Document:

RESTRICTED
STOCK UNIT AGREEMENT

POLARITYTE,
INC.

 

This
RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) is made and entered into effective July 3, 2018 (the “Grant
Date”) by and between PolarityTE, Inc., a Delaware corporation (the “Company”) and the person whose
name is listed as the “Grantee” on the signature page of this Agreement.

 

Recitals

 

A.
This Agreement is made under the Company’s 2017 Equity Incentive Plan and as subsequently amended from time to time (the
“Plan”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms
in the Plan.

 

B.
Grantee is an employee or consultant or director who is to render valuable services to the Company or one or more Subsidiaries,
and this Agreement is executed pursuant to, and is intending to carry out the purposes of, the Plan in connection with the grant
of a restricted stock unit award pursuant to which shares of the Company’s common stock, par value $0.001 (“Common
Stock”), may be issued to Grantee under the Plan.

 

Agreement

 

NOW,
THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

 

1.
Grant of Restricted Stock Units.

 

1.1
The Company hereby issues to the Grantee on the Grant Date an award consisting of, in the aggregate, 30,000 Restricted
Stock Units (the “Restricted Stock Units”). Each Restricted Stock Unit represents the right to receive one
share of Common Stock, subject to the terms and conditions set forth in this Agreement.

 

1.2
The Restricted Stock Units shall be credited to a separate account maintained for the Grantee on the books and records of the
Company, and all amounts credited to the said account shall continue for all purposes to be part of the general assets of the
Company.

 

2.
Consideration. The grant of the Restricted Stock Units is made in consideration of the services to be rendered by the Grantee
to the Company.

 

3.
Vesting.

 

3.1
Except as otherwise stated herein, provided that the Grantee remains as an employee, consultant, or director of the Company through
the applicable vesting date, the right to receive Common Stock on the basis of the Restricted Stock Units will vest in accordance
with the schedule set forth below. The period during which a Restricted Stock Unit is not vested is the “Restriction
Period”. 

 

    	 

    	 

    

 

	Number of Shares That
    Vest 	 	Vesting Date/ Conditions
	7,500	 	12/29/18
	7,500	 	6/29/19
	7,500	 	12/29/19
	7,500	 	6/29/20

 

3.2
The foregoing vesting schedule notwithstanding and subject to the provisions set forth below in this Section 3.2, if the Grantee’s
employment, consultancy, or Board service terminates for any reason at any time before all of Grantee’s Restricted Stock
Units have vested, the Grantee’s unvested Restricted Stock Units shall be automatically forfeited upon such termination
and neither the Company nor any Affiliate shall have any further obligations to the Grantee under this Agreement.

 

(a)
During any authorized leave of absence, the running of Restriction Periods that have not lapsed within 90 days following the first
day of the leave of absence shall be suspended after the leave of absence exceeds a period of 90 days. Restriction Periods that
are suspended due to a leave of absence shall resume upon the Grantee’s termination of the leave of absence and return to
service, and the end date of the Restriction Periods shall be extended by the length of the suspension.

 

(b)
In the event the Grantee’s employment with or service to the Company terminates due to death or disability, Restriction
Periods that have not previously lapsed will accelerate and lapse immediately prior to such termination of service. The term “disability”
shall mean Grantee’s inability to engage in any substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death, or can be expected to last for a continuous period of not less
than 12 months.

 

(c)
In the event there is a Change in Control, Restriction Periods that have not previously lapsed will accelerate and lapse immediately
prior to the Change in Control event.

 

4.
Restrictions. Subject to any exceptions set forth in this Agreement, during the Restriction Period and until such time
as the Restricted Stock Units are settled in accordance with Section 6, below, Restricted Stock Units or the rights relating thereto
may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to
assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock Units or the rights relating thereto
shall be wholly ineffective and, if any such attempt is made, the Restricted Stock Units will be forfeited by the Grantee and
all of the Grantee’s rights to such units shall immediately terminate without any payment or consideration by the Company.

 

    	 	2	 

    	 

    

 

5.
Rights as Shareholder; Dividend Equivalents.

 

5.1
The Grantee shall not have any rights of a shareholder with respect to the shares of Common Stock underlying the Restricted Stock
Units unless and until the Restricted Stock Units vest and are settled by the issuance of such shares of Common Stock.

 

5.2
Upon and following the settlement of the Restricted Stock Units, the Grantee shall be the record owner of the shares of Common
Stock underlying the Restricted Stock Units unless and until such shares are sold or otherwise disposed of, and as record owner
shall be entitled to all rights of a shareholder of the Company (including voting rights).

 

5.3
Until such time as the Restricted Stock Units vest, the Grantee’s Account shall be credited with an amount equal to all
cash and stock dividends (“Dividend Equivalents”) that would have been paid to the Grantee if one share of
Common Stock had been issued on the Grant Date for each Restricted Stock Unit granted to the Grantee as set forth in this Agreement.
Dividend Equivalents shall be subject to the same vesting restrictions as the Restricted Stock Units to which they are attributable
and shall be paid on the same date that the Restricted Stock Units to which they are attributable are settled in accordance with
Section 6 hereof. Dividend Equivalents credited to a Grantee’s Account shall be distributed in cash or, at the discretion
of the Board, in shares of Common Stock having a Fair Market Value equal to the amount of the Dividend Equivalents and interest,
if any.

 

6.
Settlement of Restricted Stock Units. Subject to Section 9 hereof, promptly following the vesting date, and in any event
no later than March 15 of the calendar year following the calendar year in which such vesting occurs, the Company shall (a) issue
and deliver to the Grantee the number of shares of Common Stock that have vested pursuant to the terms of this Agreement and cash
equal to any Dividend Equivalents credited with respect to such vested units and the interest thereon or, at the discretion of
the Board, shares of Common Stock having a Fair Market Value equal to such Dividend Equivalents and the interest thereon; and
(b) enter the Grantee’s name on the books of the Company as the shareholder of record with respect to the shares of Common
Stock delivered to the Grantee.

 

7.
No Right to Continued Service. This Agreement shall not be construed under any circumstance to confer upon the Grantee
any right to be retained in any position, as an employee or consultant or director of the Company. Further, nothing in the Plan
or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s employment at any
time, with or without cause, or to take such action with respect to a consultant or director as would otherwise be permissible
under any other applicable agreements or the Company’s bylaws.

 

8.
Adjustments. If any change is made to the outstanding Common Stock or the capital structure of the Company, if required,
the Restricted Stock Units shall be adjusted or terminated in any manner as contemplated by the Plan.

 

    	 	3	 

    	 

    

 

9.
Tax Liability and Withholding.

 

9.1
The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid
to the Grantee pursuant to this Agreement or otherwise, the amount of any required withholding taxes in respect of the Restricted
Stock Units and to take all such other action as the Company deems necessary to satisfy all obligations for the payment of such
withholding taxes. The Company may, at its discretion, permit the Grantee to satisfy any federal, state or local tax withholding
obligation by any of the following means, or by a combination of such means:

 

(a)
tendering a cash payment;

 

(b)
authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable or deliverable to
the Grantee as a result of the vesting of the Restricted Stock Units; provided, however, that no shares of Common Stock
shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law; or

 

(c)
delivering to the Company previously owned and unencumbered shares of Common Stock.

 

9.2
Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related
withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s
responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in
connection with the grant, vesting or settlement of the Restricted Stock Units or the subsequent sale of any shares; and (b) does
not commit to structure the Restricted Stock Units to reduce or eliminate the Grantee’s liability for Tax-Related Items.

 

10.
Compliance with Law. The issuance and transfer of shares of Common Stock shall be subject to compliance by the Company
and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of
any stock exchange on which the Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued
or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully
complied with to the satisfaction of the Company and its counsel.

 

11.
Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the
Corporate Secretary of the Company at the Company’s principal corporate offices. Any notice required to be delivered to
the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as shown in the
records of the Company. Either party may designate another address in writing (or by such other method approved by the Company)
from time to time.

 

12.
Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without
regard to conflict of law principles.

 

    	 	4	 

    	 

    

 

13.
Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon
and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein,
this Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s)
to whom the Restricted Stock Units may be transferred by will or the laws of descent or distribution.

 

14.
Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, and each provision of this Agreement shall be severable and enforceable to the extent
permitted by law.

 

15.
Discretionary Nature of Award. The grant of the Restricted Stock Units in this Agreement does not create any contractual
right or other right to receive any Restricted Stock Units or other awards in the future. Future awards, if any, will be at the
sole discretion of the Company.

 

16.
Amendment. This Agreement may be amended only through a written instrument signed by the parties hereto.

 

17.
Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be
construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under
Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided
under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of
any taxes, penalties, interest or other expenses that may be incurred by the Grantee on account of non-compliance with Section
409A of the Code.

 

18.
No Impact on Other Benefits. The value of the Grantee’s Restricted Stock Units is not part of Grantee’s normal
or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar benefit.

 

19.
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission,
by electronic mail in “pdf” or “jpeg” format, or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document
bearing an original signature.

 

20.
Acceptance. The Grantee has read and understands the terms and provisions hereof, and accepts the Restricted Stock Units
subject to all of the terms and conditions of this Agreement. The Grantee acknowledges that there may be adverse tax consequences
upon the vesting or settlement of the Restricted Stock Units or disposition of the underlying shares and that the Grantee has
been advised to consult a tax advisor prior to such vesting, settlement or disposition.

 

[Signatures
on following page.]

 

    	 	5	 

    	 

    

 

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

 

	POLARITYTE, INC.	 
	 	 	 
	By:	/s/
    Denver Lough    	 
	Name:	Denver Lough, MD,
    PhD  	 
	Title:	Chairman and Chief
    Executive Officer 	 

 

	WILLIE
BOGAN	 
	Print
Name of Grantee	 
	 	 
	/s/
        Willie C. Bogan 

	 
	Signature
of Grantee	 
	 	 
	Grantee’s
Address	 
	 	 
	1943
Rosecrest Drive 

	 
	 	 
	Oakland,
CA 94602 	 
	 	 
	415-xxx-xxxx
	 
	 	 
	Email:
willie_bogan@xxxxxx

	 

 

    	 	6ex_123981.htm

 

Loan Agreement

 

This Loan Agreement (this “Loan Agreement”), dated as of September 12, 2018, is entered into between Windtree Therapeutics, Inc., a Delaware corporation with its principal offices at 2600 Kelly Rd., Suite 100, Warrington, PA 18976 (“Borrower”), and LPH Investments Ltd., a Cayman Islands company organized and existing under the laws of Cayman Islands with its principal offices at 1/F, Building 20E, Phase 3, Hong Kong Science Park, Shatin, Hong Kong (“Lender”).

 

RECITALS

 

WHEREAS, Lender is the owner of a majority in interest of Borrower’s issued and outstanding shares of common stock (the “Common Stock”);

 

WHEREAS, Borrower is in immediate need of capital to support its continuing operations; and

 

WHEREAS, Lender has agreed to advance funds to Borrower on the terms provided in this Loan Agreement to allow Borrower sufficient time to pursue a potential strategic transaction intended to allow Borrower to diversify its product offerings and secure the additional capital that it requires to advance the AEROSURF® development program and support its continuing operations (the “Strategic Transaction”);

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

"Loan" means the loan made by Lender to Borrower in the amount of Five Hundred Thousand Dollars ($500,000), which amount is payable in U.S. dollars in cash on or before September 12, 2018.

 

“Encumbrance” has the meaning set forth in Section 2.5.

 

"Maturity Date" means the earlier of (i) the closing date (the “Closing Date”) of the Strategic Transaction, provided that in connection with the Strategic Transaction, Borrower shall secure additional cash resources in a minimum amount of Thirty Million Dollars ($30,000,000) and (ii) March 31, 2019.

 

“Strategic Transaction” has the meaning set forth in the Recitals to this Agreement.

 

 

 

 

ARTICLE II

 

TERM LOAN

 

2.1     Agreement to Make Loan. On the terms and subject to the conditions of this Loan Agreement, Lender agrees to fund the Loan to Borrower Five Hundred Thousand Dollars ($500,000) on or before September 12, 2018. The proceeds of the Loan shall be paid by wire transfer to an account designated in writing by Borrower.

 

2.2     Payment Terms. The entire unpaid principal balance of the Loan, together with accrued interest thereon, shall be due and payable on the Maturity Date.

 

2.3     Interest Rate. The Loan shall bear interest on the outstanding principal amount of the Loan at a rate per annum equal to six percent (6%) (“the Contracted Interest Rate”). If Borrower fails to repay the principal amount of the Loan on the due date, Lender shall charge Borrower interest at a rate equal to the lower of 30% above the Contracted Interest Rate (referred to as the “Defaulted Interest Rate”) or the maximum interest rate permitted by law on overdue sums from and including the due date to the actual payment date. If Borrower fails to repay the accrued interest and default interest on the due date, the Defaulted Interest Rate shall be calculated monthly on the interest payment date.

 

2.4     Prepayment. Borrower may, at its option, prepay the Loan, in whole or in part, prior to the Maturity Date. Each prepayment shall include interest on the amount prepaid to the date of prepayment.

 

2.5     Negative Pledge. Borrower shall not, without the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed, create, suffer to exist, or permit to subsist, any mortgage, pledge, lien, charge, privilege, priority, encumbrance or other security interest of any kind or nature whatsoever and howsoever arising (referred to as the “Encumbrance”) upon all or any part of its present or future undertakings, assets, or revenues, except for the following (“Permitted Encumbrances”):

 

(a) any such Encumbrance created in the ordinary course of Borrower’s development activities and business transactions, including without limitation,

 

(i) with respect to accounts maintained in the ordinary course and held at financial institutions to secure standard fees for services charged by such institutions, including liens of a collection bank arising in the ordinary course;

 

(ii) obligations in respect of purchase money financing, capital lease obligations and equipment financing facilities covering existing and newly-acquired equipment, including for the acquisition, installation, qualification and validation of such equipment;

 

(iii) liens in favor of landlords under real property leases granted by Borrower, and letter of credit deposits related thereto;

 

(iv) liens related to workers’ compensation, unemployment insurance and other social security legislation;

 

2

 

 

 

(v) liens arising under leases, licenses or subleases granted to others not interfering in any material respect with the business of Borrower;

 

(vi) and liens on advances in favor of a vendor providing goods or services; and

 

(vii) the security interest in favor or Panacea Venture Management Company Ltd. pursuant to that certain Secured Convertible Promissory Note dated July 2, 2018;

 

(b) any Encumbrance in favor of Lender;

 

(c) statutory liens created by operation of law and Encumbrances arising in connection with outstanding contractual obligations; and;

 

(d) liens for taxes, assessments or governmental charges or levies.

 

2.6     Representations and Warranties. Borrower represents and warrants to Lender that:

 

(a) No Encumbrance. All of Borrower’s assets are free and clear of any Encumbrance as of the date hereof except for Permitted Encumbrances;

 

(b) Ownership of Properties. Borrower has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title that, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; and

 

(c) Litigation. There are no actions, suits, proceedings, claims, disputes or investigations pending or, to the knowledge of Borrower, threatened, at law, in equity, in arbitration or before any governmental authority, by or against Borrower or against any of its properties or revenues that (a) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect or (b) purport to affect or pertain to this Loan Agreement or any other loan agreement or any of the transactions contemplated hereby.

 

2.7     Security Interest. Borrower grants to Lender a continuing lien and security interest in substantially all of Borrower’s assets to secure its obligations hereunder and all such obligations shall be deemed to be “Secured Obligations” as described in that certain Security Agreement by and between Borrower and Lender dated March 1, 2018 (the “Security Agreement”), and such security interest shall be subject to and governed by the terms of the Security Agreement.

 

ARTICLE III

 

DEFAULTS AND REMEDIES

 

3.1      Events of Default. Any one or more of the following events shall constitute an event of default hereunder (an "Event of Default"):

 

a)     Borrower fails to make any required payment required on the Loan within five (5) days after Borrower's receipt of written notice of default from Lender;

 

b)     Borrower breaches any representation, warranty, covenant or pledge made by Borrower in this Loan Agreement or otherwise in connection with the Loan;

 

3

 

 

 

c)     if, pursuant to the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law"), Borrower shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for relief against it in an involuntary case; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing its inability to pay its debts as they become due; or

 

d)     if a court enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or substantially all of Borrower's properties, or (iii) orders the liquidation of Borrower.

 

3.2      Remedies. Upon the occurrence of an Event of Default, Lender, at its option, may take one or more of the following remedial steps:

 

a)     Upon notice to Borrower, the entire principal amount of the Loan shall become immediately due and payable, without presentment, demand for payment, protest, notice of nonpayment or protest, notice of dishonor or any other notice or demand, all of which are hereby expressly waived; and

 

b)     Take any action at law or in equity to collect from Borrower the payments then due and thereafter to become due under the Loan or to enforce performance and observance of any obligation or agreement of Borrower under the Loan.

 

c)     Resort to any remedy available to Lender under the Security Agreement.

 

3.3     No Remedy Exclusive. No remedy of Lender is intended to be exclusive of any other available remedy, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Loan Agreement or by applicable law. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof.

 

ARTICLE IV

 

MISCELLANEOUS

 

4.1     Notice. Any notice to a party to this Agreement shall be in writing and sent to the respective addresses set forth in the introductory paragraph of this Agreement (or such other address as a party shall designate in writing) by certified mail, return receipt requested, or by nationally recognized overnight courier. All notices shall be effective upon the earlier of (a) three days after being sent or (b) receipt.

 

4.2     Successors and Assigns. This Loan Agreement contains the entire agreement of the parties with respect to its subject matter and may not be amended except by a written instrument signed by the party to be charged with such amendment. This Loan Agreement shall be binding on and inure to the benefit of the successors and assigns of the parties, except that Borrower shall not have the right to assign its rights or obligations hereunder.

 

4

 

 

 

4.3     Judicial Proceedings. This Loan Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflict of laws principles. All claims or actions arising from this Loan Agreement shall be litigated in the federal courts for the Southern District of New York or the state courts located in the county of New York. Borrower and Lender hereby irrevocably submit to the jurisdiction of such courts and waive any claim that any action brought in such a court has been brought in an inconvenient forum

 

4.4     Captions. The section headings of this Loan Agreement are for reference purposes only and shall not affect the interpretation of this Agreement.

 

4.5     Severability. If any provision of this Loan Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision.

 

4.6     Waiver of Jury Trial. BORROWER AND LENDER HEREBY WAIVE ALL RIGHTS TO DEMAND A JURY TRIAL FOR ANY ACTIONS ARISING FROM THIS LOAN AGREEMENT.

 

In Witness Whereof, the parties hereto have caused this Loan Agreement to be executed by their duly authorized officers as of the date first written above.

 

 

 

 

	
			WINDTREE THERAPEUTICS, INC.

				
			LPH INVESTMENTS LTD.

			
	
			 

				
			 

			
	
			 

				
			 

			
	
			By:      /s/ Craig Fraser                                   

				
			By:      /s/ Benjamin Li, Ph.D.                        

			
	
			Name: Craig Fraser

				
			Name: Benjamin Li, Ph.D.

			
	
			Title:   President and Chief Executive Officer

				
			Title:   Chief Executive Officer

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