Document:

srne-ex102_40.htm

 

Exhibit 10.2

EXECUTION VERSION

Confidential

STOCK SALE AND PURCHASE AGREEMENT

This STOCK SALE AND PURCHASE AGREEMENT (including the exhibits hereto, this “Agreement”), dated as of May 14, 2015 (the “Execution Date”), is entered into by and between NantPharma, LLC, a Delaware limited liability company (“Purchaser”), and Sorrento Therapeutics, Inc., a Delaware corporation (“Seller”).  Capitalized terms used and not otherwise defined in this Agreement have the meanings set forth in Exhibit A.

W I T N E S S E T H:

WHEREAS, IgDraSol Inc., a Delaware corporation (the “Company”), is a direct wholly-owned subsidiary of Seller;

WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to sell to Purchaser, all of Seller’s equity interests in the Company, consisting of 5,706,321 shares of Common Stock, par value $0.0001per share, of the Company (the “Sale Shares”), subject to the terms and conditions set forth herein; and

WHEREAS, Seller and Purchaser would like to enter into certain additional transactions as set forth herein;

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

ARTICLE I

SALE AND PURCHASE

1.1 Sale and Purchase of Shares.  Subject to the terms and conditions hereof, on the Closing Date (as hereinafter defined), Seller will sell to Purchaser, and Purchaser will purchase from Seller, the Sale Shares in exchange for the Upfront Payment.

1.2 The Closing.  The closing (the “Closing”) of the transactions contemplated by this Agreement shall take place at 10:00 am Pacific time at the offices of Seller on the second business day after the satisfaction or waiver of the conditions set forth in Article VI, or at such later date and time as the parties mutually agree upon, orally or in writing.  The date of the Closing is herein referred to as the “Closing Date.”

1.3 Closing Deliveries.  At the Closing, Purchaser shall make the Upfront Payment to Seller for the Sale Shares by wire transfer of immediately available funds to the account specified by Seller.  At the Closing, Seller shall deliver to Purchaser its original stock certificate(s) representing the Sale Shares, together with an executed stock power to effect the transfer of the Sale Shares to Purchaser.

ARTICLE II

ADDITIONAL OBLIGATIONS OF SELLER

2.1 Patent Rights.  Effective as of the Closing, Seller hereby conveys, assigns and transfers to Purchaser (or the Company as directed by Purchaser) all right, title and interest in, to and under the Patent Rights relating to the Compound Controlled by Seller and its Affiliates, including without limitation the Patent Rights set forth on Exhibit B.  In connection with the foregoing, Seller agrees to execute, and cause its Affiliates to execute, one or more patent assignments (in favor of, and in a form reasonably acceptable to, Purchaser or the Company) with respect to such Patent Rights.

 

 

2.2 Contracts.  Seller agrees to convey, assign and transfer to Purchaser (or the Company as directed by Purchaser) all right, title and interest in, to and under (a) the Contracts listed under the “Contracts—IgDraSol” header on Exhibit C, excluding Contracts identified by Purchaser that it wishes to be assigned to Seller (the “Excluded IgDraSol Contracts”); and (b) the Contracts listed under the “Contracts—Sorrento” header on Exhibit C, excluding Contracts identified by Purchaser that it wishes Seller to retain (the “Excluded Sorrento Contracts” and, together with the Excluded IgDraSol Contracts, the “Excluded Contracts”).  Seller shall make the Contracts available for Purchaser’s review within three (3) business days after the Execution Date and shall otherwise reasonably cooperate with Purchaser in identifying the Excluded Contracts.  Purchaser shall have until sixty (60) days after the Closing Date to determine whether or not a Contract shall be an Excluded Contract (and any Contract that is not so identified as an Excluded Contract to Seller within such 60-day period shall not be deemed an Excluded Contract hereunder).  Seller shall use commercially reasonable efforts to convey, assign and transfer to Purchaser (or the Company as directed by the Purchaser) all of its right, title and interest in, to and under, all Contracts (other than the Excluded Contracts) identified by Purchaser during such 60-day period as requested by Purchaser.  With respect to any IgDraSol Contracts, Seller agrees that it shall assume, and accept the conveyance, assignment and transfer of, any Excluded IgDraSol Contract identified by Purchaser during such 60-day period as requested by Purchaser.

2.3 Technology Transfer.  Promptly (and in any event within thirty (30) days) after the Closing, Seller will convey, assign and transfer, and cause its Affiliates to convey, assign and transfer, to Purchaser (or the Company as directed by Purchaser) all Know-How relating to the Compound Controlled by Seller and its Affiliates and all materials relating to such Know-How Controlled by Seller and its Affiliates, including, without limitation (a) all data and results of the development program undertaken by or on behalf of Seller, the Company and/or Samyang and (b) the Know-How and materials set forth on Exhibit D.

2.4 Regulatory Filings.  Promptly (and in any event within thirty (30) days) after the Closing, Seller will convey, assign and transfer, and cause its Affiliates to convey, assign and transfer, to Purchaser (or the Company as directed by Purchaser) all Regulatory Filings relating to the Compound Controlled by Seller and its Affiliates, including without limitation the Regulatory Filings set forth on Exhibit E.  Without limiting the generality of the foregoing, Seller hereby, on its own behalf and on behalf of its Affiliates, grants to Purchaser and the Company an exclusive and irrevocable right of access and reference to any and all Regulatory Filings (along with all data and results of the development program undertaken by or on behalf of Seller, the Company and/or Samyang) relating to the Compound, and shall cooperate fully, and shall cause its Affiliates to cooperate fully, to make the benefits of such Regulatory Filings, data and results available to Purchaser and the Company and their respective designee(s) on a worldwide basis.

2.5 Support.  Seller shall provide, and shall cause its Affiliates to provide, free of charge, such consulting support to Purchaser and the Company as may reasonably be requested by Purchaser or the Company for a period of ninety (90) days following the conveyance, assignment and transfer of Patent Rights, Know-How, materials and Regulatory Filings as contemplated pursuant to this Article II (the “Support Period”).  If Purchaser provides notice to Seller that it requires further assistance that exceeds the scope of this Section 2.4 and/or extends beyond the Support Period, Purchaser shall notify Seller and if, in its sole discretion, Seller agrees, Purchaser and Seller shall negotiate in good faith the terms of any additional support.

2.6 Milestone Payments under Exclusive Distribution Agreement.  Notwithstanding anything in the Exclusive Distribution Agreement to the contrary, Seller (and not Purchaser or the Company) shall be responsible for and pay all milestone and license fees required to be paid to Samyang under the Exclusive Distribution Agreement following notification from Purchaser when such milestone and license fees become due and payable, including without limitation, the payments required to be made under:  (a) Article 3 (License Fee) of the original Exclusive Distribution Agreement entered into as of October 29, 2012 (“Original Agreement”), (b) Article 2 (License Fee) of the Addendum To Exclusive Distribution Agreement entered into as of May 10, 2013 and amending the Original Agreement as set forth therein (c) Article 2 (License Fee) of the Second Addendum To Exclusive Distribution Agreement entered into as of January 31, 2014 and amending the Original Agreement as set forth therein and (d) Article 2 (License Fee) of the Fifth Addendum To Exclusive Distribution Agreement entered into as of May 1, 2015 and amending the Original Agreement as set forth therein.  For clarity, the Original Agreement and the amendments thereto pursuant to (b) – (d) are part of the Exclusive Distribution Agreement, a copy of which is attached as Exhibit H.  For the avoidance of doubt, the Company (and not Seller) will be responsible for the annual minimum order obligations under the Exclusive Distribution Agreement.

ARTICLE III

ADDITIONAL OBLIGATIONS OF PURCHASER

3.1 Milestone Payments.  In addition to the Upfront Payment, after the Closing, Purchaser shall make milestone payments to Seller as set forth on Exhibit F (all on a one-time, non-refundable basis and subject in each case to the satisfaction of the condition for such milestone payment).

3.2 Supply of Compound.  The Company and Purchaser shall have the exclusive right to purchase finished dose drug product for the Compound from any party, including Samyang under the Exclusive Distribution Agreement.  In the case of finished dose product purchased for Commercial Sale, in addition to making Supply Payments, Purchaser shall make payments to Seller as set forth on Exhibit F in respect of Compound for Commercial Sale by the Company or other Selling Parties, or any distributor or subdistributor of any such Selling Party.

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3.3 Development and Commercialization.  From and after the Closing, Purchaser will be responsible for all future costs of research, development and commercialization of the Compound in and for the Territory and will have full control of all research, development and commercialization decisions and activities.  Without limiting the generality of the foregoing, Purchaser will use Commercially Reasonable Efforts to develop the Compound for gastric, ovarian, prostate, melanoma and bladder cancers (and if Purchaser fails to use Commercially Reasonable Efforts to develop the Compound for such indications within the five (5) year period following the Closing Date, then the parties will negotiate in good faith the reversion of such rights to Seller for the indications that have not been so developed).  For the avoidance of doubt, from and after the Closing, Purchaser and the Company shall have complete discretion and control with respect to the research, development and regulatory strategy for the Compound in and for the Territory.

3.4 Co-Development and Co-Marketing Opportunity.  During the first three (3) years after the Closing Date, Seller may exercise a right, upon written request to Purchaser, to obtain from Purchaser co-development and/or co-distribution/co-marketing rights for the Compound, and upon such request, Purchaser and Seller will negotiate the details of, and the definitive agreement for, any such co-development and/or co-distribution/co-marketing rights to the mutual satisfaction of both parties

3.5 IgDraSol Employees.  During the period commencing on the date of this Agreement and continuing until sixty (60) days after the later of (a) conveyance, assignment and transfer of Patent Rights, Know-How, materials and Regulatory Filings as contemplated pursuant to this Article II and (b) the Closing Date (the “Transition Period”), Purchaser will conduct a review of the IgDraSol Employees (as defined in Section 4.10) with the reasonable assistance of Seller in order for Purchaser to determine which of the IgDraSol Employees to retain (“Retained IgDraSol Employees”).  Purchaser shall inform Seller and the IgDraSol Employees of its determination no later than the last day of the Transition Period.  Purchaser and the Company (and not Seller) shall be responsible for all compensation and benefits of the Retained IgDraSol Employees for services performed after the Transition Period.  Seller shall not terminate any of the IgdraSol Employees during the Transition Period without cause.  Seller (and not Purchaser or the Company) shall be responsible for all compensation and benefits of the IgDraSol Employees for services performed during the Transition Period and of the IgDraSol Employees (other than the Retained IgDraSol Employees) after the Transition Period, including any severance obligations.  For clarity, any signing or retention bonus or advances on compensation paid or offered by the Company or Purchaser during the Transition Period shall not be considered part of the compensation and benefits for which Seller is responsible for pursuant to the preceding sentence.

3.6 Records and Audit Rights.  Purchaser and Company shall maintain complete and accurate records in sufficient detail to permit Seller to confirm the accuracy of (a) the achievement of the milestones payable pursuant to Section 3.1 and (b) the amount of Compound purchased for Commercial Sale and the supply price to verify the payments pursuant to Section 3.2.  Upon reasonable prior notice, such records shall be open during regular business hours for a period of three (3) years from the creation of individual records for examination by an independent certified public accountant selected by Seller and reasonably acceptable to the Company for the sole purpose of verifying for the Seller the accuracy of the achievement of milestones and payments from Purchaser and Company pursuant to this Agreement or of any payments made, or required to be made, by or to the Seller pursuant to this Agreement.  Such audits may occur no more often than once each calendar year.  Such auditor shall not disclose the Company’s or Purchaser’s confidential and/or proprietary information to Seller, except to the extent such disclosure is necessary to verify the accuracy of the reports and payments to Seller under this Agreement.  Any amounts shown to be owed but unpaid, or overpaid and in need of refund, shall be paid within forty-five (45) days after the accountant’s report, plus (in the case of amounts owed with respect to Compound purchased for Commercial Sale under Section 3.2) interest at the rate of compound interest shall thereafter accrue on the sum due from the due date until the date of payment at a per annum rate of two percent (2%) over the then-current prime rate reported in The Wall Street Journal or the maximum rate allowable by applicable law.  Seller shall bear the full cost of such audit unless such audit reveals underpayment by the audited party that resulted from a discrepancy in the report provided by the audited party for the audited period, which underpayment was more than five percent (5%) of the amount set forth in such report, in which case the audited party shall reimburse the Seller for the costs for such audit.

ARTICLE IV

SELLER’S REPRESENTATIONS AND WARRANTIES

As a material inducement to Purchaser to purchase the Sale Shares and consummate the other transactions contemplated hereby, Seller represents and warrants to Purchaser as of the Closing Date as follows:

4.1 Due Authorization.  Seller has all requisite power and authority to execute and deliver this Agreement and perform its obligations hereunder.  The execution, delivery and performance by Seller of this Agreement have been approved by all requisite action on the part of Seller.  This Agreement constitutes a valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

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4.2 Title.  Seller has full legal and beneficial title to the Sale Shares, and, upon transfer to Purchaser, Purchaser will have full legal and beneficial title thereto free and clear of all liens, encumbrances, security interests, pledges, claims (pending or threatened), charges, options, rights of first offer or refusal, put rights, call rights, commitments, understandings or obligations, whether written or oral, or other interests of third parties, or restrictions on transfer or voting rights, other than (a) those imposed by Purchaser and (b) any restrictions on transfer under the Securities Act of 1933 (the “Securities Act”) or under applicable securities laws.

4.3 No Conflicts.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not result in (a) any violation, or be in conflict with or constitute a default (with or without notice or lapse of time or both) under the certificate of incorporation or bylaws of Seller or the Company, (b) any violation, or be in conflict with or constitute a default (with or without notice or lapse of time or both) under, or require any consent of or notice to any Person pursuant to, any term or provision of, or any right of termination, cancellation or acceleration arising under, the Exclusive Distribution Agreement or any contract that Seller is a party to, (c) any violation under any order or law applicable to Seller or (d) the imposition or creation of any lien or encumbrance upon or with respect to any of the assets of Seller or the Company.

4.4 Consents.  Other than such consents as set forth on Exhibit G (“Consents”), no authorization, consent, approval or other order of, or declaration to or filing with, any governmental agency or body or other entity, individual or other Person is required for the valid authorization, execution, delivery and performance by Seller of the Agreement and the consummation of this transactions contemplated hereby.

4.5 Organization, Good Standing, Corporate Power and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property or results of operations of the Company.

4.6 Capitalization.  The entire capitalization of the Company immediately prior to the Closing shall consist of the Sale Shares.  Except for the Sale Shares, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any person any right to subscribe for or acquire any of the Company’s capital stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue any capital stock.  No person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement.  The Company has no subsidiaries and owns no equity interests in any other Person.  The Company is not and has not at any time been a participant in any joint venture, partnership or similar arrangement.

4.7 Assets and Liabilities of the Company.  The Company has no assets or Liabilities of any kind, except for (a) the rights and obligations under the Exclusive Distribution Agreement and (b) Patent Rights, Know-How, materials and Regulatory Filings relating to the Compound and to be transferred to Purchaser in accordance with Article II.  Seller Controls all Patent Rights, Contracts, Know-How, materials and Regulatory Filings relating to the Compound, and such Patent Rights, Contracts, Know-How, materials and Regulatory Filings are accurately identified and described on Exhibits B, C, D and E, respectively.  Each item of Patent Rights (a) is valid, subsisting and in full force and effect, (b) has not been abandoned or passed into the public domain and (c) is free and clear of any liens, claims or other encumbrances.  Except as set forth in the Section 4.7 Schedule of Exceptions, Seller has no knowledge of (i) any facts, circumstances or information that would render any Patent Rights invalid or unenforceable or of any claim or Proceeding alleging the foregoing or that the manufacture, sale, offer for sale or importation of the Compound in the Territory infringes or misappropriates or would infringe or misappropriate any right of any Third Party, (ii) any pending interference, opposition, cancellation or patent protest pursuant to 37 C.F.R. 1.291 with respect to any Patent Rights or (iii) any facts, circumstances or information that would adversely affect or impede the ability of the Company or Purchaser to use any Patent Rights following the Closing.  Seller has not misrepresented, or failed to disclose, and has no knowledge of any misrepresentation or failure to disclose, any fact or circumstances in any application for any Patent Rights that would constitute fraud or a misrepresentation with respect to such application or that would otherwise affect the validity or enforceability of any Patent Rights.  All necessary registration, maintenance and renewal fees in connection with the Patent Rights have been paid.  The Company is not a guarantor or indemnitor of any indebtedness of any other Person.  An accurate and complete copy of the Exclusive Distribution Agreement is attached hereto as Exhibit H.  The Company has not granted any distribution, subdistribution or any other rights to any Person under the Exclusive Distribution Agreement.  The Exclusive Distribution Agreement and all other Contracts Controlled by Seller or its Affiliates relating to the Compound are currently valid and in full force and effect, and are enforceable by the Seller or its Affiliates, as applicable, in accordance with their terms.  Neither the Seller nor any of its Affiliates is in default, and neither Samyang nor any other Person has notified Seller or any of its Affiliates that it is in default, under the Exclusive Distribution Agreement or any other Contract Controlled by Seller or its Affiliates relating to the Compound.  To the knowledge of Seller, no event has occurred, and no circumstance or condition exists, that would reasonably be expected to (a) result in a violation or breach of any of the provisions of the Exclusive Distribution Agreement or any other Contract Controlled by Seller or its Affiliates; (b) give Samyang or any other counterparty the right to declare a default or exercise any remedy under the Exclusive Distribution Agreement or any other Contract Controlled by Seller or its Affiliates; or (c) give Samyang or any other counterparty the right to cancel, terminate or modify the Exclusive Distribution Agreement or any other Contract Controlled by Seller or its Affiliates.

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4.8 Litigation.  There is no claim, action, suit, inquiry, notice of violation, Proceeding or investigation pending or, to the knowledge of Seller, threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority.

4.9 Compliance with Laws.  The Company is in full compliance with all Laws that are applicable to the Company and the Company’s properties, assets, operations and business, and to the knowledge of the Company, no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) constitute, or result directly or indirectly in, a default under, a breach or violation of, or a failure comply with, any such Law.  Neither Seller nor the Company has received any notice from any third party regarding any actual, alleged or potential violation of any Law.

4.10 Employee Matters.  With the exception of the persons set forth in Exhibit I (each an “IgDraSol Employee” and collectively, “IgDraSol Employees”), the Company does not have any employees, consultants or independent contractors.  To Seller’s knowledge, (i) the Company is not materially delinquent in payments to any of its employees, consultants, or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or amounts required to be reimbursed to such employees, consultants, or independent contractors, (ii) the Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including those related to wages, hours, worker classification, and collective bargaining, (iii) the Company has withheld and paid to the appropriate Governmental Authority or is holding for payment not yet due to such Governmental Authority all amounts required to be withheld from employees of the Company and (iv) is not liable for any arrears of wages, Taxes, penalties, or other sums for failure to comply with any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company.  Upon termination of the employment of any such employees, no severance or other payments will become due, other than accrued wages (including vacation pay) as generally required by law.  The Company has no policy, practice, plan or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.  Neither Seller nor the Company has made any representations regarding equity incentives to any employees or consultants of the Company.  The Company has not maintained, established or sponsored any employee benefit plan and is not required to contribute to any employee benefit plan of any other corporation, limited liability company, partnership or other entity.

4.11 Tax Returns and Payments.  There are no Taxes dues and payable by the Company which have not been timely paid.  There are no accrued and unpaid Taxes of the Company which are due, whether or not assessed or disputed.  The Company has duly and timely filed all Tax Returns required to have been filed by it.

4.12 Brokers.  There is no broker, investment banker, financial advisor, finder or other person who has been retained by or is authorized to act on behalf of Seller or Company who might be entitled to any fee or commission in connection with the execution of this Agreement and the consummation of the transactions contemplated by this Agreement.

4.13 Disclosure.  Seller has made available to Purchaser all the information reasonably available to Seller and the Company that Purchaser has requested for deciding whether to acquire the Sale Shares.  No representation or warranty of Seller contained in this Agreement, and no certificate furnished or to be furnished to Purchaser at the Closing, contains any untrue statement of a material fact or to Seller’s knowledge, omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.

ARTICLE V

PURCHASER’S REPRESENTATIONS AND WARRANTIES

As a material inducement to Seller to sell the Sale Shares and consummate the other transactions contemplated hereby, Purchaser represents and warrants to Seller as of the Closing Date as follows:

5.1 Organization, Good Standing, Corporate Power and Qualification. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry out its obligations hereunder and to consummate the transactions contemplated hereby, including the execution and delivery by Buyer of this Agreement and the performance by Buyer of its obligations hereunder.

5.2 Due Authorization.  Purchaser has all requisite power and authority to execute and deliver this Agreement and perform its obligations hereunder.  The execution, delivery and performance by Purchaser of this Agreement have been approved by all requisite action on the part of Purchaser.  This Agreement constitutes a valid and legally binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

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5.3 No Conflicts.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not result in (a) any violation, or be in conflict with or constitute a default (with or without notice or lapse of time or both) under the charter and governing documents of Purchaser, (b) any violation, or be in conflict with or constitute a default (with or without notice or lapse of time or both) under, or require any consent of or notice to any Person pursuant to, any term or provision of, or any right of termination, cancellation or acceleration arising under, any contract that Purchaser is a party to or (c) any violation under any order or law applicable to Purchaser.

5.4 Consents.  No authorization, consent, approval or other order of, or declaration to or filing with, any governmental agency or body or other entity, individual or other Person is required for the valid authorization, execution, delivery and performance by Purchaser of this Agreement and the consummation of the transactions contemplated hereby.

5.5 Accredited Investor.  Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

5.6 Upfront Payment.  Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Upfront Payment and consummate the transactions contemplated by this Agreement.

5.7 Brokers.  There is no broker, investment banker, financial advisor, finder or other person who has been retained by or is authorized to act on behalf of Purchaser who might be entitled to any fee or commission in connection with the execution of this Agreement and the consummation of the transaction contemplated by this Agreement.

ARTICLE VI

CONDITIONS TO CLOSING

6.1 Purchaser’s Conditions to Closing.  The obligations of Purchaser to purchase the Sale Shares at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived by Purchaser in its sole discretion:

(a) Representations and Warranties.  The representations and warranties of Seller contained in Article IV shall be true and correct in all respects as of the Closing.

(b) Performance.  Seller shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing

(c) No Material Adverse Event.  Since the Execution Date, there shall not have been any change, effect, event, development, occurrence, condition or state of facts that is, or would reasonably be expected to be materially adverse to the business, assets (including intangible assets), liabilities, prospects, financial condition, property or results of operations of the Company or with respect to the Compound.

(d) Compliance Certificate.  The Chief Executive Officer of Seller shall deliver to Purchaser at the Closing a certificate certifying that the conditions specified in Sections 6.1(a), (b) and (c) have been fulfilled.

(e) Consents.  Seller shall have delivered to Purchaser all Consents.

(f) Patent Assignments.  Seller and/or its Affiliates shall have executed one or more patent assignments (in favor of, and in a form reasonably acceptable to, Purchaser or the Company) with respect to Patent Rights relating to the Compound Controlled by Seller and its Affiliates, including without limitation the Patent Rights set forth on Exhibit B.

(g) Assignments of Sorrento Contracts.  Seller and/or its Affiliates shall have delivered one or more assignments (in favor of, and in a form reasonably acceptable to, Purchaser or the Company) of any Contracts listed under the “Contracts—Sorrento” header on Exhibit C requested by Purchaser.

(h) Assignments of IgDraSol Contracts.  Seller and/or its Affiliates shall have delivered one or more assignments (in a form reasonably acceptable to Purchaser) of any Excluded IgDraSol Contracts identified by Purchaser whereby such Excluded IgDraSol Contracts are assigned by the Company to Seller.

(i) Resignations.  All directors and officers of the Company shall have resigned, and Seller shall have delivered to Purchaser evidence of such resignations.

(j) Stock Certificate.  Seller shall have delivered to Purchaser the original stock certificate(s) representing the Sale Shares, together with an executed stock power to effect the transfer of the Sale Shares to Purchaser.

(k) HSR Conditions.  All HSR Conditions shall have expired or been terminated or been obtained or made.

6.2 Seller’s Conditions to Closing.  The obligations of Seller to sell the Sale Shares at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived by Seller in its sole discretion:

(a) Representations and Warranties.  The representations and warranties of Purchaser contained in Article V shall be true and correct in all respects as of the Closing.

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(b) Performance.  Purchaser shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

(c) Upfront Payment.  Purchaser shall have made the Upfront Payment to Seller by wire transfer to an account designated by the Seller.

(d) HSR Conditions.  All HSR Conditions shall have expired or been terminated or been obtained or made.

ARTICLE VII

INDEMNIFICATION

7.1 Survival of Warranties.  The representations and warranties of Seller and Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing; provided that the representations and warranties in Sections 4.7, 4.8, 4.9 and 4.10 shall only survive the execution and delivery of this Agreement and the Closing for a  period of twenty-four (24) months and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of Purchaser or Seller.

7.2 Indemnification by Seller.  Seller shall indemnify, defend and hold harmless Purchaser and the Company and their Affiliates and their respective officers, directors, employees, agents and representatives (collectively, “Purchaser Parties”) from any and all third party Liabilities, losses, damages, claims, demands, costs or expenses (including reasonable attorneys’ fees) (collectively, “Damages”), arising out of, relating to or resulting from (a) any breach of a representation or warranty of Seller in this Agreement; (b) any breach of any covenant Seller contained in this Agreement; (c) any Liability of the Company arising out of, or accruing with respect to, its conduct or operations prior to the Closing, whether under the Exclusive Distribution or otherwise; (d) any Pre-Closing Taxes; (e) any Liability for breaches of any Contracts on or prior to the Closing Date or any Liability for payments or amounts due under any Contracts on or prior to the Closing Date and (f) any Liability under the Excluded Contracts, including with respect to breaches of any Excluded Contract or payment or amounts due under any Excluded Contract.

7.3 Indemnification by Purchaser.  Purchaser shall indemnify, defend and hold harmless Seller and its Affiliates and their respective officers, directors, employees, agents and representatives (collectively, “Seller Parties”) from any and all Damages, arising out of, relating to or resulting from, (a) any breach of a representation or warranty of Purchaser contained in this Agreement or (b) any breach of any covenant of Purchaser contained in this Agreement; or (c) any Taxes that are the responsibility of Purchaser pursuant to Section 8.4.

7.4 Procedures for Indemnification.  Promptly after receipt by a party entitled to indemnification hereunder (the “Indemnitee”) of written notice of the assertion or the commencement of any Proceeding by a third-party with respect to any matter referred to in Sections 7.2 or 7.3, the Indemnitee shall give written notice thereof to the party obligated to indemnify Indemnitee (the “Indemnitor”), and thereafter shall keep the Indemnitor reasonably informed with respect thereto; provided, that failure of the Indemnitee to give the Indemnitor notice as provided herein shall not relieve the Indemnitor of its obligations hereunder except to the extent that the Indemnitor is materially prejudiced thereby.  A claim for indemnification for any matter not involving a third-party Proceeding may be asserted by notice to the party from whom indemnification is sought and shall be paid promptly after such notice.

7.5 Remedies Cumulative.  The remedies provided in this Agreement shall be cumulative and shall not preclude any party from asserting any other right, or seeking any other remedies, against the other party.

ARTICLE VIII

TAX MATTERS AND ANTI-TRUST MATTERS

8.1 Preparation and Filing of Tax Returns.  Purchaser shall prepare (or cause to be prepared) and Purchaser shall file (or cause to be filed) the Tax Return required to be filed by the Company for 2015, inclusive of the Closing Date for (or that includes) a taxable period beginning before the Closing Date.  Purchaser shall prepare and file all Tax Returns required to be filed for taxable years after 2015.  To the extent any Tax shown as due on such Tax Return is payable by Seller (taking into account indemnification obligations hereunder), such Tax Return shall be provided to Seller at least sixty (60) days prior to the due date for filing such return (or, if required to be filed within thirty (30) days of the Closing Date, as soon as possible following the Closing Date); and Seller shall have thirty (30) days to review, and Seller shall not file such Tax Return with respect to any information related to periods prior to the Closing Date without the prior written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed.  The failure of Seller to notify Purchaser of changes to any such Tax Return within thirty (30) days of receipt thereof shall constitute consent.

8.2 Amended Returns; Tax Elections.  Except as part of a resolved audit with a Tax authority, Seller may not amend (or permit the amendment of) a Tax Return of the Company or make, amend or revoke (or permit the making, amendment, or revocation of) any Tax election of the Company, in each case, with respect to a taxable period beginning before the Closing Date without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed.  Except as part of a resolved audit with a Tax authority, Purchaser may not amend (or cause the Company to amend) a Tax Return of the Company, or amend or 

7

 

revoke (or permit the making, amendment, or revocation of) any Tax election of the Company, in each case, with respect to a taxable period beginning before the Closing Date without the prior written consent of Seller.  Purchaser shall prepare all amendments to Tax Returns of the Company after the Closing Date, provided that the parties shall coordinate the preparation and filing of any such amendment to the Tax Returns of the Company for periods prior to the Closing Date, and the Purchaser shall not file any such amendment except with the prior written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed.  The failure of Seller to notify Purchaser of changes to any such amendment to a Tax Return within thirty (30) days of receipt thereof shall constitute consent.

8.3 Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration, value-added and other similar Taxes and fees (“Transfer Taxes”) incurred in connection with the transactions contemplated by this Agreement shall be paid by Seller when due.  Except as otherwise required by applicable Tax law, Seller shall, at its own expense, prepare and file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes, and provide Purchaser with a copy thereof.  If required by applicable Tax law, Purchaser shall join in the execution of any such Tax Returns and other documentation.

8.4 Straddle Period Allocations.  For purposes of this Agreement, Taxes of the Company incurred with respect to a taxable period that includes but does not end on the Closing Date shall be allocated to the portion of the taxable period ending on the Closing Date (i) except as provided in (ii) and (iii) below, to the extent feasible, on a specific identification basis, according to the date of the event or transaction giving rise to the Tax, and (ii) except as provided in (iii) below, with respect to periodically assessed ad valorem Taxes and Taxes not otherwise feasibly allocable to specific transactions or events, in proportion to the number of days in such taxable period occurring through the Closing Date compared to the total number of days in such taxable period, and (iii) in the case of any Tax based upon or related to income or receipts, in an amount equal to the Tax which would be payable if the relevant taxable period ended on the Closing Date. Each of Seller and Purchaser shall be responsible for the Tax applicable to the  period prior to and after the Closing Date, respectively, as described in this Section 8.4.

8.5 Cooperation on Tax Matters.  Purchaser and Seller will cooperate, as and to the extent reasonably requested by the other party, in connection with the filing and preparation of Tax Returns pursuant to this Article VIII and any Proceeding related thereto.  Such cooperation will include the retention and (upon the other party’s request) the provision of records and information that are reasonably relevant to any such Proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  Purchaser and Seller will retain all books and records with respect to Tax matters pertinent to the Company relating to any Tax period beginning before the Closing Date until thirty (30) days after the expiration of the statute or period of limitations of the respective Tax periods

8.6 Cooperation on Antitrust Laws.

(a) Each of Purchaser and Seller shall, within ten (10) business days after Execution Date, file with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice, any HSR Filing required of it under the HSR Act with respect to the subject matter of this Agreement, which forms shall specifically request early termination of the initial HSR Act waiting period.  The parties will cooperate with one another to the extent necessary in the preparation of any such HSR Filing.  The parties hereto commit to instruct their respective counsel to cooperate with each other and use good faith, diligent efforts to facilitate and expedite the identification and resolution of any such issues and, consequently, the expiration of the applicable HSR Act waiting period, such good faith diligent efforts to include counsel’s undertaking:  (i) to keep each other appropriately informed of communications received from and submitted to personnel of the reviewing antitrust authority; and (ii) to confer with each other regarding appropriate contacts with and response to personnel of the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice.  The parties shall share the filing fees associated with their HSR Filings on a 50/50 basis.  Each party will be responsible for all other costs and expenses incurred by it associated with its HSR Filing.  In respect of any HSR Filing, each of Purchaser and Seller will use its good faith, diligent efforts to eliminate any concern on the part of any court or governmental authority regarding the legality of the proposed transaction, including cooperating in good faith with any government investigation and the prompt production of documents, information, and witnesses requested in the course of such of any such investigation, including those contained in a Request for Additional Information and Documentary Materials (as that term is defined in the HSR Act), and to cause the closing under this Agreement to occur as soon as practical.  Nothing in this Section 8.6 shall require either party to consent to the divestiture or other disposition of any of its or its Affiliates’ assets or to consent to any other structural or conduct remedy, and each party and its Affiliates shall have no obligation to contest, administratively or in court, any ruling, order or other action of the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice or any third party respecting the transactions contemplated by this Agreement.

(b) In the event that the Effective Date has not occurred within one hundred eighty (180) days following the Execution Date, or such date as the parties may mutually agree, this Agreement may be terminated by either party on written notice to the other.

8

 

ARTICLE IX

MISCELLANEOUS

9.1 Integration; Entire Agreement.  This Agreement contains the entire understanding of the parties with respect to the subject matter hereof.  There are no agreements, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof.  Except as otherwise expressly set forth herein, this Agreement embodies the complete agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, that may have related to the subject matter hereof in any way.

9.2 Further Assurances.  At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.

9.3 Amendment and Waiver.  This Agreement may be amended only by a written instrument signed by the parties hereto.  No waiver by any party hereto of any provision hereof shall be effective unless set forth in a writing executed by the party so waiving.  The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

9.4 Notices.  Any notice or other communication required or permitted to be given to any party hereunder shall be in writing and shall be given to such party at such party’s address set forth on such party’s signature page hereto or such other address as such party may hereafter specify by notice in writing to the other party.  Any such notice or other communication shall be addressed as aforesaid and given by (a) hand delivery, (b) reputable overnight courier or (c) e-mail transmission.  Any notice or other communication will be deemed to have been duly given (i) on the date of service if served personally, (ii) on the business day after delivery to an overnight courier service, provided receipt of delivery has been confirmed, or (iii) on the date of transmission if sent via e-mail, provided confirmation of receipt is obtained promptly after completion of transmission.

9.5 Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York, without regard to the conflicts of law principles that would provide for application of the law of a jurisdiction other than New York.

9.6 Dispute Resolution.

(a) Resolution by Chief Executive Officers.  Except as otherwise provided in this Agreement, in the event of any dispute, claim, or controversy arising under, out of, or in connection with this Agreement (a “Dispute”), including as to the breach, performance, or interpretation of this Agreement or the rights, duties or liabilities of either party hereunder, the parties will first attempt in good faith to resolve such Dispute by negotiation and consultation between themselves.  If such Dispute is not resolved on an informal basis within ten (10) business days, either party may, by written notice to the other party, refer the Dispute to the Chief Executive Officers of the parties for attempted resolution by good faith negotiation within 30 days after such notice is received.  Such Chief Executive Officers will attempt in good faith to promptly resolve such Dispute.  If any matter is not resolved, or both parties believe that it will not be resolved, under the foregoing provisions, each party may, at its sole discretion, seek resolution of such matter in accordance with this Section 9.6.

(b) Arbitration.  Except as otherwise expressly provided in this Section, if the parties do not reach a mutually acceptable resolution pursuant to Section 9.6(a) as to a Dispute, the Dispute shall be referred for resolution by final, binding arbitration in accordance with the provisions of this Section.  The arbitration shall be conducted by the American Arbitration Association (or any successor entity thereto) (“AAA”) under its rules of commercial arbitration then in effect, except as modified in this Agreement.  The arbitration shall be conducted in the English language, by a single arbitrator knowledgeable in the subject matter at issue in the Dispute and acceptable to both parties; provided, that the parties may by mutual agreement elect to have the arbitration conducted by a panel of three arbitrators (such single arbitrator or panel, the “Arbitrator”).  The Arbitrator shall, if appropriate, engage an independent expert with experience in the subject matter of the Dispute to advise the Arbitrator.

(i) With respect to any Dispute referred to arbitration pursuant to this Section 9.6, the parties and the Arbitrator shall use all reasonable efforts to complete any such arbitration within three (3) months from the issuance of notice of a referral of any such Dispute to arbitration.  The Arbitrator shall determine what discovery will be permitted, consistent with the goal of limiting the cost and time which the parties must expend for discovery; provided that the Arbitrator shall permit such discovery as he or she deems necessary to permit an equitable resolution of the Dispute.

(ii) The decision of the Arbitrator shall be the sole, exclusive, and binding remedy between them regarding the Dispute presented to the Arbitrator.  Any decision of the Arbitrator may be entered in a court of competent jurisdiction for judicial recognition of the decision and an order of enforcement.  The arbitration proceedings and the decision of the Arbitrator shall not be made public without the joint consent of the parties, and each party shall maintain the confidentiality of such proceedings and decision.

9

 

(iii) Unless otherwise agreed by the parties, the arbitration proceedings shall be conducted in Los Angeles, California.  The parties shall share equally the cost of the arbitration filing and hearing fees, the cost of the independent expert retained by the Arbitrator, and the cost of the Arbitrator and administrative fees of AAA.  Each party shall bear its own costs and attorneys’ and witnesses’ fees and associated costs and expenses.

(c) Temporary Relief.  Pending the selection of the Arbitrator or pending the Arbitrator’s determination of the merits of any Dispute, either Party may seek appropriate interim or provisional relief from any court of competent jurisdiction as necessary to protect the rights or property of that party.

9.7 Enforcement.  Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed by the parties in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right each party may have, each party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.

9.8 Successors and Assigns.  Neither this Agreement nor any of the rights or obligations created herein may be assigned by either party, in whole or in part, without the prior written consent of the other Party, not to be unreasonably withheld or delayed, except that either party shall be free to assign this Agreement (a) to an Affiliate of such party provided that such party shall remain liable and responsible to the other party for the performance and observance of all such duties and obligations by such Affiliate, or (b) in connection with any merger, consolidation or sale of such party or sale of all or substantially all of the assets of the party that relate to this Agreement, without the prior consent of the non-assigning party.  This Agreement shall bind and inure to the benefit of the successors and permitted assigns of the parties hereto.  Any assignment of this Agreement in contravention of this Section 9.8 shall be null and void.

9.9 Force Majeure.  Neither party shall be held liable or responsible to the other party, nor be deemed to have defaulted under or breached this Agreement, for failure or delay in fulfilling or performing any term of this Agreement to the extent, and for so long as, such failure or delay is caused by or results from causes beyond the reasonable control of the affected party, including fire, floods, embargoes, power shortage or failure, acts of war (whether war be declared or not), insurrections, riots, terrorism, civil commotions, strikes, lockouts or other labor disturbances, acts of God, or any acts, omissions, or delays in acting by any governmental authority or the other party; provided such failure or delay did not arise from the negligence or willful misconduct of the affected party.

9.10 Fees and Expenses.  Each party shall pay it own costs and expenses in connection with this Agreement and the transactions contemplated hereby (including the fees and expenses of its advisers, accountants and legal counsel).

9.11 Severability.  If any part or parts of this Agreement shall be held unenforceable for any reason, the remainder of this Agreement shall continue in full force and effect.  If any provision of this Agreement is deemed invalid or unenforceable by any court of competent jurisdiction, and if limiting such provision would make the provision valid, then such provision shall be deemed to be construed as so limited.

9.12 Binding Effect. The covenants and conditions contained in this Agreement shall apply to and bind the Parties and the heirs, legal representatives, successors and permitted assigns of the Parties.

9.13 Counterparts.  This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

9.14 Headings.  The headings in this Agreement are inserted for convenience of reference only and shall not affect the interpretation of this Agreement.

9.15 Publicity.  Except as required by Law, each party agrees not to issue any press release or public statement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof without the prior written consent of the other party not to be unreasonably withheld. For the avoidance of doubt (and notwithstanding anything contained in this Agreement to the contrary), each of Purchaser and the Company, in its sole discretion, may make disclosures relating to the development or commercialization of the Compound, including the results of research and any clinical trial conducted by or on behalf of Purchaser or the Company, or any health or safety matter related to the Compound.

[Signature pages follow]

 

 

 

10

 

IN WITNESS WHEREOF, the parties have executed and delivered this Stock Sale and Purchase Agreement as of the day and year first above written.

 

	
SELLER:

	
 
	
 
	
 

	
SORRENTO THERAPEUTICS, INC.

	
 
	
 
	
 

	
By:
	
  
	
/s/ Henry Ji

	
Name:
	
 
	
Henry Ji, Ph.D.

	
Title:
	
 
	
President & CEO

	
Address:
	
 
	
6042 Cornerstone Court West, Suite B

	
 
	
 
	
San Diego, CA 92121

	
 

	
PURCHASER:

	
 
	
 
	
 

	
NANTPHARMA, LLC

	
 
	
 
	
 

	
By:
	
 
	
/s/ Patrick Soon-Shiong

	
Name:
	
 
	
Patrick Soon-Shiong

	
Title:
	
 
	
Chief Executive Officer

	
Address:
	
 
	
NantPharma, LLC.

	
 
	
 
	
9920 Jefferson Boulevard

	
 
	
 
	
Culver City, California 90232

	
 
	
 
	
Attention:  General CounselExhibit 10.1

 

CHANGE OF CONTROL AGREEMENT

 

AGREEMENT
by and between Seacoast Banking Corporation of Florida (the “Company”) and Stephen Fowle (“Executive”),
dated as of the 6th day of August, 2015.

 

The Board of Directors
of the Company (the “Board”), has determined that it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication of Executive, notwithstanding the possibility, threat or occurrence
of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction
of Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage
Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of
Control, and to provide Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation
and benefits expectations of Executive will be satisfied and which are competitive with those of other corporations.

 

Therefore, in order
to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

 

NOW, THEREFORE, IT
IS HEREBY AGREED AS FOLLOWS:

 

1.Certain Definitions.

 

(a)The “Effective Date”
shall mean the first date during the Change of Control Period (as defined in Section l(b)) on which a Change of Control (as defined
in Section 2) occurs.

 

(b)The “Change of Control
Period” shall mean the period commencing on the date hereof and ending on the first anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date
and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated,
the Change of Control Period shall be automatically extended so as to terminate one year from such Renewal Date, unless at least
60 days prior to the Renewal Date the Company shall give notice to Executive that the Change of Control Period shall not be so
extended.

 

2.Change of Control. For
the purposes of this Agreement, a “Change of Control” shall mean the occurrence of any of the following events:

 

(a)during any consecutive
12-month period, individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of such Board, provided that any person becoming a director after the beginning
of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent
Directors then on the Board shall be an Incumbent Director; provided, however, that no individual initially elected
or nominated as a director of the Company as a result of an actual or threatened election contest with respect to the election
or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by
or on behalf of any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the
“1934 Act”) and as used in Section 13(d)(3) and 14(d)(2) of the 1934 Act) other than the Board (“Proxy Contest”),
including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent
Director;

 

 

    	

    	Change of Control Agreement
Page 2

    

 

 

(b)any person becomes
a “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of either (A) 35% or more
of the then-outstanding shares of common stock of the Company (“Company Common Stock”) or (B) securities of the Company
representing 35% or more of the combined voting power of the Company’s then-outstanding securities eligible to vote for the
election of directors (the “Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions of Company Common Stock or Company Voting Securities shall not constitute a Change of
Control: (i) an acquisition directly from the Company, (ii) an acquisition by the Company or any corporation, limited liability
company, partnership or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company (a “Subsidiary”), (iii) an acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Subsidiary, or (iv) an acquisition pursuant to a Non-Qualifying Transaction
(as defined in subsection (c) below);;

 

(c)the consummation
of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company
or a Subsidiary (a “Reorganization”), or the sale or other disposition of all or substantially all of the Company’s
assets (a “Sale”) or the acquisition of assets or stock of another corporation or other entity (an “Acquisition”),
unless immediately following such Reorganization, Sale or Acquisition: (A) all or substantially all of the individuals and entities
who were the Beneficial Owners, respectively, of the outstanding Company Common Stock and outstanding Company Voting Securities
immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly, more than 35% of, respectively,
the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the entity resulting from such Reorganization, Sale or Acquisition
(including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of
the Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in
substantially the same proportions as their ownership, immediately prior to such Reorganization, Sale or Acquisition, of the outstanding
Company Common Stock and the outstanding Company Voting Securities, as the case may be, and (B) no person (other than (x) the
Company or any Subsidiary, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related
trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 35% or more of the
total common stock or 35% or more of the total voting power of the outstanding voting securities eligible to elect directors of
the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent
Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Reorganization,
Sale or Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the criteria specified in (A), (B) and (C)
above shall be deemed to be a “Non-Qualifying Transaction”); or

 

(d)approval by the stockholders
of the Company of a complete liquidation or dissolution of the Company.

 

    	

    	Change of Control Agreement
Page 3

    

 

 

3.Employment Period. The
Company hereby agrees to continue Executive in its employ of the Company, and Executive hereby agrees to remain in the employ of
the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on
the first anniversary of such date (the “Employment Period”).

 

4.Terms of Employment.

 

(a)Position and Duties.

 

(i) During the Employment
Period, (A) Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the Effective Date, and (B) Executive’s services shall be performed
at the location where Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles
from such location.

 

(ii) During the Employment
Period, and excluding any periods of vacation and sick leave to which Executive is entitled, Executive agrees to devote substantially
all of his attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary
to discharge the responsibilities assigned to Executive hereunder, to use Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for
Executive to (A) serve on corporate, civic or charitable boards or committees, (B) engage in other business activities that do
not represent a conflict of interest with the full execution of his duties to the Company, and (C) manage personal investments,
so long as such activities do not significantly interfere with the performance of Executive’s responsibilities as an employee
of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities
have been conducted by Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance
of Executive’s responsibilities to the Company.

 

    	

    	Change of Control Agreement
Page 4

    

 

(b)Compensation.

 

(i) Base Salary.
During the Employment Period, Executive shall receive an annual base salary (“Annual Base Salary”) at a rate at least
equal to the rate of base salary in effect on the date of this Agreement or, if greater, on the Effective Date, paid or payable
(including any base salary which has been earned but deferred) to Executive by the Company and its affiliated companies (“Peer
Executives”). The Annual Base Salary shall be payable in accordance with the Company’s regular payroll practice for
its senior executives, as in effect from time to time. Any increase in the Annual Base Salary shall not limit or reduce any other
obligation of the Company under this Agreement. The Annual Base Salary shall not be reduced after any such increase and the term
“Annual Base Salary” shall thereafter refer to the Annual Base Salary as so increased. As used in this Agreement, the
term “affiliated companies” shall include any company controlled by, controlling or under common control with the Company.

 

(ii) Annual Bonus.
In addition to Annual Base Salary, Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual
bonus opportunity at least equal to Executive’s bonus opportunity for the last full fiscal year prior to the Effective Date
(annualized in the event that Executive was not employed by the Company for the whole of such fiscal year).

 

(iii) Incentive,
Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participate in all incentive, savings
and retirement plans, practices, policies and programs applicable generally to Peer Executives, subject to eligibility requirements
and terms and conditions of each such plan, but in no event shall such plans, practices, policies and programs provide Executive
with incentive opportunities, savings opportunities and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its affiliated companies for Executive under such plans,
practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or
if more favorable to Executive, those provided generally at any time after the Effective Date to Peer Executives.

 

(iv) Welfare Benefit
Plans. During the Employment Period, Executive and/or Executive’s eligible dependents, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the
Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to Peer Executives
and subject to eligibility requirements and terms and conditions of each such plan.

 

(v) Expenses.
During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred
by Executive in accordance with the policies, practices and procedures of the Company applicable to Peer Executives.

 

    	

    	Change of Control Agreement
Page 5

    

  

(vi) Fringe Benefits.
During the Employment Period, Executive shall be entitled to fringe benefits in accordance with the plans, practices, programs
and policies of the Company applicable to Peer Executives, subject to eligibility requirements and terms and conditions of any
such plans, practices, programs and policies.

 

5.Termination
of Employment.

 

(a)Death or Disability.
Executive’s employment shall terminate automatically upon Executive’s death during the Employment Period. If the Company
determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to Executive written notice in accordance with Section 5(d) of this Agreement of its
intention to terminate Executive’s employment. In such event, Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided
that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties.
For purposes of this Agreement, “Disability” shall mean the inability of Executive, as reasonably determined by the
Company, to perform the essential functions of his regular duties and responsibilities, with or without reasonable accommodation,
due to a medically determinable physical or mental illness which has lasted (or can reasonably be expected to last) for a period
of six (6) consecutive months. At the request of Executive or his personal representative, the determination by the Company that
the Disability of Executive has occurred shall be certified by a physician mutually agreed upon by Executive, or his personal representative,
and the Company .

 

(b)Cause. The Company may
terminate Executive’s employment during the Employment Period with or without Cause. For purposes of this Agreement, “Cause”
shall mean that Executive:

 

i) committed an act
constituting a misdemeanor involving dishonesty or moral turpitude or a felony under the laws of the United States or any state
or political subdivision thereof;

 

(ii) violated laws,
rules or regulations applicable to banks, investment banks, broker-dealers, investment advisors or the banking and securities industries
generally, or becomes ineligible to serve as an executive officer of a depository institution, depository institution holding company,
or a publicly-traded company;

 

(iii) committed an
act constituting gross negligence or willful misconduct causing harm to the Company;

 

    	

    	Change of Control Agreement
Page 6

    

  

(iv) engaged in conduct
that materially violated the internal policies or procedures of the Company and which is materially detrimental to the business,
reputation, character or standing of the Company;

 

(v) committed an act
of fraud, intentional dishonesty or misrepresentation which is materially detrimental to the business, reputation, character or
standing of the Company;

 

(vi) violated any
law relating to employment discrimination, harassment, or retaliation or any policy of the Company relating to employment discrimination,
harassment or retaliation;

 

(vii) used illegal
drugs, abused other controlled substances or worked under the influence of alcohol;

 

(viii) willfully refused
to obey lawful directives from the executive to which he reports or the Board, as applicable;

 

(ix) materially breached
any of his obligations under this Agreement; or

 

(x) engaged in a conflict
of interest or self-dealing or materially violated a code or policy of the Company relating to business conduct, ethics, legal
compliance or conflict of interest.

 

The
Company shall furnish to Executive in writing a notice of the subsection relied upon and describing the facts establishing Cause
under that subsection. In the event that the Company seeks to terminate Executive’s employment for Cause and that subsection
(iv), (viii) or (ix) above is the sole reason for termination for Cause, Executive shall have the following cure provisions and
rights. Following the Company’s delivery of the Cause notice described above, Executive shall have a period of ten (10)
days after the giving of such written notice of proposed termination by the Company in which to attempt to effect a cure of the
specified Cause. If at the end of such ten (10) day period no such cure has been effected to the satisfaction of the Board as
determined in good faith, then Executive’s employment shall be terminated for Cause as of the end of such ten (10) day period.
The Company shall be obligated to provide to Executive only one such notice of proposed termination. If subsequent to effecting
a cure of specified deficiencies under subsection (iv), (viii) or (ix) above, Executive is determined by the Board again to have
committed an act of Cause under subsection (iv), (viii) or (ix), then employment may be terminated immediately for Cause upon
the Company’s giving of notice of termination to Executive.

 

(c)Good Reason. Executive’s
employment may be terminated by Executive for Good Reason or for no reason. For purposes of this Agreement, “Good Reason”
shall mean any of the following without Executive’s consent:

 

    	

    	Change of Control Agreement
Page 7

    

  

(i) the assignment
to Executive of any duties inconsistent in any material respect with Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as in effect on the Effective Date, or any other action by the
Company which results in a material diminution in Executive’s position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by Executive;

 

(ii) the Company’s
requiring Executive to be based at any office or location that is more than 35 miles from the office or location where Executive
was based immediately prior to the Effective Date; provided, however, that Good Reason shall not include any relocation
that results in Executive’s being based at any office or location closer to Executive’s then-principal residence;

 

(iii) a material reduction
in Executive’s Annual Base Salary as in effect on the Effective Date or as the same may be increased from time to time;

 

(iv) any failure by
the Company to comply with and satisfy Section 12(c) of this Agreement; or

 

(v) the material breach
of this Agreement by the Company;

 

provided,
however, that to be effective, any resignation for Good Reason must be within ninety (90) days following the initial existence
of one or more of the preceding conditions; must be communicated to the Company in writing by Executive, indicating the subsection
relied upon and describing the facts establishing Good Reason under that subsection, no later than thirty (30) days subsequent
to the initial existence of the condition, and upon the notice of which the Company shall have a period of at least 30 days during
which it may remedy the condition. If at the end of such thirty (30) day period no such cure has been effected, then Executive
may terminate his employment for Good Reason within ten (10) days of the end of such thirty (30) day period by providing written
notice of the failure to cure and of the termination date.

 

(d)Notice of Termination.
Any termination by the Company or by Executive shall be communicated by Notice of Termination to the other party hereto given
in accordance with this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment
under the provision so indicated, and (iii) specifies the termination date (which date shall be not less than 60 days after the
giving of such notice). The failure by either party to set forth in the Notice of Termination any fact or circumstance which contributes
to a showing of Good Reason or Cause shall not waive any right of such party hereunder or preclude such party from asserting such
fact or circumstance in enforcing such party’s rights hereunder.

 

    	

    	Change of Control Agreement
Page 8

    

   

(e)Date of Termination.
“Date of Termination” means (i) if Executive’s employment is terminated other than by reason of death or Disability,
the date of receipt of the Notice of Termination, or any later date specified therein, or (ii) if Executive’s employment
is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date,
as the case may be.

 

6.Obligations
of the Company upon Termination.

 

(a)Termination by the Company
Other Than for Cause or Disability; Termination by Executive for Good Reason. If, during the Employment Period, the
Company shall terminate Executive’s employment other than for Cause or Disability, or Executive shall terminate his employment
for Good Reason, then and with respect to the payments and benefits described in Section 6(a)(i)(B) and (C) and Section 6(a)(ii)
and (iii) hereof, only if within sixty (60) days after the Date of Termination Executive shall have executed a separation agreement
containing a full general release of claims and covenant not to sue in a form satisfactory to the Company (the “Release”)
and such Release shall not have been revoked within the time period specified therein:

 

(i) the Company shall
pay to Executive in a lump sum in cash within thirty (30) days after the Date of Termination (or any later date required by Section
14 hereof) the aggregate of the following amounts:

 

A.the sum of (1) Executive’s
Base Salary through the Date of Termination to the extent not theretofore paid, and (2) any accrued vacation pay to the extent
not theretofore paid (the sum of the amounts described in clauses (1) and (2) shall be hereinafter referred to as the “Accrued
Obligations”); and

 

B.the amount equal to one (1) times
the sum of (x) Executive’s Annual Base Salary at the rate in effect on the Date of Termination, and (y) Executive’s
highest annual bonus paid by the Company, including any bonus or portion thereof which has been earned but deferred, for any of
the last three full fiscal years prior to the Date of Termination (such amount being referred to as the “Highest Annual Bonus”);

 

C.the product of
(x) Executive’s Highest Annual Bonus and (y) a fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365 (the “Final Year Bonus”);

 

(ii) if Executive elects
to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or
Executive’s eligible dependents would be entitled under Section 4980B of the Code (COBRA), then for one year following the
Date of Termination (the “Welfare Benefits Continuation Period”), the Company shall pay the excess of
(1) the COBRA cost of such coverage over (2) the amount that Executive would have had to pay for such coverage if he had remained
employed during the Welfare Benefits Continuation Period and paid the active employee rate for such coverage; provided,
however, that (A) that if Executive becomes eligible to receive group health benefits under a program of a subsequent employer
or otherwise (including coverage available to Executive’s spouse), the Company’s obligation to pay any portion of
the cost of health coverage as described herein shall cease, except as otherwise provided by law; and (B) the Welfare Benefits
Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA;  

 

    	

    	Change of Control Agreement
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 (iii) all unvested stock options
to acquire stock of the Company and all awards of restricted stock of the Company held by Executive as of the Date of Termination
shall be immediately and fully vested as of the Date of Termination and, in the case of stock options, shall be fully exercisable
as of the Date of Termination and shall remain exercisable for the period of time set forth in the applicable option agreement;
and

 

(iv) to the extent
not theretofore paid or provided, the Company shall timely pay or provide to Executive any other amounts or benefits required to
be paid or provided or which Executive is eligible to receive under any plan, program, policy or practice or contract or agreement
of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”).

 

(b)Death or Disability.
If Executive’s employment is terminated by reason of Executive’s death or Disability during the Employment Period,
this Agreement shall terminate without further obligations to Executive or Executive’s legal representatives under this Agreement,
other than for payment of Accrued Obligations, the Final Year Bonus and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after
the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as used in this Section 6(b)
shall include, without limitation, and Executive or Executive’s estate and/or beneficiaries shall be entitled to receive,
benefits under such plans, programs, practices and policies relating to death or disability or retirement, if any, as are applicable
to Executive on the Date of Termination.

 

(c)Cause or Voluntary Termination
without Good Reason. If Executive’s employment shall be terminated for Cause during the Employment Period, or if Executive
voluntarily terminates employment during the Employment Period without Good Reason, this Agreement shall terminate without further
obligations to Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination.

  

    	

    	Change of Control Agreement
Page 10

    

    

 

(d)Expiration of Employment
Period. If Executive’s employment shall be terminated due to the normal expiration of the Employment Period, this Agreement
shall terminate without further obligations to Executive, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days after the Date
of Termination.

 

7.Non-exclusivity
of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated companies and for which Executive may qualify, nor,
subject to Section 13(f), shall anything herein limit or otherwise affect such rights as Executive may have under any contract
or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice
or program or contract or agreement except as explicitly modified by this Agreement.

 

8.Full
Settlement; No Mitigation. The Company’s obligation to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement
and, except as explicitly provided herein, such amounts shall not be reduced whether or not Executive obtains other employment.

 

9.Costs
of Enforcement.

 

(a)The Company shall
reimburse Executive, on a current basis, for all reasonable legal fees and related expenses incurred by Executive in (i) contesting
or disputing any termination of Executive’s employment, or (ii) seeking to obtain or enforce any right or benefit provided
by this Agreement, provided, in each case, that Executive is successful on at least one material issue raised in such contest,
dispute or enforcement proceeding. If Executive is awarded the right to recover fees and expenses under this Section 9(a), the
reimbursement of an eligible expense shall be made within ten business days after delivery of Executive’s respective written
requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in
no event later than March 15 of the year after the year in which such rights are established.

 

(b)Executive shall
also be entitled to be paid all reasonable legal fees and expenses, if any, incurred in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Internal Revenue Code to any payment or benefit hereunder.
Such reimbursement of expenses shall be made on a current basis, as incurred, and in no event later than December 31 of the year
following the calendar year in which the taxes that are the subject of the audit or proceeding are remitted to the taxing authority,
or where as a result of such audit or proceeding no taxes are remitted, December 31 of the year following the calendar year in
which the audit is completed or there is a final and nonappealable settlement or other resolution of the proceeding.

 

    	

    	Change of Control Agreement
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10.Confidential
Information. Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have
been obtained by Executive during Executive’s employment by the Company or any of its affiliated companies and which shall
not be or become public knowledge (other than by acts by Executive or representatives of Executive in violation of this Agreement).
After termination of Executive’s employment with the Company or such affiliated companies, Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those designated by it.

 

11.Limitation
of Benefits.

 

(a)Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined that any benefit, payment or distribution by the
Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (such benefits,
payments or distributions are hereinafter referred to as “Payments”) would, if paid, be subject to the excise tax imposed
by Section 4999 of the Code (the “Excise Tax”), then the aggregate present value of the Payments shall be reduced (but
not below zero) to an amount expressed in present value that maximizes the aggregate present value of the Payments without causing
the Payments or any part thereof to be subject to the Excise Tax and therefore nondeductible by the Company because of Section
280G of the Code (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made
by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute
Value to actual present value of such Payments as of the date of the change of control, as determined by the Determination Firm
(as defined in Section 11(b) below). For purposes of this Section 11, present value shall be determined in accordance with Section
280G(d)(4) of the Code. For purposes of this Section 11, the “Parachute Value” of a Payment means the present value
as of the date of the change of control of the portion of such Payment that constitutes a “parachute payment” under
Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining whether and to what extent
the Excise Tax will apply to such Payment.

 

    	

    	Change of Control Agreement
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(b)All determinations
required to be made under this Section 11, including whether an Excise Tax would otherwise be imposed, whether the Payments shall
be reduced, the amount of the Reduced Amount, and the assumptions to be used in arriving at such determinations, shall be made
by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and
Executive (the “Determination Firm”) which shall provide detailed supporting calculations both to the Company and Executive
within 15 business days of the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested
by the Company. All fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the
Determination Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments hereunder
will have been unnecessarily limited by this Section 11 (“Underpayment”), consistent with the calculations required
to be made hereunder. The Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of Executive, but no later than March 15 of the year after the year
in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.

 

12.Successors.

 

(a)This Agreement is personal to
Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

 

(b)This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns.

 

(c)The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.

 

13.Miscellaneous.

 

(a)Waiver.
Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future
performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained
in a writing signed by the party making the waiver. 

 

    	

    	Change of Control Agreement
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(b)Severability. If any
provision or covenant, or any part thereof, of this Agreement should be held by any court to be invalid, illegal or unenforceable,
either in whole or in part, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability
of the remaining provisions or covenants, or any part thereof, of this Agreement, all of which shall remain in full force and effect.

 

(c)Status Prior to Effective
Date. Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between
Executive and the Company, the employment of Executive by the Company is “at will” and, subject to Section 1(a) hereof,
prior to the Effective Date, Executive’s employment may be terminated by either Executive or the Company at any time prior
to the Effective Date, in which case Executive shall have no further rights under this Agreement. However, absent termination of
employment of Executive, this Agreement may not be terminated by the Company during the Change of Control Period and before the
Effective Date.

 

(d)Governing Law. Except
to the extent preempted by federal law, and without regard to conflict of laws principles, the laws of the State of Florida shall
govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.

 

(e)Notices. All notices,
requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been
duly given if delivered or three days after mailing if mailed, first class, certified mail, postage prepaid:

 

	 	 	 
	 	To the Company:	Seacoast Banking Corporation of Florida
	 	 	815 Colorado Avenue
	 	 	Stuart, Florida  34994
	 	 	Attention: Chief Executive Officer
	 	 	 
	 	To Executive:	 

 

Any party may change the address to which
notices, requests, demands and other communications shall be delivered or mailed by giving notice thereof to the other party in
the same manner provided herein. 

 

(f)Amendments and Modifications.
This Agreement may be amended or modified only by a writing signed by both parties hereto, which makes specific reference to this
Agreement.

 

    	

    	Change of Control Agreement
Page 14

    

                    

(h)Entire Agreement.
Except as provided herein, this Agreement contains the entire agreement between the Company and Executive with respect to the
subject matter hereof and, from and after the date of this Agreement, this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof.

 

14.Code
Section 409A.

 

(a)General.
This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid
or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable
Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section
409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed.
Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties
or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.

 

(b)Definitional
Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would
constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred
Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt
Deferred Compensation would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment,
such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment
will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control, Disability
or termination of employment, as the case may be, meet any description or definition of “change in control event”,
“disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable
regulations (without giving effect to any elective provisions that may be available under such definition). This provision does
not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control,
Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt
Deferred Compensation, or the application of a different form of payment, such payment or distribution shall be made at the time
and in the form that would have applied absent the non-409A-conforming event.

 

(c)Six-Month
Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that
would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of
Executive’s separation from service during a period in which he is a Specified Employee (as defined below), then, subject
to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order),
(j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of

employment taxes): (i) the amount of such
Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Executive’s
separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s
separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case,
the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions
will resume at the end of the Required Delay Period. For purposes of this Agreement, the term “Specified Employee”
has the meaning given such term in Code Section 409A and the final regulations thereunder. 

 

    	

    	Change of Control Agreement
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(d)Treatment
of Installment Payments. Each payment of termination benefits under Section 6 of this Agreement shall be considered a separate
payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

 

(e)Timing of
Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a separation
agreement including a release of claims, such separation agreement including the release must be executed and all revocation periods
shall have expired within 60 days after the date of termination or resignation; failing which such payment or benefit shall be
forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to Section 14(c) above, such
payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall
be accumulated and paid on the 60th day after the date of termination or resignation provided such separation agreement
including the release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt
from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period.

 

(f)Timing of
Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under Sections
4(b)(v) and (vi) or Section 6(a)(ii), and such payments or reimbursements are includible in Executive’s federal gross taxable
income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other
calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year
in which the expense was incurred. No right of Executive to reimbursement of expenses under Sections 4(b)(v) and (vi) or Section
6(a)(ii) shall be subject to liquidation or exchange for another benefit.

 

(g)Permitted
Acceleration. The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg.
Section 1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg.
Section 1.409A-3(j)(4).

 

 

    	

    	Change of Control Agreement
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IN WITNESS WHEREOF, the parties hereto
have duly executed and delivered this Change in Control Employment Agreement as of the date first above written.

 

 

	 	Seacoast Banking Corporation of Florida
	 	 	 
	 	 	 
	 	By:	/s/ Dennis S. Hudson, III
	 	 	Dennis S. Hudson, III
	 	Title:	Chairman
	 	 	 
	 	 	 
	 	EXECUTIVE: 
	 	 	 
	 	 	 
	 	/s/ Stephen A. Fowle

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