. (the “Company”)

 

The undersigned Holder of Common
Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive
a Warrant Certificate evidencing the Warrants held by the Holder as specified below:

 

		1.	Name of Holder of Warrants in form of Global Warrants: _____________________________

 

		2.	Name of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________

 

		3.	Number of Warrants in name of Holder in form of Global Warrants: ___________________

 

		4.	Number of Warrants for which Warrant Certificate shall be issued: __________________

 

		5.	Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate,
if any: ___________

 

		6.	Warrant Certificate shall be delivered to the following address:

 

______________________________

 

______________________________

 

______________________________

 

______________________________

 

The undersigned hereby acknowledges
and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to
have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced
by the Warrant Certificate.

 

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ____________________________________________________

 

Signature of Authorized Signatory of Investing
Entity: ______________________________

 

Name of Authorized Signatory: ________________________________________________

 

Title of Authorized Signatory: _________________________________________________

 

Date: _______________________________________________________________

 

     

     

    

Exhibit 3

Form of Global Warrant Request Notice

 

GLOBAL WARRANT REQUEST NOTICE

 

To: ClearTrust, LLC, as Warrant
Agent for Drone Aviation Holding Corp. (the “Company”)

 

The undersigned Holder of Common
Stock Purchase Warrants (“Warrants”) in the form of Warrants Certificates issued by the Company hereby elects
to receive a Global Warrant evidencing the Warrants held by the Holder as specified below:

 

		1.	Name of Holder of Warrants in form of Warrant Certificates: _____________________________

 

		2.	Name of Holder in Global Warrant (if different from name of Holder of Warrants in form of Warrant Certificates): ________________________________

 

		3.	Number of Warrants in name of Holder in form of Warrant Certificates: ___________________

 

		4.	Number of Warrants for which Global Warrant shall be issued: __________________

 

		5.	Number of Warrants in name of Holder in form of Warrant Certificates after issuance of Global Warrant,
if any: ___________

 

		6.	Global Warrant shall be delivered to the following address:

 

______________________________

 

______________________________

 

______________________________

 

______________________________

 

The undersigned hereby acknowledges
and agrees that, in connection with this Global Warrant Exchange and the issuance of the Global Warrant, the Holder is deemed to
have surrendered the number of Warrants in form of Warrant Certificates in the name of the Holder equal to the number of Warrants
evidenced by the Global Warrant.

 

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ____________________________________________________

 

Signature of Authorized Signatory of Investing
Entity: ______________________________

 

Name of Authorized Signatory: ________________________________________________

 

Title of Authorized Signatory: _________________________________________________

 

Date: _______________________________________________________________

 

     

     

    

 

Exhibit 4

 

Warrant Agent Fee ScheduleBlueprint

 

Exhibit 10.1

 

AZURRX BIOPHARMA, INC.

 

EMPLOYMENT
AGREEMENT

 

This
Employment
Agreement (this “Agreement”)
is made and entered into on October 8, 2019, effective as of
October 8, 2019 (the “Effective
Date”) by and between AzurRx Biopharma, Inc. (the
“Company”)
and James Sapirstein (“Executive”).
The Company and Executive are hereinafter collectively referred to
as the “Parties”,
and individually referred to as a “Party”.

 

Recitals

 

A.            

The Company desires
assurance of the association and services of Executive in order to
retain Executive’s experience, skills, abilities, background
and knowledge, and is willing to engage Executive’s services
on the terms and conditions set forth in this
Agreement.

 

B.            

Executive desires
to be in the employ of the Company, and is willing to accept such
employment on the terms and conditions set forth in this
Agreement.

 

Agreement

 

In
consideration of the foregoing Recitals and the mutual promises and
covenants herein contained, and for other good and valuable
consideration, the Parties, intending to be legally bound, agree as
follows:

 

1. Employment.

 

1.1 Title. Effective as of the Effective
Date, Executive’s position shall be President and Chief
Executive Officer, subject to the terms and conditions set forth in
this Agreement.

 

1.2 Term.
The term of this Agreement shall begin on the Effective Date and
shall continue for a period of three (3) years or until it is
terminated pursuant to Section 4 herein (the “Term”).

 

1.3 Duties.
Executive shall have the customary powers, responsibilities and
authorities of President and Chief Executive Officer of
corporations of the size, type and nature of the Company, as it
exists from time to time. Executive shall report to the
Company’s board of directors (the “Board”). The
principal place of business for the performance of
Executive’s duties to the Company hereunder shall be in
Executive’s home office located in Florida; provided, that,
Executive shall be required to travel (including, without
limitation, to the Company’s offices in Brooklyn, New York)
as reasonably necessary to perform his duties
hereunder.

 

1.4 Governing
Agreement. The employment relationship between the Parties
shall be governed by this Agreement.

 

1.5 Board
of Directors. Effective on the date of this Agreement, the
Board shall appoint Executive to the Board, and thereafter until
such time as Executive’s employment with the Company shall
terminate, the Board shall recommend that the Company’s
stockholders elect Executive to the
Board, to serve until the Company’s next annual meeting of
stockholders, or until his successor is duly elected and
qualified.

 

 

-1-

 

 

 

2. Loyalty;
Noncompetition; Nonsolicitation.

 

2.1 Loyalty. During Executive’s
employment by the Company, Executive shall devote substantially all
his business time to the performance of Executive’s duties
under this Agreement. Notwithstanding the foregoing, except as
otherwise agreed to in writing, Executive shall have the right to
perform such incidental services as are necessary in connection
with (a) his private passive investments, (b) his charitable or
community activities, (c) his participation in trade or
professional organizations, and (d) his service on the board of
directors (or comparable body) and/or commitees of any third-party
corporate entity that is not a Competitive Entity (as defined in
Section 2.3), so long as these activities do not materially
interfere with Executive’s duties hereunder and, with respect
to (d), except with respect to the boards of directors (or
comparable bodies) and/or commitees identified on Exhibit A, Executive obtains prior
Company consent, which consent will not be unreasonably withheld.
Executive may also provide limited services to other parties
provided that, except with respect to limited consulting services
(not to exceed ten hours per month during regular working hours)
provided to businesses that are not Competitive Entities, such
services are without remuneration.

 

2.2 Agreement
not to Participate in Company’s Competitors. During
the Term, Executive agrees not to acquire, assume or participate
in, directly or indirectly, any position, investment or interest
known by Executive to be adverse or antagonistic to the Company,
its business, or prospects, financial or otherwise, or in any
company, person, or entity that is, directly or indirectly, in
competition with the business of the Company or any of its
Affiliates (as defined below). Ownership by Executive, in
professionally managed funds over which the Executive does not have
control or discretion in investment decisions, or as a passive
investment, of less than five percent (5%) of the outstanding
shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or
publicly traded on a national securities exchange or in the
over-the-counter market shall not constitute a breach of this
Section. For purposes of this Agreement, “Affiliate,”
means, with respect to any specific entity, any other entity that,
directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such
specified entity.

 

2.3 Covenant
not to Compete. During the Term and for a period of twelve
(12) months thereafter (the “Restricted
Period”), Executive shall not engage in competition
with the Company and/or any of
its Affiliates, either directly or indirectly, in any manner or
capacity, as adviser, principal, agent, affiliate, promoter,
partner, officer, director, employee, stockholder, owner, co-owner,
consultant, or member of any association or otherwise, in any phase
of the business of researching and developing non-systemic
biologics for the treatment of patients with gastrointestinal
disorders (a “Competitive
Entity”), except with the prior written consent of the
Board.

 

2.4 Nonsolicitation.
During the Restricted Period, Executive shall not: (i) solicit
or induce, or attempt to solicit or induce, any employee of the
Company or its Affiliates to leave the employ of the Company or
such Affiliate; or (ii) solicit or attempt to solicit the business
of any client or customer of the Company or its Affiliates with
respect to products, services, or investments similar to those
provided or supplied by the Company or its Affiliates.

 

2.5 Acknowledgements.
Executive acknowledges and agrees that his services to the Company
pursuant to this Agreement are unique and extraordinary and that in
the course of performing such services Executive shall have access
to and knowledge of significant confidential, proprietary, and
trade secret information belonging to the Company. Executive agrees
that the covenant not to compete and the nonsolicitation
obligations imposed by this Section 2 are reasonable in duration,
geographic area, and scope and are necessary to protect the
Company’s legitimate business interests in its goodwill, its
confidential, proprietary, and trade secret information, and its
investment in the unique and extraordinary services to be provided
by Executive pursuant to this Agreement. If, at the time of
enforcement of this Section 2, a court holds that the covenant not
to compete and/or the nonsolicitation obligations described herein
are unreasonable or unenforceable under the circumstances then
existing, then the Parties agree that the maximum duration, scope,
and/or geographic area legally permissible under such circumstances
will be substituted for the duration, scope and/or area stated
herein.

 

 

-2-

 

 

 

3. Compensation
of the Executive.

 

3.1 Base Salary. The Company shall pay
Executive a base salary (the “Base
Salary”) at the annualized rate of Four Hundred and
Fifty Thousand Dollars ($450,000), less payroll deductions and all
required withholdings, payable in regular periodic payments in
accordance with the Company’s normal payroll practices. The
Base Salary shall be prorated for any partial year of employment on
the basis of a 365-day fiscal year. The Company may increase, but
not decrease (except for a proportional decrease in connection with
a Company-wide decrease in executive compensation, provided that
the in no event shall such decrease result in Executive’s
Base Salary being reduced to less than $425,000 on an annualized
basis), Executive’s Base Salary from time to time, and if so
increased, “Base Salary” shall include such increases
for purposes of this Agreement.

 

3.2 Bonuses.

 

3.2.1 At
the sole discretion of the Board or the compensation committee of
the Board (the “Compensation
Committee”), following each calendar year of
employment, Executive shall be eligible to receive an additional
cash bonus (the “Annual Milestone
Bonus”), which Annual Milestone Bonus shall be
targeted at forty percent (40%) of Executive’s Base Salary
(“Bonus
Target”). The Annual Milestone Bonus shall be based
(in whole or in part) on Executive’s attainment of certain
financial, clinical development, and/or business milestones (the
“Milestones”)
to be established annually by the Board or the Compensation
Committee (after considering Executive’s input with respect
to such Milestones). The Milestones, as well as the determination
of whether Executive has met the Milestones, and if so, whether the
Bonus Target or some lesser or greater amount shall be awarded,
shall be determined by the Board or the Compensation Committee in
its reasonable discretion. Any Annual Milestone Bonuses shall be
paid in cash to Executive in a single lump sum, which amount shall
be paid not later than the 75th day of the calendar
year following the calendar year in which such Annual Milestone
Bonus relates.

 

3.2.2 In
the event the Company enters into a license agreement (a
“License
Transaction”) with a third party during the Term with
respect to a product currently in development by the Company, or a
product developed by the Company during the Term, and the product
subject to such License Transaction constitutes all or
substantially all assets of the Company (together,
“Licensed
Product”), the Company shall pay to Executive a cash
bonus (a “License Transaction
Bonus”) in an amount equal to one percent (1%) of the
Net License Fees (as defined below) actually paid to the Company.
For purposes of this Section 3.2.2, “Net License
Fees” shall include actual amounts paid to the Company
by such third parties in connection with the license of such
Licensed Product, less any expense or other amounts paid or
otherwise due in connection with the collection or payment of such
amounts. The License Transaction Bonus shall be paid to Executive
within ten (10) business days of the date(s) such License Fees are
paid to the Company. For the avoidance of doubt, and subject to the
provisions in this Section 3.2.2, Executive shall be entitled to
earn the License Transaction Bonus with respect to each License
Transaction entered into during the Term.

 

3.2.3 In
the event a Change in Control (as defined in Section 4.6.4) is
consummated during the Term, the Company shall pay to Executive a
cash bonus (a “Change in Control
Bonus”) in an amount equal to one percent (1%) of the
Transaction Proceeds (as defined in Section 4.6.5). The Change in
Control Bonus shall be paid to the Executive on the date the Change
in Control is consummated; provided that any portion of the Change
in Control Bonus that is attributable to earn-outs, escrows and/or
holdbacks shall be paid to Executive when such amounts are actually
paid to the Company, the Company’s stockholders and/or
released, as applicable.

 

 

-3-

 

 

 

3.3 Restricted
Stock. On or as promptly as practicable following the
Effective Date, Executive shall be issued 200,000 shares of common
stock (the “Restricted
Shares”) pursuant to the Company’s Amended and
Restated 2014 Omnibus Equity Incentive Plan (the “Plan”),
which restricted shares shall vest as follows: (i) 100,000
Restricted Shares upon the first commercial sale in the United
States of MS1819, and (ii) 100,000 Restricted Shares upon the total
market capitalization of the Company exceeding $1.0 billion for 20
consecutive trading days, in each case subject to the earlier
determination of a majority of the Board. Notwithstanding the
foregoing to the contrary, in the event of a Change of Control, all
of the Restricted Shares shall vest in full. With respect to the
issuance of the Restricted Shares, in the event of any conflict
between this Agreement and the terms of the Plan and/or any award
agreement, the terms of this Agreement shall control.

 

3.4 Stock
Options. On or as promptly as practicable following the
Effective Date, Executive shall be issued 300,000 10-year stock
options (“Options”)
pursuant to the Plan, which Options shall vest as follows so long
as the Executive remains employed by the Company at such time: (i)
50,000 of such Options shall vest upon the Company initiating its
next Phase II clinical trial in the United States for MS1819 (i.e.,
upon the first individual enrolled in the trial), (ii) 50,000 of
such Options shall vest upon the Company completing its next Phase
II clinical trial in the United States for MS1819, (iii) 100,000 of
such Options shall vest upon the Company initiating a Phase III
clinical trial in the United States for MS1819, and (iv) 100,000 of
such Options shall vest upon the Company initiating a Phase I
clinical trial in the United States for any product other than
MS1819. Notwithstanding the foregoing to the contrary, in the event
of a Change of Control, all Options issued to Executive shall vest
in full. The Options shall be exercisable at a price per share of
the Company’s common stock on the day this Agreement is
entered into. In the event of any conflict between this Agreement
and the terms of the Plan and/or any award agreement, the terms of
this Agreement shall control. In addition, the Executive may elect
to exercise some or all of the Options by making a net exercise, in
which case the Company shall issue to the Executive a number of
shares of unencumbered common stock of the Company equal to: (x)
the total number of shares underlying the portion of the Option
being exercised less (y) the number of shares whose fair market
value is equal to the sum of (A) the exercise price of the Options
being exercised, plus (B) any required tax withholding amounts in
respect of such exercise. In the event Executive’s employment
is terminated under the provisions of Sections 4.5.3 or 4.5.4
hereof, all vested Options will remain exercisable for a period of
twelve (12) months following termination.

 

3.5 Expense
Reimbursements. The Company will reimburse Executive for all
reasonable business expenses Executive incurs in conducting his
duties hereunder (including, without limitation, travel to the
Company’s offices in New York), pursuant to the
Company’s usual expense reimbursement policies, but in no
event later than ninety (90) days after the end of the calendar
month following the month in which such expenses were incurred by
Executive; provided that Executive supplies the appropriate
substantiation for such expenses no later than the end of the
calendar month following the month in which such expenses were
incurred by Executive.

 

3.6 Changes
to Compensation. As described above, Executive’s
compensation will be reviewed at least on an annual basis and the
Base Salary may be increased, but not decreased (except for a
proportional decrease in connection with a Company-wide decrease in
executive compensation, provided that the in no event shall
Executive’s Base Salary be reduced to a rate below $425,000
on an annualized basis), from time to time in the Company’s
sole discretion.

 

 

-4-

 

 

 

3.7 Employment
Taxes. All of Executive’s compensation shall be
subject to customary withholding taxes and any other employment
taxes as are commonly required to be collected or withheld by the
Company.

 

3.8 Benefits.
The Executive shall, in accordance with Company policy and the
applicable plan documents, be eligible to participate in benefits
under any benefit plan or arrangement, including medical, dental,
vision, disability and life insurance programs, that may be in
effect from time to time and made available to the Company’s
senior management employees, subject to the terms and conditions of
those benefit plans.

 

3.9 Holidays
and Vacation. Executive shall receive twenty (20) days of
paid vacation per calendar year, which cannot be taken in one
increment, but which shall accrue if not used in any calendar year
but only up to a maximum of ten (10) days, and be paid to Executive
or carried forward to subsequent calendar years consistent with
Company policy. In addition to such paid vacation, Executive shall
receive all paid Company holidays in the United States in
accordance with Company policy.

 

4. Termination.

 

4.1 Termination by the Company.
Executive’s employment with the Company is at will and may,
subject to the terms of Section 4.5, be terminated by the Company
at any time and for any reason, or for no reason, including, but
not limited to, under the following conditions:

 

4.1.1 Termination
by the Company for Cause. The Company may terminate
Executive’s employment under this Agreement for Cause (as
defined in Section 4.6.2) by delivery of written notice to
Executive. Any notice of termination given pursuant to this Section
4.1.1 shall effect termination as of the date of the notice, or as
of such other later date as specified in the notice. In the event
of a termination of Executive’s employment for Cause,
Executive shall only be entitled to the compensation and/or
benefits set forth in Section 4.5 below, and shall not be entitled
to any other compensation and/or benefits as a result of the
termination of such employment prior to expiration of the
Term.

 

4.1.2 Termination
by the Company without Cause. The Company may terminate
Executive’s employment under this Agreement without Cause by
delivery of written notice to the Executive, at any time and for
any reason, or for no reason. Such termination shall be effective
on the date of such notice, or such later date otherwise specified
by the Company in the notice.

 

4.2 Termination
by Resignation of Executive. Executive’s employment
with the Company is at will and may be terminated by Executive at
any time and for any reason, or for no reason, including via a
resignation for Good Reason (as defined in Section 4.6.3) in
accordance with the procedures set forth in Section 4.6.3
below.

 

4.3 Termination
for Death or Complete Disability. Executive’s
employment with the Company shall automatically terminate effective
upon the date of Executive’s death or Complete Disability (as
defined in Section 4.6.1).

 

4.4 Termination
by Mutual Agreement of the Parties. Executive’s
employment with the Company may be terminated at any time upon a
mutual agreement in writing of the Parties. Any such termination of
employment shall have the consequences specified in such
agreement.

 

 

-5-

 

 

 

4.5 Compensation
Upon Termination.

 

4.5.1 Death
or Complete Disability. If, during the Term of this
Agreement, Executive’s employment shall be terminated by
death or Complete Disability, the Company shall pay to Executive,
his estate, or his heirs, as applicable, (i) any Base Salary owed
to Executive through the date of termination; (ii) expenses
reimbursement amounts owed to Executive; (iii) all unpaid amounts
of any Annual Milestone Bonus(es) Executive earned prior to the
termination date; (iv) all unpaid amounts of any Licence
Transaction Bonus(es) respect to any License Transcation(s)
consummated prior to the termination date; (v) all unpaid amounts
of any Change in Control Bonus respect to any Change in Control
consummated prior to the termination date; (vi) a cash lump sum in
respect to accrued and unused vacation benefits earned through the
date of termination at the rate in effect at the time of
termination; (vii) any payments and benefits to which Executive (or
his estate) is entitled pursuant to the terms of any employee
benefit or compensation plan or program in which he participates
(or participated); and (viii) any amount to which Executive is
entitled pursuant to any other written agreements between the
Company or any of its affiliates and Executive (the amounts in (i)
through (viii) above being the “Termination
Amounts”). The Company shall pay Executive: (A) the
amounts contained in items (i), (ii), (iii) and (vi) within ten
(10) days following such termination; (B) any payments associated
with item (vii) in accordance to the terms of such plans or
programs; (C) any such amounts in item (viii) in accordance with
the terms of such agreements, and (D) any amounts contained in (iv)
and (v), on such date(s) that such payments would have been made
pursuant to Section 3.2.3 and/or 3.2.3 (as applicable) if Executive
had remained employed by the Company, with all such Termination
Amounts being subject to the standard deductions and withholdings
(as applicable). In addition, subject to Executive (or his estate
or heirs, as applicable) furnishing to the Company an executed
waiver and release of claims in the form attached hereto as
Exhibit B (the
“Release”),
Executive, his estate, or his heirs, as applicable, shall also be
entitled to: (1) continuation of Executive’s salary (at the
Base Salary rate in effect at the time of termination) for a period
of ninety (90) days following the termination date; and (2) a
prorated annual bonus equal to the Target Annual Milestone Bonus,
multiplied by a fraction, the numerator of which shall be the
number of full and partial months Executive worked for the Company
and the denominator of which shall be 12 (the “ProRated Target Milestone
Bonus”). The Base Salary payments will be subject to
standard payroll deductions and withholdings and will be made on
the Company’s regular payroll cycle, commencing on the
Company’s first regular pay date following the sixtieth
(60th) day
after the termination date, provided that the first such
installment of the Base Salary continuation payments shall be a
lump sum payment equal to the amount of all Base Salary payments
due from the termination date through the date of such first
installment payment. The ProRated Target Milestone Bonus will be
subject to standard payroll deductions and withholdings and will
paid on the Company’s next regular paydate following the
60th day
following the termination date.

 

4.5.2 Termination For Cause or Resignation without
Good Reason. If, during the Term of this Agreement,
Executive’s employment is terminated by the Company for
Cause, or Executive resigns his employment hereunder without Good
Reason, the Company shall pay
Executive the Termination Amounts (on the dates set forth in
Section 4.5.1 with respect to payments of the Termination Amounts),
less standard deductions and withholdings. The Company shall
thereafter have no further obligations to Executive under this
Agreement, except as otherwise provided by law.

 

 

 

-6-

 

 

 

4.5.3 Termination
Without Cause or Resignation For Good Reason Not In Connection with
a Change of Control. If the Company terminates
Executive’s employment without Cause, or if Executive resigns
for Good Reason, at any time other than upon the occurrence of, or
within ninety (90) days prior to, or six (6) months following, the
effective date of a Change of Control, the Company shall pay
Executive the Termination Amounts (on the dates set forth in
Section 4.5.1 with respect to payments of the Termination Amounts),
less standard deductions and withholdings. In addition, subject to
Executive furnishing to the Company the executed Release, Executive
shall be entitled to: (1) severance in the form of continuation of
his salary (at the Base Salary rate in effect at the time of
termination, but prior to any reduction triggering Good Reason) for
a period of twelve (12) months following the termination date; (2)
payment of Executive’s premiums to cover COBRA for a period
of twelve (12) months following the termination date; (3) the
ProRated Target Annual Milestone Bonus; and (4) immediate
accelerated vesting of any unvested Restricted Shares and unvested
outstanding Option(s). The payments under (1) and (2) above will be
subject to standard payroll deductions and withholdings and will be
made on the Company’s regular payroll cycle, commencing on
the Company’s first regular pay date following the sixtieth
(60th) day
after the termination date, provided that the first installment of
such payments shall be made in a lump sum payment equal to the
amount of all such payments due from the termination date through
the date of such first installment payment. The ProRated Annual
Milestone Bonus under clause (3) will be made in a lump sum on the
Company’s next regular pay date following the 60th day after the
termination date.

 

4.5.4 Termination
Without Cause or Resignation For Good Reason In Connection with a
Change of Control. If the Company terminates
Executive’s employment without Cause, or if Executive resigns
for Good Reason, upon the occurrence of, or within sixty (60) days
prior to, or within six (6) months following, the effective date of
a Change of Control, the Company shall pay Executive the
Termination Amounts (on the
dates set forth in Section 4.5.1 with respect to payments of the
Termination Amounts), less standard deductions and withholdings. In
addition, subject to Executive furnishing to the Company the
executed Release, Executive shall be entitled to: (1) severance in
the form of a lump sum payment equivalent to eighteen (18) months
of his Base Salary (at the Base Salary rate in effect at the time
of termination, but prior to any reduction triggering Good Reason);
(2) payment of Executive’s premiums to cover COBRA for a
period of eighteen (18) months following the termination date; (3)
the ProRated Target Annual Bonus; (4) immediate accelerated vesting
of any unvested Restricted Shares and unvested outstanding stock
option(s); and (5) if a License Transaction and/or a Change in
Control is consummated within the six (6) month period following
the termination date, the License Transaction Bonus and/or the
Change in Control Bonus, as applicable. The payments under items
(1), (2) and (3) will be subject to standard payroll deductions and
withholdings and will be made on the Company’s regular
payroll cycle following the sixtieth (60th) day after the
termination date. The License Transaction Bonus and/or the Change
in Control Bonus (less applicable withholdings and deductions), as
applicable, set forth in (5) above, shall be paid in accordance on
such date(s) that such payments would have been made pursuant to
Section 3.2.2 and/or 3.2.3 (as applicable) if Executive had
remained employed by the Company.

 

4.6 Definitions.
For purposes of this Agreement, the following terms shall have the
following meanings:

 

4.6.1 Complete
Disability. “Complete
Disability” means that Executive is determined to be
permanently disabled pursuant to the Company’s long term
disability plan and is receiving disability benefits under such
plan.

 

 

-7-

 

 

 

4.6.2 Cause.
“Cause” for
the Company to terminate Executive’s employment hereunder
shall mean the occurrence of any of the following events, as
determined by the Company and/or the Board in its and/or their sole
and absolute discretion:

 

(i) The willful
failure, willful disregard or willful refusal by Executive to
perform his material duties or obligations under this Agreement or
to follow lawful directions received by Executive from the
Board;

 

(ii) Any
grossly negligent act by Executive having the effect of materially
injuring (whether financially or otherwise) the business or
reputation of the Company or any willful act by Executive intended
to cause such material injury, except any acts (A) made by
Executive in connection with the enforcement of his rights, whether
under this Agreement, any other agreement between the Company or
any affiliate and Executive, or pursuant to applicable law (e.g.
disparagement, etc.) or (B) which are required by law or pursuant
to a subpoena or demand by a governmental or regulatory
body;

 

(iii) Executive’s
indictment of any felony involving moral turpitude (including entry
of a nolo contendere
plea);

 

(iv) The
determination, after a reasonable and good-faith investigation by
the Company, that the Executive engaged in discrimination
prohibited by law (including, without limitation, age, sex or race
discrimination);

 

(v) Executive’s
material misappropriation or embezzlement of the property of the
Company or its Affiliates (whether or not a misdemeanor or felony);
or

 

(vi) Material
breach by Executive of this Agreement and/or of his Proprietary
Information and Inventions Agreement (“PIIA”);
provided, however, that, any such termination of Executive shall
only be deemed for Cause pursuant to this definition if: (1) the
Company gives the Executive written notice of the condition(s)
alleged to constitute Cause, which notice shall describe such
condition(s); and (2) the Executive fails to remedy such
condition(s) (if curable) within thirty (30) days following receipt
of the written notice.

 

For
purposes of this definition, the Parties agree that any breach of
Sections 2.2, 2.3, 2.5 or 5 of this Agreement shall be deemed a
material breach that is not capable of cure by
Executive.

 

4.6.3 Good Reason. For purposes of this
Agreement, and subject to the caveat at the end of this Section,
“Good
Reason” for Executive to terminate his employment
hereunder shall mean the occurrence of any of the following events
without Executive’s prior written consent:

 

(i)           

any reduction by
the Company of Executive’s Base Salary as initially set forth
herein or as the same may be increased from time to time, provided,
however, that if such reduction is a proportional reduction in
connection with a Company-wide decrease in executive compensation
and such decrease does not result in Executive’s Base Salary
being less than $425,000 on an annualized basis , such reduction
shall not constitute Good Reason for Executive to terminate his
employment;

 

(ii)           

a material breach
by the Company (or any of its Affiliates) of this Agreement or any
other written agreement between the Company or any of its
Affiliates and Executive, provided such written agreement was
approved by the Board of Directors or the Compensation
Committee;

 

 

 

 

-8-

 

 

 

(iii)

a material adverse
change in Executive’s duties, titles, authority,
responsibilities or reporting relationships, with such
determination being made with reference to the greatest extent of
Executive’s duties, titles, authority, responsibilities or
reporting relationships, etc. as increased (but not decreased) from
time to time;

 

(iv)           

any failure of the
Company or any Affiliate to pay Executive any amount owed to
Executive under this Agreement or any other written agreement plan
or program between the Company, any affiliates and
Executive;

 

(v)           

any reduction in
Executive’s bonus eligibility;

 

(vi)           

a relocation of the
Executive’s principal place a business to for the performance
of his duties hereunder;

 

(vii)

the assignment
to Executive of
duties materially inconsistent with his position with the
Company;

 

(viii)

the Board of
Directors shall fail to recommend that stockholders elect Executive to the Board of
Directors.

 

Provided, however, that, any such termination by the
Executive shall only be deemed for Good Reason pursuant to this
definition if: (1) the Executive gives the Company written
notice of his intent to terminate for Good Reason; (2) the Company
fails to remedy such condition(s) within thirty (30) days following
receipt of the written notice the “Cure Period”);
and (3) Executive voluntarily terminates his employment within
thirty (30) days following the end of the Cure Period.

 

4.6.4                      
Change of Control. For
purposes of this Agreement, “Change of Control” shall
mean the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events
(excluding in any case transactions in which the Company or its
successors issues securities to investors primarily for capital
raising purposes):

 

(i)           

the acquisition by
a third party (or more than one party acting as a group) of
securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then
outstanding securities other than by virtue of a merger,
consolidation or similar transaction;

 

(ii)           

a merger,
consolidation or similar transaction following which the
stockholders of the Company immediately prior thereto do not own at
least fifty percent (50%) of the combined outstanding voting power
of the surviving entity (or that entity’s parent) in such
merger, consolidation or similar transaction;

 

(iii)           

the dissolution or
liquidation of the Company; or

 

(iv)           

the sale, lease,
exclusive license or other disposition of all or substantially all
of the assets of the Company.

 

4.6.5                      Transaction
Proceeds. “Transaction
Proceeds” means the aggregate consideration actually
actually paid to the Company’s stockholders in connection
with a Change in Control with respect to their equity interest in
the Company. Any consideration retained in escrow or as a hold back
and any earn out consideration shall not be included in the
“Transaction
Proceeds” until such consideration
retained in escrow or as a hold back any such earn out
consideration is actually paid. If all or a portion of the
consideration paid in a Change in Control transaction is other than
cash, then the value of such non-cash consideration shall be the
fair market value thereof on the date the Change in Control
transaction is consummated as determined in good faith by the
Board. If the Change in Control transaction involves a sale of all
or substantially all of the assets of the Company followed by a
liquidation and dissolution of the Company, then the Transaction
Proceeds shall mean the aggregate amount distributed to the
Company’s stockholders in connection with such liquidation
and dissolution.

 

 

-9-

 

 

 

4.7 Survival
of Certain Sections. Sections 3, 4, 5, 6, 7, 8, 9, 12, 13,
16, 17, 19 and 21 of this Agreement will survive the termination of
this Agreement.

 

4.8 Parachute
Payment. If any payment or benefit the Executive would
receive pursuant to this Agreement (“Payment”)
would (i) constitute a “Parachute
Payment” within
the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”),
and (ii) be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise
Tax”), then the Executive shall be entitled to receive
an additional payment from the Company (the “Gross-Up
Payment”) in an amount such that the net amount of
such additional payment retained by the Executive, after payment of
all federal, state and local income and employment and Excise Taxes
imposed on the Gross-Up Payment, shall be equal to the Excise Tax
imposed on the Payment. The Company shall pay Executive the
Gross-Up Payment as soon as practicable following the date
Executive’s right to the applicable Payment is triggered, but
in no event will the Company make such Gross-Up Payment later than
the time required by the rules governing Section 409A, including,
but not limited to, Treasury Regulation
1.409A-3(i)(1)(v).

 

Unless
Executive and the Company agree on an alternative accounting, law
or consulting firm, the accounting firm then engaged by the Company
for general tax compliance purposes shall perform the Gross-Up
Payment calculations. If the accounting firm so engaged by the
Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall
appoint a nationally recognized accounting, law or consulting firm
to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such
accounting, law or consulting firm required to be made
hereunder.

 

The
Company shall use commercially reasonable efforts such that the
accounting, law or consulting firm engaged to make the
determinations hereunder shall provide its calculations, together
with detailed supporting documentation, to Executive and the
Company within fifteen (15) calendar days after the date on which
Executive’s right to a Payment is triggered (if requested at
that time by the Executive or the Company) or such other time as
requested by the Executive or the Company.

 

4.9 Application
of Internal Revenue Code Section 409A. Notwithstanding
anything to the contrary set forth herein, any payments and
benefits, other than the Termination Amounts, provided under
Section 4.5 of this Agreement (the “Severance
Benefits”) that constitute “deferred
compensation” within the meaning of Section 409A of the Code
and the regulations and other guidance thereunder and any state law
of similar effect (collectively “Section 409A”)
shall not commence in connection with Executive’s termination
of employment unless and until Executive has also incurred a
“separation from service” (as such term is defined in
Treasury Regulation Section 1.409A-1(h) (“Separation From
Service”), unless the Company reasonably determines
that such amounts may be provided to Executive without causing
Executive to incur the additional 20% tax under Section
409A.

 

 

-10-

 

 

 

It is
intended that each installment of the Severance Benefits payments
provided for in this Agreement is a separate “payment”
for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For
the avoidance of doubt, it is intended that payments of the
Severance Benefits set forth in this Agreement satisfy, to the
greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulation Sections
1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the
Company (or, if applicable, the successor entity thereto)
determines that the Severance Benefits constitute “deferred
compensation” under Section 409A and Executive is, on the
termination of service, a “specified employee” of the
Company or any successor entity thereto, as such term is defined in
Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax
consequences under Section 409A, the timing of the Severance
Benefit payments shall be delayed until the earlier to occur of:
(i) the date that is six months and one day after Executive’s
Separation From Service, or (ii) the date of Executive’s
death (such applicable date, the “Specified Employee Initial
Payment Date”), the Company (or the successor entity
thereto, as applicable) shall (A) pay to Executive a lump sum
amount equal to the sum of the Severance Benefit payments that
Executive would otherwise have received through the Specified
Employee Initial Payment Date if the commencement of the payment of
the Severance Benefits had not been so delayed pursuant to this
Section and (B) commence paying the balance of the Severance
Benefits in accordance with the applicable payment schedules set
forth in this Agreement.

 

Notwithstanding
anything to the contrary set forth herein, Executive shall receive
the Severance Benefits described above, if and only if Executive
duly executes and returns to the Company within the applicable time
period set forth therein, but in no event more than forty-five (45)
days following Separation from Service, the Release and permits the
release of claims contained therein to become effective in
accordance with its terms. Notwithstanding any other payment
schedule set forh in this Agreement, none of the Severance Benefits
will be paid or otherwise delivered prior to the effective date of
the Release. Except to the extent that payments pursuant to Section
4.5 may be delayed until the Specified Employee Initial Payment
Date pursuant to the preceding paragraph, on the first regular
payroll pay day following the effective date of the Release, the
Company will pay Executive the Severance Benefits Executive would
otherwise have received under the Agreement on or prior to such
date but for the delay in payment related to the effectiveness of
the Release, with the balance of the Severance Benefits being paid
as originally scheduled. All amounts payable under the Agreement
will be subject to standard payroll taxes and
deductions.

 

All
reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of
Section 409A to the extent that such reimbursements or in-kind
benefits are subject to Section 409A. All reimbursements for
expenses paid pursuant hereto that constitute taxable income to
Executive shall in no event be paid later than the end of the
calendar year next following the calendar year in which Executive
incurs such expense or pays such related tax. Unless otherwise
permitted by Section 409A, the right to reimbursement or in-kind
benefits under this Agreement shall not be subject to liquidation
or exchange for another benefit and the amount of expenses eligible
for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, respectively, in any other taxable
year.

 

5. Confidential
And Proprietary Information.

 

As a
condition of employment Executive agrees to execute and abide by
the PIIA.

 

 

-11-

 

 

 

6. Assignment
and Binding Effect.

 

This
Agreement shall be binding upon and inure to the benefit of
Executive and Executive’s heirs, executors, personal
representatives, assigns, administrators and legal representatives.
Because of the unique and personal nature of Executive’s
duties under this Agreement, neither this Agreement nor any rights
or obligations under this Agreement shall be assignable by
Executive. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors, assigns and legal
representatives. Any such successor of the Company will be deemed
substituted for the Company under the terms of this Agreement for
all purposes. For this purpose, “successor” means any
person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or
indirectly acquires all or substantially all of the assets or
business of the Company.

 

7. Notices.

 

All
notices or demands of any kind required or permitted to be given by
the Company or Executive under this Agreement shall be given in
writing and shall be personally delivered (and receipted for) or
faxed during normal business hours or mailed by certified mail,
return receipt requested, postage prepaid, addressed as
follows:

 

If
to the Company:

 

AzurRx
BioPharma, Inc.

 

760
Parkside Avenue

Downstate
Biotechnology Incubator, Suite 304

Brooklyn,
New York 11226

(646)
699-7855

Attn:
CEO and Board of Directors

 

If
to Executive: To the most recent address set forth in
Executive’s personnel file.

 

Any
such written notice shall be deemed given on the earlier of the
date on which such notice is personally delivered or three (3) days
after its deposit in the United States mail as specified above.
Either Party may change its address for notices by giving notice to
the other Party in the manner specified in this
Section.

 

8. Choice
of Law.

 

This
Agreement shall be construed and interpreted in accordance with the
internal laws of the State of New York without regard to its
conflict of laws principles.

 

9. Integration.

 

This
Agreement, including Exhibit A,
Exhibit B and the PIIA, contains the complete, final and
exclusive agreement of the Parties relating to the terms and
conditions of Executive’s employment and the termination of
Executive’s employment, and supersedes all prior and
contemporaneous oral and written employment agreements or
arrangements between the Parties.

 

10. Amendment.

 

This
Agreement cannot be amended or modified except by a written
agreement signed by Executive and the Company.

 

 

-12-

 

 

 

11. Waiver.

 

No
term, covenant or condition of this Agreement or any breach thereof
shall be deemed waived, except with the written consent of the
Party against whom the wavier is claimed, and any waiver or any
such term, covenant, condition or breach shall not be deemed to be
a waiver of any preceding or succeeding breach of the same or any
other term, covenant, condition or breach.

 

12. Severability.

 

The
finding by a court of competent jurisdiction of the
unenforceability, invalidity or illegality of any provision of this
Agreement shall not render any other provision of this Agreement
unenforceable, invalid or illegal. Such court shall have the
authority to modify or replace the invalid or unenforceable term or
provision with a valid and enforceable term or provision, which
most accurately represents the Parties’ intention with
respect to the invalid or unenforceable term, or
provision.

 

13. Interpretation;
Construction.

 

The
headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this
Agreement. This Agreement has been drafted by legal counsel
representing the Company, but the Executive has been encouraged to
consult with, and has consulted with, Executive’s own
independent counsel and tax advisors with respect to the terms of
this Agreement. The Parties acknowledge that each Party and its
counsel has reviewed and revised, or had an opportunity to review
and revise, this Agreement, and any rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this
Agreement.

 

14. Representations
and Warranties.

 

Executive
represents and warrants that Executive is not restricted or
prohibited, contractually or otherwise, from entering into and
performing each of the terms and covenants contained in this
Agreement, and that Executive’s execution and performance of
this Agreement will not violate or breach any other agreements
between the Executive and any other person or entity.

 

15. Counterparts.

 

This
Agreement may be executed in two counterparts, each of which shall
be deemed an original, all of which together shall contribute one
and the same instrument. Signatures to this Agreement transmitted
by fax, by email in “portable document format”
(“.pdf”) or by any other electronic means intended to
preserve the original graphic and pictorial appearance of this
Agreement shall have the same effect as physical delivery of the
paper document bearing original signature.

 

 

 

-13-

 

 

 

16. Arbitration.

 

To
ensure the rapid and economical resolution of disputes that may
arise in connection with the Executive’s employment with the
Company, Executive and the Company agree that any and all disputes,
claims, or causes of action, in law or equity, arising from or
relating to Executive’s employment, or the termination of
that employment, will be resolved, to the fullest extent permitted
by law, by final, binding and confidential arbitration pursuant to
the Federal Arbitration Act in New York, New York conducted by the
Judicial Arbitration and Mediation Services/Endispute, Inc.
(“JAMS”),
or its successors, under the then current rules of JAMS for
employment disputes; provided that the arbitrator shall: (a) have
the authority to compel adequate discovery for the resolution of
the dispute and to award such relief as would otherwise be
permitted by law; and (b) issue a written arbitration decision
including the arbitrator’s essential findings and conclusions
and a statement of the award. Accordingly, Executive and the
Company hereby waive any right to a jury trial. Both Executive and
the Company shall be entitled to all rights and remedies that
either Executive or the Company would be entitled to pursue in a
court of law. The Company shall pay any JAMS filing fee and shall
pay the arbitrator’s fee. The arbitrator shall have the
discretion to award attorneys fees to the party the arbitrator
determines is the prevailing party in the arbitration. Nothing in
this Agreement is intended to prevent either Executive or the
Company from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.
Notwithstanding the foregoing, Executive and the Company each have
the right to resolve any issue or dispute involving confidential,
proprietary or trade secret information, or intellectual property
rights, by Court action instead of arbitration.

 

17. Indemnification.

 

The
Company shall defend and indemnify Executive in his capacity as
President and Chief Executive Officer of the Company to the fullest
extent permitted under the Delaware General Corporation Law
(“DGCL”). The Company shall also maintain a policy for
indemnifying its officers and directors, including but not limited
to the Executive, for all actions permitted under the DGCL taken in
good faith pursuit of their duties for the Company, including but
not limited to maintaining an appropriate level of Directors and
Officers Liability coverage and maintaining the inclusion of such
provisions in the Company’s by-laws or articles of
incorporation, as applicable and customary. The rights to
indemnification shall survive any termination of this
Agreement.

 

18. Trade
Secrets Of Others.

 

It is
the understanding of both the Company and Executive that Executive
shall not divulge to the Company and/or its subsidiaries any
confidential information or trade secrets belonging to others,
including Executive’s former employers, nor shall the Company
and/or its Affiliates seek to elicit from Executive any such
information. Consistent with the foregoing, Executive shall not
provide to the Company and/or its Affiliates, and the Company
and/or its Affiliates shall not request, any documents or copies of
documents containing such information.

 

19. Advertising
Waiver.

 

Executive agrees to
permit the Company, and persons or other organizations authorized
by the Company, to use, publish and distribute advertising or sales
promotional literature concerning the products and/or services of
the Company, or the machinery and equipment used in the provision
thereof, in which Executive’s name and/or pictures of
Executive taken in the course of Executive’s provision of
services to the Company appear. Executive hereby waives and
releases any claim or right Executive may otherwise have arising
out of such use, publication or distribution.

 

20.
NO
MITIGATION.

 

Executive shall not
be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or
otherwise after the termination of his employment hereunder, and
any amounts earned by Executive, whether from self-employment, as a
common-law employee or otherwise, shall not reduce the amount of
any payment otherwise payable to him.

 

[signature page follows]

 

 

-14-

 

 

 

In Witness
Whereof, the Parties have executed this Agreement as of the
date first above written.

 

AzurRx Biopharma, Inc.

 

By:
/s/ Edward
Borkowski

 

Name:
Edward Borkowski

 

Its:
Chairman

 

Dated:
10/8/2019

 

Executive:

 

/s/ James
Sapirstein

James Sapirstein

 

Dated:
10/8/2019

 

 

 

 

 

 

 

 

 

-15-

 

 

EXHIBIT B

 

RELEASE AND WAIVER OF CLAIMS

 

TO BE SIGNED ON OR FOLLOWING THE SEPARATION DATE ONLY

 

In
consideration of the payments and other benefits set forth in the
Employment Agreement effective as of October 8, 2019, to which this
form is attached, I, James Sapirstein, hereby furnish AzurRx Biopharma,
Inc. (the “Company”),
with the following release and waiver (“Release and
Waiver”).

 

In exchange for the consideration provided to me
by the Employment Agreement that I am not otherwise entitled to
receive, I hereby generally and completely release the
Company and its current and former directors, officers, employees,
stockholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates,
and assigns (collectively, the “Released
Parties”) from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring
prior to or on the date that I sign this Agreement (collectively,
the “Released
Claims”). Except as provided below, the Released
Claims include, but are not limited to: (a) all claims arising
out of or in any way related to my employment with the Company, or
the termination of that employment; (b) all claims related to
my compensation or benefits from the Company including salary,
bonuses, commissions, vacation pay, expense reimbursements,
severance pay, fringe benefits, stock, stock options, or any other
ownership interests in the Company; (c) all claims for breach
of contract, wrongful termination, and breach of the implied
covenant of good faith and fair dealing; (d) all tort claims,
including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal,
state, and local statutory claims, including claims for
discrimination, harassment, retaliation, misclassification,
attorneys’ fees, or other claims arising under the federal
Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (the “ADEA”), the
fair employment practices statutes of the state or states in which
I have provided services to the Company and/or any other federal,
state or local law, regulation or other requirement.
Notwithstanding the foregoing, the following are not included in
the Released Claims (the “Excluded
Claims”): (a) any rights or claims under the
Agreement or any other written agreement between the Company and
me, including any stock option award agreement or plan, (b) any
rights or claims that may arise as a result of events occurring
after the date this Release and Waiver is executed or which
otherwise cannot lawfully be waived, (c) any indemnification rights
I may have as a former officer or director of the Company or its
subsidiaries or affiliated companies, including any rights or
claims for indemnification I may have pursuant to any written
indemnification agreement with the Company to which I am a party,
the charter, bylaws, or operating agreements of the Company, or
under applicable law; (d) any claims for benefits under any
directors’ and officers’ liability policy maintained by
the Company or its subsidiaries or affiliated companies in
accordance with the terms of such policy, (e) any rights or claims
under any employee benefit or compensation plan or program in which
I participate or participated (or was eligible to participate), (f)
any rights or claims to unemployment compensation, and (g)
reimbursement for business expenses which are consistent with the
Company’s reimbursement policy. I hereby represent and
warrant that, other than the Excluded Claims, I am not aware of any
claims I have or might have against any of the Released Parties
that are not included in the Released Claims.

 

 

 

 

 

I
expressly waive and relinquish any and all rights and benefits
under any applicable law or statute providing, in substance, that a
general release does not extend to claims which a party does not
know or suspect to exist in his or his favor at the time of
executing the release, which if known by him or his would have
materially affected the terms of such release.

 

I
acknowledge that, among other rights, I am waiving and releasing
any rights I may have under ADEA, that this Release and Waiver is
knowing and voluntary, and that the consideration given for this
Release and Waiver is in addition to anything of value to which I
was already entitled as an executive of the Company. If I am 40
years of age or older upon execution of this Release and Waiver, I
further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the release and
waiver granted herein does not relate to claims under the ADEA
which may arise after this Release and Waiver is executed; (b) I
should consult with an attorney prior to executing this Release and
Waiver; and (c) I have twenty-one (21) days from the date of
termination of my employment with the Company in which to consider
this Release and Waiver (although I may choose voluntarily to
execute this Release and Waiver earlier); (d) I have seven (7) days
following the execution of this Release and Waiver to revoke my
consent to this Release and Waiver; and (e) this Release and Waiver
shall not be effective until the seven (7) day revocation period
has expired without my having previously revoked this Release and
Waiver.

 

I
acknowledge my continuing obligations under my Proprietary
Information and Inventions Agreement. Pursuant to the Proprietary
Information and Inventions Agreement I understand that among other
things, I must not use or disclose any confidential or proprietary
information of the Company and I must immediately return all
Company property and documents (including all embodiments of
proprietary information) and all copies thereof in my possession or
control. I understand and agree that my right to the severance pay
I am receiving in exchange for my agreement to the terms of this
Release and Waiver is contingent upon my continued compliance with
my Proprietary Information and Inventions Agreement.

 

This
Release and Waiver constitutes the complete, final and exclusive
embodiment of the entire agreement between the Company and me with
regard to the subject matter hereof. I am not relying on any
promise or representation by the Company that is not expressly
stated herein. This Release and Waiver may only be modified by a
writing signed by both me and a duly authorized officer of the
Company.

 

Date:
__________________

By:

James
Sapirstein

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