Document:

Exhibit 4.13

 

MILESTONE PHARMACEUTICALS INC.

 

2019 EMPLOYEE SHARE PURCHASE PLAN

 

ADOPTED BY THE BOARD OF DIRECTORS: APRIL 10, 2019

APPROVED BY THE SHAREHOLDERS: APRIL 29, 2019

IPO DATE: MAY 8, 2019

 

1.                                      GENERAL; PURPOSE.

 

(a)                                 The Plan provides a means by which Eligible Employees of the Company and certain Designated Companies may be given an opportunity to purchase Common Shares.  The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan.

 

(b)                                 The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations and Affiliates.

 

(c)                                  The Plan includes two components: a 423 Component and a Non-423 Component.  The Company intends (but makes no undertaking or representation to maintain) the 423 Component to qualify as an Employee Stock Purchase Plan.  The provisions of the 423 Component, accordingly, will be construed in a manner that is consistent with the requirements of Section 423 of the Code.  In addition, this Plan authorizes grants of Purchase Rights under the Non-423 Component that do not meet the requirements of an Employee Stock Purchase Plan.  Except as otherwise provided in the Plan or determined by the Board, the Non-423 Component will operate and be administered in the same manner as the 423 Component.  In addition, the Company may make separate Offerings which vary in terms (provided that such terms are not inconsistent with the provisions of the Plan or the requirements of an Employee Stock Purchase Plan), and the Company will designate which Designated Company is participating in each separate Offering.

 

2.                                      ADMINISTRATION.

 

(a)                                 The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).

 

(b)                                 The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(i)                                    To determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical).

 

(ii)                                To designate from time to time which Related Corporations will be eligible to participate in the Plan as Designated 423 Corporations or as Designated Non-423 Corporations, which Affiliates may be excluded from participation in the Plan, and which Designated Companies will participate in each separate Offering (to the extent that the Company makes separate Offerings).

 

(iii)                            To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration.  The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it deems necessary or expedient to make the Plan fully effective.

 

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(iv)                             To settle all controversies regarding the Plan and Purchase Rights granted under the Plan.

 

(v)                                 To suspend or terminate the Plan at any time as provided in Section 12.

 

(vi)                             To amend the Plan at any time as provided in Section 12.

 

(vii)                         Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company, its Related Corporations, and Affiliates and to carry out the intent that the 423 Component be treated as an Employee Stock Purchase Plan.

 

(viii)                     To adopt such rules, procedures and sub-plans relating to the operation and administration of the Plan as are necessary or appropriate under applicable local laws, regulations and procedures to permit or facilitate participation in the Plan by Employees who are foreign nationals or employed or located outside the United States.  Without limiting the generality of, but consistent with, the foregoing, the Board specifically is authorized to adopt rules, procedures, and sub-plans, which, if applicable to a Designated Non-423 Corporation, do not have to comply with the requirements of Section 423 of the Code, regarding, without limitation, eligibility to participate in the Plan, the definition of eligible “earnings,” handling and making of Contributions, establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share issuances, any of which may vary according to applicable requirements.

 

(c)                                  The Board may delegate some or all of the administration of the Plan to a Committee or Committees.  If administration is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan and in any applicable Offering Document to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  Further, to the extent not prohibited by applicable law, the Board or Committee may, from time to time, delegate some or all of its authority under the Plan to other persons or groups of persons as it deems necessary, appropriate, or advisable under conditions or limitations that it may set at or after the time of the delegation.  The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.  Whether or not the Board has delegated administration of the Plan to a Committee, the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.

 

(d)                                 All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

 

3.                                      COMMON SHARES SUBJECT TO THE PLAN.

 

(a)                                 Subject to the provisions of Section 11(a) relating to Capitalization Adjustments and the following sentence regarding the Evergreen Increase, the initial number of Common Shares that may be issued under the Plan shall equal                                       shares (the “Share Reserve”).  In addition, the Share Reserve will automatically increase on January 1st of each year for a period of up to ten (10) years, commencing on January 1, 2020 and ending on (and including) January 1, 2029 (each, an “Evergreen Date”), in an amount equal to the lesser of (i) one percent (1%) of the total number of Capital Shares outstanding on December 31st immediately preceding the applicable Evergreen Date, and (ii) 487,837 shares (the “Evergreen Increase”).  Notwithstanding the foregoing, the Board may act prior to the Evergreen Date of a given year

 

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to provide that there will be no Evergreen Increase for such year or that the Evergreen Increase for such year will be a lesser number of Common Shares than would otherwise occur pursuant to the preceding sentence.  For the avoidance of doubt, up to the maximum number of Common Shares reserved under this Section 3(a) may be used to satisfy purchases of Common Shares under the 423 Component and any remaining portion of such maximum number of shares may be used to satisfy purchases of Common Shares under the Non-423 Component.

 

(b)                                 If any Purchase Right granted under the Plan terminates without having been exercised in full, the Common Shares not purchased under such Purchase Right will again become available for issuance under the Plan.

 

(c)                                  The shares purchasable under the Plan will be shares of authorized but unissued Common Shares.

 

4.                                      GRANT OF PURCHASE RIGHTS; OFFERING.

 

(a)                                 The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board.  Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and, with respect to the 423 Component, will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges.  The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan.  The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the Offering Document or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive.

 

(b)                                 If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in forms delivered to the Company or a third party designated by the Company (each, a “Company Designee”): (i) each form will apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.

 

(c)                                  The Board will have the discretion to structure an Offering so that if the Fair Market Value of a Common Share on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of a Common Share on the Offering Date for that Offering, then (i) that Offering will terminate immediately as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.

 

5.                                      ELIGIBILITY.

 

(a)                                 Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation or an Affiliate.  Except as provided in Section 5(b) or as required by applicable law, an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company, a Related Corporation or an Affiliate, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event will the required period of continuous employment be equal

 

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to or greater than two years.  In addition, the Board may provide that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company, the Related Corporation, or the Affiliate, as applicable, is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code with respect to the 423 Component and applicable laws.

 

(b)                                 The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering.  Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:

 

(i)                                    the date on which such Purchase Right is granted will be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;

 

(ii)                                the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and

 

(iii)                            the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Purchase Right under that Offering.

 

(c)                                  No Employee will be eligible for the grant of any Purchase Rights if, immediately after any such Purchase Rights are granted, such Employee owns shares possessing five percent or more of the total combined voting power or value of all classes of shares of the Company or of any Related Corporation.  For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the share ownership of any Employee, and shares which such Employee may purchase under all outstanding Purchase Rights and options will be treated as shares owned by such Employee.

 

(d)                                 As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations or Affiliates, do not permit such Eligible Employee’s rights to purchase shares of the Company or any Related Corporation or Affiliates to accrue at a rate which, when aggregated, exceeds US$25,000 of Fair Market Value of such shares (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time, subject to compliance with applicable laws.

 

(e)                                  Officers of the Company and any Designated Company, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan.  Notwithstanding the foregoing, the Board may provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.

 

(f)                                   Notwithstanding anything in this Section 5 to the contrary, in the case of an Offering under the Non-423 Component, an Eligible Employee (or group of Eligible Employees) may be excluded from participation in the Plan or an Offering if the Board has determined, in its sole discretion, that participation of such Eligible Employee(s) is not advisable or practical for any reason.

 

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6.                                      PURCHASE RIGHTS; PURCHASE PRICE.

 

(a)                                 On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to that number of Common Shares (rounded down to the nearest whole share) purchasable either with a percentage or with a maximum dollar amount, as designated by the Board, but in either case not exceeding 15% of such Employee’s earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.

 

(b)                                 The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and Common Shares will be purchased in accordance with such Offering.

 

(c)                                  In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of Common Shares that may be purchased by any Participant on any Purchase Date during such Offering, (ii) a maximum aggregate number of Common Shares that may be purchased by all Participants pursuant to such Offering and/or (iii) a maximum aggregate number of Common Shares that may be purchased by all Participants on any Purchase Date under the Offering.  If the aggregate purchase of Common Shares issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participant’s accumulated Contributions) allocation of Common Shares (rounded down to the nearest whole share) available will be made in as nearly a uniform manner as will be practicable and equitable.

 

(d)                                 The purchase price of Common Shares acquired pursuant to Purchase Rights will be not less than the lesser of:

 

(i)                                    an amount equal to 85% of the Fair Market Value of the Common Shares on the Offering Date; or

 

(ii)                                an amount equal to 85% of the Fair Market Value of the Common Shares on the applicable Purchase Date.

 

7.                                      PARTICIPATION; WITHDRAWAL; TERMINATION.

 

(a)                                 An Eligible Employee may elect to authorize payroll deductions as the means of making Contributions by completing and delivering to the Company or Company Designee, within the time specified in the Offering, an enrollment form provided by the Company or Company Designee. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participant’s Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where applicable laws or regulations require that Contributions be deposited with a Company Designee or otherwise segregated.  If permitted in the Offering, a Participant may begin such Contributions with the first payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering).  If permitted in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions.  If required under applicable laws or regulations or if specifically provided in the Offering, in addition to or instead of making Contributions by payroll deductions, a Participant may make Contributions through a payment by cash, check, or wire transfer prior to a Purchase Date, in a manner directed by the Company or a Company Designee.

 

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(b)                                 During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company or a Company Designee a withdrawal form provided by the Company.  The Company may impose a deadline before a Purchase Date for withdrawing.  Upon such withdrawal, such Participant’s Purchase Right in that Offering will immediately terminate and the Company will distribute as soon as practicable to such Participant all of his or her accumulated but unused Contributions and such Participant’s Purchase Right in that Offering shall thereupon terminate.  A Participant’s withdrawal from that Offering will have no effect upon his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.

 

(c)                                  Unless otherwise required by applicable law, Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason or (ii) is otherwise no longer eligible to participate.  In this regard, unless otherwise determined by the Board, a Participant whose employment transfers or whose employment terminates with an immediate rehire (with no break in service) by or between the Company and a Designated Company will not be treated as having terminated employment for purposes of participating in the Plan or an Offering; however, if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s Purchase Right will be qualified under the 423 Component only to the extent such exercise complies with Section 423 of the Code.  If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the Purchase Right will remain non-qualified under the Non-423 Component.  In the event that a Participant’s Purchase Right is terminated under the Plan, the Company will distribute as soon as practicable to such individual all of his or her accumulated but unused Contributions.

 

(d)                                 During a Participant’s lifetime, Purchase Rights will be exercisable only by such Participant.  Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution, or, if permitted by the Company, by a beneficiary designation as described in Section 10.

 

(e)                                  Unless otherwise specified in the Offering or required by applicable law, the Company will have no obligation to pay interest on Contributions.

 

8.                                      EXERCISE OF PURCHASE RIGHTS.

 

(a)                                 On each Purchase Date, each Participant’s accumulated Contributions will be applied to the purchase of Common Shares (rounded down to the nearest whole share), up to the maximum number of Common Shares permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering.  No fractional shares will be issued unless specifically provided for in the Offering.

 

(b)                                 Unless otherwise provided in the Offering, if any amount of accumulated Contributions remains in a Participant’s account after the purchase of Common Shares and such remaining amount is less than the amount required to purchase one Common Share on the final Purchase Date of an Offering, then such remaining amount will be held in such Participant’s account for the purchase of Common Shares under the next Offering under the Plan, unless such Participant withdraws from or is not eligible to participate in such Offering, in which case such amount will be distributed to such Participant after the final Purchase Date, without interest, unless the payment of interest is required by applicable laws.  If the amount of Contributions remaining in a Participant’s account after the purchase of Common Shares is at least equal to the amount required to purchase one whole Common Share on the final Purchase Date of an Offering, then such remaining amount will not roll over to the next Offering and will instead be distributed in full to such Participant after the final Purchase Date of such Offering without interest, unless the payment of interest is required by applicable laws.

 

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(c)                                  No Purchase Rights may be exercised to any extent unless the Common Shares to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable U.S. federal and state, foreign and other securities, exchange control and other laws applicable to the Plan.  If on a Purchase Date the Common Shares are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and the Purchase Date will be delayed until the Common Shares are subject to such an effective registration statement and the Plan is in material compliance, except that the Purchase Date will not be delayed more than 12 months and the Purchase Date will in no event be more than 27 months from the Offering Date.  If, on the Purchase Date, as delayed to the maximum extent permissible, the Common Shares are not registered and the Plan is not in material compliance with all applicable laws or regulations, as determined by the Company in its sole discretion, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed as soon as practicable to the Participants without interest, unless the payment of interest is required by applicable laws.

 

9.                                      COVENANTS OF THE COMPANY.

 

The Company will seek to obtain from each U.S. federal or state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell Common Shares thereunder unless the Company determines, in its sole discretion, that doing so would cause the Company to incur costs that are unreasonable.  If, after commercially reasonable efforts, the Company is unable to obtain the authority that counsel for the Company deems necessary for the grant of Purchase Rights or the lawful issuance and sale of Common Shares under the Plan, and at a commercially reasonable cost, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Common Shares upon exercise of such Purchase Rights.

 

10.                               DESIGNATION OF BENEFICIARY.

 

(a)                                 The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any Common Shares and/or Contributions from the Participant’s account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant.  The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company or as approved by the Company for use by a Company Designee.

 

(b)                                 If a Participant dies, in the absence of a valid beneficiary designation, the Company will deliver any Common Shares and/or Contributions to the executor or administrator of the estate of the Participant.  If no executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such Common Shares and/or Contributions, without interest, unless the payment of interest is required by applicable laws, to the Participant’s spouse, dependents or relatives, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

 

11.                               ADJUSTMENTS UPON CHANGES IN COMMON SHARES; CORPORATE TRANSACTIONS.

 

(a)                                 In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering.  The Board will make these adjustments, and its determination will be final, binding and conclusive.

 

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(b)                                 In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the shareholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the Participants’ accumulated Contributions will be used to purchase Common Shares (rounded down to the nearest whole share) within ten business days prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.

 

12.                               AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.

 

(a)                                 The Board may amend the Plan at any time in any respect the Board deems necessary or advisable.  However, except as provided in Section 11(a) relating to Capitalization Adjustments, shareholder approval will be required for any amendment of the Plan for which shareholder approval is required by applicable laws, regulations or listing requirements, including any amendment that either (i) materially increases the number of Common Shares available for issuance under the Plan, (ii) materially expands the class of individuals eligible to become Participants and receive Purchase Rights, (iii) materially increases the benefits accruing to Participants under the Plan or materially reduces the price at which Common Shares may be purchased under the Plan, (iv) materially extends the term of the Plan, or (v) expands the types of awards available for issuance under the Plan, but in each of (i) through (v) above only to the extent shareholder approval is required by applicable laws, regulations, or listing requirements.

 

(b)                                 The Board may suspend or terminate the Plan at any time.  No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.

 

(c)                                  Any benefits, privileges, entitlements and obligations under any outstanding Purchase Rights granted before an amendment, suspension or termination of the Plan will not be materially impaired by any such amendment, suspension or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to comply with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Stock Purchase Plans) including without limitation any such regulations or other guidance that may be issued or amended after the Effective Date, or (iii) as necessary to obtain or maintain any special tax, listing, or regulatory treatment.  To be clear, the Board may amend outstanding Purchase Rights without a Participant’s consent if such amendment is necessary to ensure that the Purchase Right and/or the 423 Component complies with the requirements of Section 423 of the Code, or other applicable laws, listing requirements, or governmental regulations.

 

Notwithstanding anything in the Plan or any Offering Document to the contrary, the Board will be entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars; (ii) permit Contributions in excess of the amount designated by a Participant in order to adjust for mistakes in the Company’s processing of properly completed Contribution elections; (iii) establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Shares for each Participant properly correspond with amounts withheld from the Participant’s Contributions; (iv) amend any outstanding Purchase Rights or clarify any ambiguities regarding the terms of any Offering to enable the Purchase Rights to qualify under and/or comply with Section 423 of the Code; and (v) establish other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan. The actions of the Board pursuant to this paragraph will not be considered to alter or impair any Purchase Rights granted under an

 

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Offering as they are part of the initial terms of each Offering and the Purchase Rights granted under each Offering.

 

13.                               SECTION 409A OF THE CODE; TAX QUALIFICATION.

 

(a)                                 Purchase Rights granted under the 423 Component are intended to be exempt from the application of Section 409A of the Code under U.S. Treasury Regulation Section 1.409A-1(b)(5)(ii).  Purchase Rights granted under the Non-423 Component to U.S. taxpayers are intended to be exempt from the application of Section 409A of the Code under the short-term deferral exception and any ambiguities will be construed and interpreted in accordance with such intent.  Subject to Section 13(b) below, Purchase Rights granted to U.S. taxpayers under the Non-423 Component will be subject to such terms and conditions that will permit such Purchase Rights to satisfy the requirements of the short-term deferral exception available under Section 409A of the Code, including the requirement that the shares subject to a Purchase Right be delivered within the short-term deferral period.  Subject to Section 13(b) below, in the case of a Participant who would otherwise be subject to Section 409A of the Code, to the extent the Board determines that a Purchase Right or the exercise, payment, settlement or deferral thereof is subject to Section 409A of the Code, the Purchase Right will be granted, exercised, paid, settled or deferred in a manner that will comply with Section 409A of the Code, including U.S. Department of Treasury regulations and other interpretive guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the adoption of the Plan.  Notwithstanding the foregoing, the Company will have no liability to a Participant or any other party if the Purchase Right that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant or for any action taken by the Board with respect thereto.

 

(b)                                 Although the Company may endeavor to (i) qualify a Purchase Right for special tax treatment under the laws of the United States or jurisdictions outside of the United States or (ii) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain special or to avoid unfavorable tax treatment, notwithstanding anything to the contrary in this Plan, including Section 13(a) above.  The Company will be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants under the Plan.

 

14.                               TAX WITHHOLDING

 

The Participant will make adequate provision to satisfy the Tax-Related Items withholding obligations, if any, of the Company and/or the applicable Designated Company which arise with respect to Participant’s participation in the Plan or upon the disposition of the Common Shares.  The Company and/or the Designated Company may, but will not be obligated to, withhold from the Participant’s compensation or any other payments due the Participant the amount necessary to meet such withholding obligations or withhold from the proceeds of the sale of Common Shares or any other method of withholding that the Company and/or the Designated Company deems appropriate. The Company and/or the Designated Company will have the right to take such other action as may be necessary in the opinion of the Company or a Designated Company to satisfy withholding and/or reporting obligations for such Tax-Related Items.

 

15.                               EFFECTIVE DATE OF PLAN.

 

The Plan will become effective immediately prior to and contingent upon the IPO Date.  No Purchase Rights will be exercised unless and until the Plan has been approved by the shareholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.

 

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16.                               MISCELLANEOUS PROVISIONS.

 

(a)                                 Proceeds from the sale of Common Shares pursuant to Purchase Rights will constitute general funds of the Company.

 

(b)                                 A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, Common Shares subject to Purchase Rights unless and until the Participant’s Common Shares acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).

 

(c)                                  The Plan and Offering do not constitute an employment contract.  Nothing in the Plan or in the Offering will in any way alter the at-will nature of a Participant’s employment, if applicable, or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company, a Related Corporation, or an Affiliate, or on the part of the Company, a Related Corporation or an Affiliate to continue the employment of a Participant.

 

(d)                                 The provisions of the Plan will be governed by the laws of the State of Delaware without resort to that state’s conflicts of laws rules.

 

(e)                                  If any particular provision of the Plan is found to be invalid or otherwise unenforceable, such provision will not affect the other provisions of the Plan, but the Plan will be construed in all respects as if such invalid provision were omitted.

 

(f)                                   The Company’s insider trading policy as in effect from time to time may be applicable to an Employee’s rights under the Plan.  Notwithstanding any Plan provision to the contrary, no Employee shall, while in possession of material undisclosed information, elect to enroll or elect to increase, decrease or cease Contributions.  The Board may require an Employee to acknowledge that such election is being made in compliance with the Company’s insider trading policy.

 

(g)                                 If any provision of the Plan does not comply with applicable law or regulations, such provision shall be construed in such a manner as to comply with applicable law or regulations.

 

17.                               DEFINITIONS.

 

As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

 

(a)                                 “423 Component” means the part of the Plan, which excludes the Non-423 Component, pursuant to which Purchase Rights that satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.

 

(b)                                 “Affiliate” means any entity, other than a Related Corporation, in which the Company has an equity or other ownership interest or that is directly or indirectly controlled by, controls, or is under common control with the Company, in all cases, as determined by the Board, whether now or hereafter existing.

 

(c)                                  “Board” means the board of directors of the Company.

 

(d)                                 “Capital Shares” means each and every class of common shares of the Company, regardless of the number of votes per share.

 

10

 

(e)                                  “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Shares subject to the Plan or subject to any Purchase Right after the Effective Date without the receipt of consideration by the Company through merger, amalgamation, arrangement, consolidation, reorganization, recapitalization, reincorporation, share dividend, dividend in property other than cash, large nonrecurring cash dividend, share split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto).  Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

 

(f)                                   “Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

 

(g)                                 “Committee” means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).

 

(h)                                 “Common Share” means, as of the IPO Date, a common share in the share capital of the Company.

 

(i)                                    “Company” means Milestone Pharmaceuticals Inc. and any successor corporation thereto.

 

(j)                                    “Contributions” means the payroll deductions and/or other payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already contributed the maximum permitted amount of payroll deductions and/or other payments during the Offering.

 

(k)                                 “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)                                    a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

 

(ii)                                a sale or other disposition of more than 50% of the outstanding securities of the Company;

 

(iii)                            a merger, amalgamation, arrangement, consolidation or similar transaction following which the Company is not the surviving corporation; or

 

(iv)                             a merger, amalgamation, arrangement, consolidation or similar transaction following which the Company is the surviving corporation but the Common Shares outstanding immediately preceding the merger, amalgamation, arrangement, consolidation or similar transaction are converted or exchanged by virtue of the merger, amalgamation, arrangement, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

 

(l)                                    “Designated 423 Corporation” means any Related Corporation selected by the Board as participating in the 423 Component.

 

(m)                             “Designated Company” means any Designated Non-423 Corporation or Designated 423 Corporation, provided, however, that at any given time, a Related Corporation participating in the 423 Component shall not be a Related Corporation participating in the Non-423 Component.

 

11

 

(n)                                 “Designated Non-423 Corporation” means any Related Corporation or Affiliate selected by the Board as participating in the Non-423 Component.

 

(o)                                 “Director” means a member of the Board.

 

(p)                                 “Effective Date” means the effective date of the Plan, as set forth in Section 15.

 

(q)                                 “Eligible Employee” means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.

 

(r)                                  “Employee” means any person, including an Officer or Director, who is “employed” for purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation (including an Affiliate).  However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

 

(s)                                   “Employee Stock Purchase Plan” means a plan that grants Purchase Rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code.

 

(t)                                    “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.

 

(u)                                 “Fair Market Value” means, as of any date, the value of a Common Share determined as follows:

 

(i)                                    If the Common Shares are listed on any established stock exchange or traded on any established market, the Fair Market Value of a Common Share will be, unless otherwise determined by the Board, the closing sales price for such shares as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Shares) on the date of determination, as reported in such source as the Board deems reliable.  Unless otherwise provided by the Board, if there is no closing sales price for the Common Shares on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists.

 

(ii)                                In the absence of such markets for the Common Shares, the Fair Market Value will be determined by the Board in good faith in compliance with applicable laws and regulations and in a manner that complies with Sections 409A of the Code.

 

(iii)                            Notwithstanding the foregoing, for any Offering that commences on the IPO Date, the Fair Market Value of the Common Shares on the Offering Date will be the price per share at which shares are first sold to the public in the Company’s initial public offering as specified in the final prospectus for that initial public offering.

 

(v)                                 “IPO Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Common Shares, pursuant to which the Common Shares are priced for the initial public offering.

 

(w)                               “Non-423 Component” means the part of the Plan, which excludes the 423 Component, pursuant to which Purchase Rights that are not intended to satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.

 

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(x)                                 “Offering” means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the “Offering Document” approved by the Board for that Offering.

 

(y)                                 “Offering Date” means a date selected by the Board for an Offering to commence.

 

(z)                                  “Officer” means a person who is an officer of the Company or a Related Corporation or Affiliate within the meaning of Section 16 of the Exchange Act.

 

(aa)                          “Participant” means an Eligible Employee who holds an outstanding Purchase Right.

 

(bb)                          “Plan” means this Milestone Pharmaceuticals Inc. 2019 Employee Share Purchase Plan, including both the 423 Component and the Non-423 Component, as amended from time to time.

 

(cc)                            “Purchase Date” means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of Common Shares will be carried out in accordance with such Offering.

 

(dd)                          “Purchase Period” means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date, and ending on a Purchase Date.  An Offering may consist of one or more Purchase Periods.

 

(ee)                            “Purchase Right” means an option to purchase Common Shares granted pursuant to the Plan.

 

(ff)                              “Related Corporation” means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

 

(gg)                          “Securities Act” means the U.S. Securities Act of 1933, as amended.

 

(hh)                          “Tax-Related Items” means any income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items arising in relation to a Participant’s participation in the Plan.

 

(ii)                                “Trading Day” means any day on which the exchange(s) or market(s) on which Common Shares are listed, including but not limited to the NYSE, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.

 

13Exhibit 10.5

 

 

INDEMNIFICATION AGREEMENT

 

by and between

 

GREENLANE HOLDINGS, INC.

 

And

 

[ ]

 

as Indemnitee

 

Dated as of , 2019

  

     

     

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE 1	DEFINITIONS	2
	 	 	 
	ARTICLE 2	INDEMNITY IN THIRD-PARTY PROCEEDINGS	6
	 	 	 
	ARTICLE 3	INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY	6
	 	 	 
	ARTICLE 4	INDEMNIFICATION FOR EXPENSES OF A PARTYWHO IS WHOLLY OR PARTLY SUCCESSFUL	7
	 	 	 
	ARTICLE 5	INDEMNIFICATION FOR EXPENSES OF A WITNESS	7
	 	 	 
	ARTICLE 6	ADDITIONAL INDEMNIFICATION, HOLD HARMLESS AND EXONERATION RIGHTS	7
	 	 	 
	ARTICLE 7	CONTRIBUTION IN THE EVENT OF JOINT LIABILITY	8
	 	 	 
	ARTICLE 8	EXCLUSIONS	8
	 	 	 
	ARTICLE 9	ADVANCES OF EXPENSES; SELECTION OF LAW FIRM	9
	 	 	 
	ARTICLE 10	PROCEDURE FOR NOTIFICATION; DEFENSE OF CLAIM; SETTLEMENT	10
	 	 	 
	ARTICLE 11	PROCEDURE UPON APPLICATION FOR INDEMNIFICATION	11
	 	 	 
	ARTICLE 12	PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS	12
	 	 	 
	ARTICLE 13	REMEDIES OF INDEMNITEE	14
	 	 	 
	ARTICLE 14	SECURITY	15
	 	 	 
	ARTICLE 15	NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; PRIMACY OF INDEMNIFICATION; SUBROGATION	16
	 	 	 
	ARTICLE 16	ENFORCEMENT AND BINDING EFFECT	17
	 	 	 
	ARTICLE 17	MISCELLANEOUS	18

  

     i

     

    

  

INDEMNIFICATION AGREEMENT

 

INDEMNIFICATION AGREEMENT,
dated effective as of [ ], 2019 (this “Agreement”), by and between Greenlane Holdings, Inc., a Delaware corporation
(the “Company”), and [ ] (“Indemnitee”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in Article 1. See Schedule A for a list of officers and directors who
have entered into this Indemnification Agreement with the Company.

 

WHEREAS, the Company
desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company;

 

WHEREAS, in order to
induce Indemnitee to provide or continue to provide services to the Company, the Company wishes to provide for the indemnification
of, and advancement of expenses to, Indemnitee to the fullest extent permitted by law;

 

WHEREAS, the Company
and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the availability and scope of coverage of liability insurance
provide increasing challenges for the Company;

 

WHEREAS, the Company’s
Amended and Restated Certificate of Incorporation (as the same may be amended and/or restated from time to time, the “Certificate
of Incorporation”) requires indemnification of the officers and directors of the Company, and Indemnitee may also be
entitled to indemnification pursuant to applicable provisions of the Delaware General Corporation Law (“DGCL”);

 

WHEREAS, the Certificate
of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby
contemplate that contracts providing for indemnification may be entered into between the Company and members of the board of directors
of the Company (the “Board”), executive officers and other key employees of the Company;

 

WHEREAS, this Agreement
is a supplement to and in furtherance of the Certificate of Incorporation and any resolutions adopted pursuant thereto and shall
not be deemed a substitute therefor nor to diminish or abrogate any rights of Indemnitee thereunder (regardless of, among other
things, any amendment to or revocation of governing documents or any change in the composition of the Board or any Corporate Transaction);
and

 

WHEREAS, Indemnitee
will serve or continue to serve as a director, officer or key employee of the Company for so long as Indemnitee is duly elected
or appointed or until Indemnitee tenders his or her resignation or is otherwise terminated by the Company.

 

     

     

    

 

NOW, THEREFORE, in
consideration of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

ARTICLE 1

DEFINITIONS

 

As used in this Agreement:

 

		1.1.	“Affiliate” shall have the meaning set forth in Rule 405 under the Securities
Act of 1933, as amended (as in effect on the date hereof).

 

		1.2.	“Agreement” shall have the meaning set forth in the preamble.

 

		1.3.	“Beneficial Owner” and “Beneficial Ownership” shall have
the meaning set forth in Rule 13d-3 under the

 

		1.4.	Exchange Act (as in effect on the date hereof).

 

		1.5.	“Board” shall have the meaning set forth in the recitals.

 

		1.6.	“Bylaws” shall mean the Company’s Bylaws (as the same may be amended and/or
restated from time to time).

 

		1.7.	“Certificate of Incorporation” shall have the meaning set forth in the recitals.

 

		1.8.	“Change in Control” shall mean, and shall be deemed to occur upon the earliest
to occur after the date of this Agreement of any of the following events:

 

(a) Acquisition of
Stock by Third Party. Any Person other than a Permitted Holder is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding Voting
Securities, unless (i) the change in the relative Beneficial Ownership of the Company’s securities by any Person results
solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election
of directors or (ii) such acquisition was approved in advance by the Continuing Directors and such acquisition would not constitute
a Change in Control under part (c) of this definition;

 

(b) Change in Board
of Directors. Individuals who, as of the date hereof, constitute the Board, and any new director whose appointment or election
by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a
majority of the directors then still in office who were directors on the date hereof or whose appointment, election or nomination
for election was previously so approved or recommended by the directors referred to in this clause (b) (collectively, the “Continuing
Directors”), cease for any reason to constitute at least a majority of the members of the Board;

 

(c) Corporate Transactions.
The effective date of a reorganization, merger or consolidation of the Company (in each case, a “Corporate Transaction”),
unless following such Corporate Transaction: (i) all or substantially all of the individuals and entities who were the Beneficial
Owners of Voting Securities of the Company immediately prior to such Corporate Transaction beneficially own, directly or indirectly,
more than 50% of the combined voting power of the then outstanding Voting Securities of the Company or other Person resulting from
such Corporate Transaction (including, without limitation, a corporation or other Person that as a result of such transaction owns
the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries) in substantially
the same proportions as their ownership of Voting Securities immediately prior to such Corporate Transaction; (ii) no Person (excluding
any corporation resulting from such Corporate Transaction or the Permitted Holders) is the Beneficial Owner, directly or indirectly,
of 50% or more of the combined voting power of the then outstanding Voting Securities of the Company or other Person resulting
from such Corporate Transaction, except to the extent that such ownership existed prior to such Corporate Transaction; and (iii)
at least a majority of the board of directors of the Company or other Person resulting from such Corporate Transaction were Continuing
Directors at the time of the execution of the initial agreement, or of the action of the Board, providing for such Corporate Transaction;
or

 

    2 

     

    

 

(d) Other Events.
The approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company or the consummation
of an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Company of all
or substantially all of the Company’s assets, other than such sale or other disposition by the Company of all or substantially
all of the Company’s assets to a Person, at least 50% of the combined voting power of the Voting Securities of which are
Beneficially Owned by (i) the stockholders of the Company immediately prior to such sale or (ii) the Permitted Holders.

 

1.8. “Company”
shall have the meaning set forth in the preamble and shall also include, in addition to the resulting corporation or other entity,
any constituent corporation (including, without limitation, any constituent of a constituent) absorbed in a consolidation or merger
that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees
or agents, so that if Indemnitee is or was a director, officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving corporation or other entity as Indemnitee would have with respect to such constituent corporation
if its separate existence had continued.

 

		1.9.	“Continuing Directors” shall have the meaning set forth in Section 1.7(b).

 

1.10. “Corporate
Status” shall describe the status as such of a Person who is or was a director, officer, trustee, general partner, managing
member, fiduciary, employee or agent of the Company or of any other Enterprise which such Person is or was serving at the request
of the Company.

 

1.11. “Corporate
Transaction” shall have the meaning set forth in Section 1.7(c).

 

1.12. “Delaware
Court” shall mean the Court of Chancery of the State of Delaware.

 

1.13. “DGCL”
shall have the meaning set forth in the recitals.

 

1.14. “Disinterested
Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

 

    3 

     

    

 

1.15. “Enterprise”
shall mean the Company and any other corporation, constituent corporation (including, without limitation, any constituent of a
constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned Subsidiaries) is a party, limited
liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving
at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent.

 

1.16. “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

1.17. “Expenses”
shall include all reasonable and documented attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all
other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute
or defend, investigating, being or preparing to be a witness in, settling or negotiating for the settlement of, responding to or
objecting to a request to provide discovery in, or otherwise participating in, any Proceeding. Expenses also shall include Expenses
incurred in connection with any appeal resulting from any Proceeding, including, without limitation, the premium, security for,
and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent and any federal, state, local
or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments, fines or penalties against Indemnitee.

 

1.18. “Indemnification
Arrangements” shall have the meaning set forth in Section 15.2.

 

1.19. “Indemnitee”
shall have the meaning set forth in the preamble.

 

1.20. “Independent
Counsel” shall mean a law firm, or a member of a law firm, that is of outstanding reputation, experienced in matters
of corporation law and neither is as of the date of selection of such firm, nor has been during the period of three years immediately
preceding the date of selection of such firm, retained to represent: (a) the Company or Indemnitee in any material matter (other
than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification
agreements); or (b) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel
referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out
of or relating to this Agreement or its engagement pursuant hereto. For purposes of this definition, a “material matter”
shall mean any matter for which billings exceeded or are expected to exceed $100,000.

 

1.21. “Permitted
Holder” shall mean Aaron LoCascio, Adam Schoenfeld, Jacoby & Co. Inc. and their respective Affiliates and Related
Parties.

 

    4 

     

    

 

1.22. “Person”
shall have the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act (as in effect on the date hereof); provided,
however, that the term “Person” shall exclude: (a) the Company; (b) any Subsidiaries of the Company; and (c)
any employee benefit plan of the Company or a Subsidiary of the Company or any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or of a Subsidiary of the Company or of a corporation or other entity owned, directly
or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

1.23. “Proceeding”
shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, including, without limitation,
any and all appeals, whether brought by or in the right of the Company or otherwise and whether of a civil (including, without
limitation, intentional or unintentional tort claims), criminal, administrative or investigative nature, whether formal or informal,
in which Indemnitee was, is, will or might be involved as a party or otherwise by reason of the fact that Indemnitee is or was
a director or officer of the Company, by reason of any action taken by or omission by Indemnitee, or of any action or omission
on Indemnitee’s part while acting as a director or officer of the Company, or by reason of the fact that Indemnitee is or
was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee
or agent of any other Enterprise; in each case whether or not acting or serving in such capacity at the time any liability or expense
is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement or Section
145 of the DGCL; including one pending on or before the date of this Agreement but excluding one initiated by Indemnitee to enforce
Indemnitee’s rights under this Agreement or Section 145 of the DGCL.

 

1.24. “Related
Party” shall mean, with respect to any Person, (a) any controlling stockholder, controlling member, general partner,
Subsidiary, spouse or immediate family member (in the case of an individual) of such Person, (b) any estate, trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners or owners of which consist solely of one or more Permitted
Holders and/or such other Persons referred to in the immediately preceding clause (a), or (c) any executor, administrator, trustee,
manager, director or other similar fiduciary of any Person referred to in the immediately preceding clause (b), acting solely in
such capacity.

 

1.25. “Section
409A” shall have the meaning set forth in Section 17.2.

 

1.26. “Subsidiary”
with respect to any Person, shall mean any corporation or other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that Person.

 

1.27. “Voting
Securities” shall mean any securities of the Company (or a surviving entity as described in the definition of a “Change
in Control”) that vote generally in the election of directors (or similar body).

 

1.28. References to
“fines” shall include any excise tax or penalty assessed on Indemnitee with respect to any employee benefit
plan; references to “other enterprise” shall include employee benefit plans; references to “serving
at the request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to
an employee benefit plan, its participants or beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in the best interests of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed
to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

    5 

     

    

 

1.29. The phrase “to the
fullest extent not prohibited by (and not merely to the extent affirmatively permitted by) applicable law” shall include,
but not be limited to: (a) to the fullest extent authorized or permitted by the provision of the DGCL that authorizes or contemplates
additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL and (b)
to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

ARTICLE 2

INDEMNITY IN THIRD-PARTY PROCEEDINGS

 

Subject to Article
8 and Article 11, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions
of this Article 2 if Indemnitee is, was or is threatened to be made a party to or a participant (as a witness or otherwise)
in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Subject to Article
8 and Article 11, to the fullest extent not prohibited by (and not merely to the extent affirmatively permitted by)
applicable law, Indemnitee shall be indemnified against all Expenses, judgments, fines, penalties and, subject to Section 10.3,
amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause
to believe that such conduct was unlawful.

 

ARTICLE 3

INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY

 

Subject to Article
8 and Article 11, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions
of this Article 3 if Indemnitee is, was or is threatened to be made a party to or a participant in any Proceeding by or
in the right of the Company to procure a judgment in its favor. Subject to Article 8 and Article 11, to the fullest
extent not prohibited by (and not merely to the extent affirmatively permitted by) applicable law, Indemnitee shall be indemnified,
held harmless and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made
under this Article 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged (and
not subject to further appeal) by a court of competent jurisdiction to be liable to the Company, except to the extent that the
Delaware Court or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

  

    6 

     

    

 

ARTICLE 4

INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS

WHOLLY OR PARTLY SUCCESSFUL

 

Notwithstanding any
other provisions of this Agreement, to the extent that Indemnitee is a party to (or a participant in) and is successful, on the
merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall
indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith. For the avoidance of doubt, if Indemnitee is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, then the Company
shall indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or
on Indemnitee’s behalf in connection with each resolved claim, issue or matter, whether or not Indemnitee was wholly or partly
successful; provided that Indemnitee shall only be entitled to indemnification for Expenses with respect to unsuccessful
claims under this Article 4 to the extent Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause
to believe that such conduct was unlawful. For purposes of this Article 4 and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, or by settlement, shall be deemed to be a
successful result as to such claim, issue or matter.

 

ARTICLE 5

INDEMNIFICATION FOR EXPENSES OF A WITNESS

 

Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness
in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified, held harmless and exonerated against all
Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

ARTICLE 6

ADDITIONAL INDEMNIFICATION, HOLD

HARMLESS AND EXONERATION RIGHTS

 

In addition to and
notwithstanding any limitations in Articles 2, 3 or 4, but subject to Article 8 and Article 11,
the Company shall indemnify, hold harmless and exonerate Indemnitee to the fullest extent not prohibited by (and not merely to
the extent affirmatively permitted by) law if Indemnitee is, was or is threatened to be made a party to or a participant in, any
Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses,
judgments, fines, penalties and, subject to Section 10.3, penalties and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties and
amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with the
Proceeding. No indemnity shall be available under this Article 6 on account of Indemnitee’s conduct that constitutes
a breach of Indemnitee’s duty of loyalty to the Company or its stockholders or is an act or omission not in good faith or
that involves intentional misconduct or a knowing violation of the law.

  

    7 

     

    

 

ARTICLE 7

CONTRIBUTION IN THE EVENT OF JOINT LIABILITY

 

7.1. To the fullest
extent not prohibited by (and not merely to the extent affirmatively permitted by) law, if the indemnification rights provided
for in this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for judgments, liabilities, fines,
penalties, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding without requiring Indemnitee
to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time
against Indemnitee.

 

7.2. The Company shall
not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in
such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

7.3. The Company hereby
agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may be brought by officers,
directors or employees of the Company (other than Indemnitee) who may be jointly liable with Indemnitee.

 

ARTICLE 8

EXCLUSIONS

 

8.1. Notwithstanding
any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity, contribution or
advancement of Expenses in connection with any claim made against Indemnitee:

 

(a) for an accounting
of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act (or any similar successor statute) or similar provisions of state statutory law or common
law; or

 

(b) in connection with
any Proceeding (or any part of any Proceeding) initiated or brought voluntarily by Indemnitee, including, without limitation, any
Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or
other indemnitees, other than a Proceeding initiated by Indemnitee to enforce its rights under this Agreement, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) or (ii) the Company provides the indemnification payment, in its sole
discretion, pursuant to the powers vested in the Company under applicable law; or

 

    8 

     

    

 

(c) for the payment of amounts required to
be reimbursed to the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002, as amended, or any similar successor statute;
or

 

(d) for any payment to
Indemnitee that is determined to be unlawful by a final judgment or other adjudication of a court or arbitration, arbitral or administrative
body of competent jurisdiction as to which there is no further right or option of appeal or the time within which an appeal must
be filed has expired without such filing and under the procedures and subject to the presumptions of this Agreement; or

 

(e) in connection with
any Proceeding initiated by Indemnitee to enforce its rights under this Agreement if a court of competent jurisdiction determines
by final judicial decision that each of the material assertions made by Indemnitee in such Proceeding was not made in good faith
or was frivolous.

 

The exclusion in Section
8.1(c) shall not apply to counterclaims or affirmative defenses asserted by Indemnitee in an action brought against Indemnitee.

 

ARTICLE 9

ADVANCES OF EXPENSES; SELECTION OF LAW FIRM

 

9.1. Subject to Article
8 and Article 11, the Company shall, unless prohibited by applicable law, advance the Expenses incurred by or on behalf
of Indemnitee in connection with any Proceeding within ten business days after the receipt by the Company of a statement or statements
requesting such advances, together with a reasonably detailed written explanation of the basis therefor and an itemization of legal
fees and disbursements in reasonable detail, from time to time, whether prior to or after final disposition of any Proceeding.
Advances shall be unsecured and interest free. Indemnitee shall qualify for advances, to the fullest extent permitted by this Agreement,
solely upon the execution and delivery to the Company of an undertaking providing that Indemnitee undertakes to repay the advance
to the extent that it is ultimately determined, by final judicial decision of a court of competent jurisdiction from which there
is no further right to appeal, that Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement
or pursuant to applicable law. This Section 9.1 shall not apply to any claim made by Indemnitee for which an indemnification
payment is excluded pursuant to Article 8.

 

    9 

     

    

 

9.2. If the Company shall be obligated
under Section 9.1 hereof to pay the Expenses of any Proceeding against Indemnitee, then the Company shall be entitled to
assume the defense of such Proceeding upon the delivery to Indemnitee of written notice of its election to do so. If the Company
elects to assume the defense of such Proceeding, then unless the plaintiff or plaintiffs in such Proceeding include one or more
Persons holding, together with his, her or its Affiliates, in the aggregate, a majority of the combined voting power of the Company’s
then outstanding Voting Securities, the Company shall assume such defense using a single law firm (in addition to local counsel)
selected by the Company representing Indemnitee and other present and former directors or officers of the Company. The retention
of such law firm by the Company shall be subject to prior written approval by Indemnitee, which approval shall not be unreasonably
withheld, delayed or conditioned. If the Company elects to assume the defense of such Proceeding and the plaintiff or plaintiffs
in such Proceeding include one or more Persons holding, together with his, her or its Affiliates, in the aggregate, a majority
of the combined voting power of the Company’s then outstanding Voting Securities, then the Company shall assume such defense
using a single law firm (in addition to local counsel) selected by Indemnitee and any other present or former directors or officers
of the Company who are parties to such Proceeding. After (x) in the case of retention of any such law firm selected by the Company,
delivery of the required notice to Indemnitee, approval of such law firm by Indemnitee and the retention of such law firm by the
Company, or (y) in the case of retention of any such law firm selected by Indemnitee, the completion of such retention, the Company
will not be liable to Indemnitee under this Agreement for any Expenses of any other law firm incurred by Indemnitee after the
date that such first law firm is retained by the Company with respect to the same Proceeding; provided, that in the case of retention
of any such law firm selected by the Company (a) Indemnitee shall have the right to retain a separate law firm in any such Proceeding
at Indemnitee’s sole expense; and (b) if (i) the retention of a law firm by Indemnitee has been previously authorized by
the Company in writing, (ii) Indemnitee shall have reasonably concluded that (1) there may be a conflict of interest between either
(x) the Company and Indemnitee or (y) Indemnitee and another present or former director or officer of the Company also represented
by such law firm in the conduct of any such defense, or (2) there may be defenses available to Indemnitee that are incompatible
or inconsistent with those available to the Company or another present or former director represented by such law firm in the
conduct of such defense, or (iii) the Company shall not, in fact, have retained a law firm to prosecute the defense of such Proceeding
within thirty days, then the reasonable Expenses of a single law firm retained by Indemnitee shall be at the expense of the Company.
Notwithstanding anything else to the contrary in this Section 9.2, the Company will not be entitled without the written consent
of the Indemnitee to assume the defense of any Proceeding brought by or in the right of the Company.

 

ARTICLE 10

PROCEDURE FOR NOTIFICATION; DEFENSE OF CLAIM; SETTLEMENT

 

10.1. Indemnitee shall,
as a condition precedent to Indemnitee’s right to be indemnified under this Agreement, give the Company notice in writing
promptly of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement; provided,
however, that a delay in giving such notice shall not deprive Indemnitee of any right to be indemnified under this Agreement
unless, and then only to the extent that, such delay is materially prejudicial to the defense of such claim. The omission or delay
to notify the Company will not relieve the Company from any liability for indemnification which it may have to Indemnitee otherwise
than under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise
the Board in writing that Indemnitee has requested indemnification.

 

    10 

     

    

 

10.2. The Company will
be entitled to participate in the Proceeding at its own expense.

 

10.3. The Company shall
have no obligation to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any claim effected without
the Company’s prior written consent, provided the Company has not breached its obligations hereunder. The Company shall not
settle any claim, including, without limitation, any claim in which it takes the position that Indemnitee is not entitled to indemnification
in connection with such settlement, nor shall the Company settle any claim which would impose any fine or obligation on Indemnitee
or attribute to Indemnitee any admission of liability, without Indemnitee’s prior written consent. Neither the Company nor
Indemnitee shall unreasonably withhold, delay or condition their consent to any proposed settlement.

 

ARTICLE 11

 

PROCEDURE UPON APPLICATION FOR INDEMNIFICATION

 

11.1. Upon written
request by Indemnitee for indemnification pursuant to the first sentence of Section 10.1, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (a) if a Change in Control
shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee;
or (b) if a Change in Control shall not have occurred, (i) by a majority vote of the Disinterested Directors (provided there is
a minimum of three Disinterested Directors), even though less than a quorum of the Board, (ii) by a committee of Disinterested
Directors designated by a majority vote of the Disinterested Directors (provided there is a minimum of three Disinterested Directors),
even though less than a quorum of the Board, or (iii) if there are less than three Disinterested Directors or, if such Disinterested
Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee,
and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten business
days after such determination and any future amounts due to Indemnitee shall be paid in accordance with this Agreement. Indemnitee
shall cooperate with the Person making such determination with respect to Indemnitee’s entitlement to indemnification, including,
without limitation, providing to such Person upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination,
provided, that nothing contained in this Agreement shall require Indemnitee to waive any privilege Indemnitee may have.
Any costs or expenses (including, without limitation, reasonable attorneys’ fees and disbursements) incurred by Indemnitee
in so cooperating with the Person making such determination shall be borne by the Company (irrespective of the determination as
to Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.

 

    11 

     

    

 

11.2. If the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11.1 hereof, the Independent
Counsel shall be selected as provided in this Section 11.2. If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity
of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected.
In either event, Indemnitee or the Company, as the case may be, may, within ten business days after such written notice of selection
shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in Article 1 of this Agreement, and the objection shall set
forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall
act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not
serve as Independent Counsel unless and until such objection is withdrawn or a court or arbitrator has determined that such objection
is without merit. If, within twenty days after submission by Indemnitee of a written request for indemnification pursuant to Section
10.1 hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may seek
arbitration for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection
of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the arbitrator or by such other
Person as the arbitrator shall designate, and the Person with respect to whom all objections are so resolved or the Person so appointed
shall act as Independent Counsel under Section 11.1 hereof. Such arbitration referred to in the previous sentence shall
be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association, and Article
13 hereof shall apply in respect of such arbitration and the Company and Indemnitee. Upon the due commencement of any judicial
proceeding pursuant to Section 13.1 of this Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

ARTICLE 12

PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS

 

12.1. In making a determination
with respect to entitlement to indemnification hereunder, the Person making such determination shall presume that Indemnitee is
entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section
10.1 of this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion
by clear and convincing evidence. Neither the failure of the Company (including by its Board, its Independent Counsel and its stockholders)
to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification or advancement
of expenses is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination
by the Company (including by its Board, its Independent Counsel and its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard
of conduct.

 

    12 

     

    

 

12.2. If the Person
empowered or selected under Article 11 of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within thirty days after receipt by the Company of the request therefor, the requisite determination
of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent
(a) an intentional misstatement by Indemnitee of a material fact, or an intentional omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (b) a final judicial
determination that any or all such indemnification is expressly prohibited under applicable law; provided, however,
that such thirty-day period may be extended for a reasonable time, not to exceed an additional fifteen days, if the Person making
the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining
or evaluating of documentation and/or information relating thereto.

 

12.3. The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or without court approval), conviction,
or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement)
of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with
respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

12.4. For purposes
of any determination of good faith pursuant to this Agreement, Indemnitee shall be deemed to have acted in good faith if, among
other things, Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements,
or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the
advice of legal counsel for the Enterprise, its board of directors, any committee of the board of directors or any director, or
on information or records given or reports made to the Enterprise, its board of directors, any committee of the board of directors
or any director, by an independent certified public accountant or by an appraiser or other expert selected with reasonable care
by the Enterprise, its board of directors, any committee of the board of directors or any director. The provisions of this Section
12.4 shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this Agreement. In any event, it shall be presumed that Indemnitee
has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear
and convincing evidence.

 

12.5. The knowledge
and/or actions, or failure to act, of any other director, officer, trustee, partner, managing member, fiduciary, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

12.6. The Company acknowledges
that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved
in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim
or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful
on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden
of proof and the burden of persuasion by clear and convincing evidence.

 

    13 

     

    

 

ARTICLE 13

REMEDIES OF INDEMNITEE

 

13.1. In the event
that (a) a determination is made pursuant to Article 11 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (b) advancement of Expenses, to the fullest extent permitted by applicable law, is not timely made pursuant
to Article 9 of this Agreement, (c) no determination of entitlement to indemnification shall have been made pursuant to
Section 11.1 of this Agreement within thirty days after receipt by the Company of the request for indemnification and of reasonable
documentation and information which Indemnitee may be called upon to provide pursuant to Section 11.1, (d) payment of indemnification
is not made pursuant to Articles 4, 5, 6 or the last sentence of Section 11.1 of this Agreement within
ten business days after receipt by the Company of a written request therefor, (e) a contribution payment is not made in a timely
manner pursuant to Article 7 of this Agreement, (f) payment of indemnification pursuant to Article 3 or 6
of this Agreement is not made within ten business days after a determination has been made that Indemnitee is entitled to indemnification
or (g) the Company or any representative thereof takes or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any Proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided
to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of competent jurisdiction of Indemnitee’s
entitlement to such indemnification, contribution or advancement of Expenses. Alternatively, Indemnitee, at his or her option,
may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Except as set forth herein, the provisions of Delaware law (without regard to its conflict of laws rules)
shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award
in arbitration. The award rendered by such arbitration will be final and binding upon the parties hereto, and final judgment on
the arbitration award may be entered in any court of competent jurisdiction.

 

13.2. In the event
that a determination shall have been made pursuant to Section 11.1 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to this Article 13 shall be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.
In any judicial proceeding or arbitration commenced pursuant to this Article 13, Indemnitee shall be presumed to be entitled
to receive advances of Expenses under this Agreement and the Company shall have the burden of proving Indemnitee is not entitled
to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence
any determination pursuant to Section 11.1 of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences
a judicial proceeding or arbitration pursuant to this Article 13, Indemnitee shall not be required to reimburse the Company
for any advances pursuant to Article 9 until a final determination is made with respect to Indemnitee’s entitlement
to indemnification (as to which all rights of appeal shall have been exhausted or lapsed).

 

    14 

     

    

 

13.3. If a determination
shall have been made pursuant to Section 11.1 of this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Article 13, absent
(a) an intentional misstatement by Indemnitee of a material fact or an intentional omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (b) a prohibition
of such indemnification under applicable law.

 

13.4. The Company shall
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Article 13 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.

 

13.5. The Company shall
indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee,
shall (within ten days after the Company’s receipt of such written request) pay to Indemnitee, to the fullest extent permitted
by applicable law, such Expenses which are incurred by Indemnitee in connection with any judicial proceeding or arbitration brought
by Indemnitee (a) to enforce his or her rights under, or to recover damages for breach of, this Agreement or any other indemnification,
advancement or contribution agreement or provision of the Certificate of Incorporation, or the Bylaws now or hereafter in effect;
or (b) for recovery or advances under any insurance policy maintained by any Person for the benefit of Indemnitee, regardless of
the outcome and whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement, contribution or
insurance recovery, as the case may be (unless such judicial proceeding or arbitration was not brought by Indemnitee in good faith).

 

13.6. Interest shall
be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies, or is obliged
to indemnify, for the period commencing with the date on which Indemnitee requests indemnification, contribution, reimbursement
or advancement of any Expenses and ending with the date on which such payment is made to Indemnitee by the Company.

 

ARTICLE 14

SECURITY

 

Notwithstanding anything
herein to the contrary, to the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time
to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit,
funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior
written consent of Indemnitee.

 

    15 

     

    

 

ARTICLE 15

NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; PRIMACY OF

INDEMNIFICATION; SUBROGATION

 

15.1. The rights of
Indemnitee as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution
of directors, or otherwise. To the extent that a change in applicable law, whether by statute or judicial decision, permits greater
indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, the Bylaws
or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.

 

15.2. The DGCL and
the Certificate of Incorporation permit the Company to purchase and maintain insurance or furnish similar protection or make other
arrangements, including, but not limited to, providing a trust fund, letter of credit or surety bond (“Indemnification
Arrangements”) on behalf of Indemnitee against any liability asserted against Indemnitee or incurred by or on behalf
of Indemnitee or in such capacity as a director, officer, employee or agent of the Company, or arising out of his or her status
as such, whether or not the Company would have the power to indemnify Indemnitee against such liability under the provisions of
this Agreement or under the DGCL, as it may then be in effect. The purchase, establishment and maintenance of any such Indemnification
Arrangement shall not in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement
except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in
any way limit or affect the rights and obligations of the Company or the other party or parties thereto under any such Indemnification
Arrangement.

 

15.3. To the extent
that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees, partners,
managing members, fiduciaries, employees or agents of the Company or of any other Enterprise which such Person serves at the request
of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for any such director, officer, trustee, partner, managing member, fiduciary, employee or agent under
such policy or policies. If, at the time the Company receives notice from any source of a Proceeding as to which Indemnitee is
a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company
shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on
behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

    16 

     

    

 

15.4. In the event
of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery
of Indemnitee, who shall execute all papers reasonably required and take all action reasonably necessary to secure such rights,
including, without limitation, execution of such documents as are necessary to enable the Company to bring suit to enforce such
rights.

 

15.5. The Company shall
not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (or for which advancement is
provided hereunder) if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.

 

15.6. The Company’s
obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director,
officer, trustee, partner, managing member, fiduciary, employee or agent of any other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification payments or advancement of Expenses from such Enterprise. Notwithstanding any
other provision of this Agreement to the contrary, (a) Indemnitee shall have no obligation to reduce, offset, allocate, pursue
or apportion any indemnification advancement, contribution or insurance coverage among multiple parties possessing such duties
to Indemnitee prior to the Company’s satisfaction and performance of all its obligations under this Agreement, and (b) the
Company shall perform fully its obligations under this Agreement without regard to whether Indemnitee holds, may pursue or has
pursued any indemnification, advancement, contribution or insurance coverage rights against any Person or entity other than the
Company.

 

ARTICLE 16

ENFORCEMENT AND BINDING EFFECT

 

16.1. The Company expressly
confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve or continue to serve as a director, officer or key employee of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving or continuing to serve as a director, officer or key employee of the Company.

 

16.2. This Agreement
shall be effective as of the date set forth on the first page and may apply to acts or omissions of Indemnitee which occurred prior
to such date if Indemnitee was an officer, director, employee or other agent of the Company, or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of another corporation,
limited liability company, partnership, joint venture, trust or other enterprise, at the time such act or omission occurred.

 

16.3. The Company and
Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable
and difficult to prove, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto
agree that Indemnitee may enforce this Agreement by seeking, among other things, injunctive relief and/or specific performance
hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific
performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company
and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including, without
limitation, temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds
or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may
be required of Indemnitee by the Court, and the Company hereby waives any such requirement of such a bond or undertaking.

 

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ARTICLE 17

MISCELLANEOUS

 

17.1. Successors
and Assigns. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit
of Indemnitee and Indemnitee’s assigns, heirs, executors and administrators. The Company shall require and cause any successor
(whether direct or indirect successor by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial
part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly
to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform
if no such succession had taken place.

 

17.2. Section 409A.
It is intended that any indemnification payment or advancement of Expenses made hereunder shall be exempt from Section 409A of
the Internal Revenue Code of 1986, as amended, and the guidance issued thereunder (“Section 409A”) pursuant
to Treasury Regulation Section 1.409A-1(b)(10). Notwithstanding the foregoing, if any indemnification payment or advancement of
Expenses made hereunder shall be determined to be “nonqualified deferred compensation” within the meaning of Section
409A, then (i) the amount of the indemnification payment or advancement of Expenses during one taxable year shall not affect the
amount of the indemnification payments or advancement of Expenses during any other taxable year, (ii) the indemnification payments
or advancement of Expenses must be made on or before the last day of the Indemnitee’s taxable year following the year in
which the expense was incurred and (iii) the right to indemnification payments or advancement of Expenses hereunder is not subject
to liquidation or exchange for another benefit.

 

17.3. Severability.
In the event that any provision of this Agreement is determined by a court to require the Company to do or to fail to do an act
which is in violation of applicable law, such provision (including, without limitation, any provision within a single Article,
Section, paragraph or sentence) shall be limited or modified in its application to the minimum extent necessary to avoid a violation
of law, and, as so limited or modified, such provision and the balance of this Agreement shall be enforceable in accordance with
their terms to the fullest extent permitted by law.

 

17.4. Entire Agreement.
Without limiting any of the rights of Indemnitee under the Certificate of Incorporation or Bylaws, this Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the subject matter hereof.

 

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17.5. Modification, Waiver and Termination.
No supplement, modification, termination, cancellation or amendment of this Agreement shall be binding unless executed in writing
by the parties hereto. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s
Corporate Status prior to such amendment, alteration or repeal. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

 

17.6. Notices.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been
duly given (a) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed
or (b) mailed by certified or registered mail with postage prepaid on the third business day after the date on which it is so mailed:

 

(i) If to Indemnitee, at the address
indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide in writing to the Company.

 

(ii) If to the Company, to:

Greenlane Holdings, Inc.

1095 Broken Sound Parkway, Suite 300

Boca Raton, Florida 33487

Attn: General Counsel

Telephone: (561) 571-9581

 

or to any other address as may have been
furnished to Indemnitee in writing by the Company.

 

17.7. Applicable
Law. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to its conflict of laws rules. If, notwithstanding the foregoing sentence,
a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware
govern indemnification by the Company of Indemnitee, then the indemnification provided under this Agreement shall in all instances
be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

 

17.8. Identical
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

17.9. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

 

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17.10. Representation
by Counsel. Each of the parties has been represented by and has had an opportunity to consult legal counsel in connection with
the negotiation and execution of this Agreement. No provision of this Agreement shall be construed against or interpreted to the
disadvantage of any party by any court or arbitrator or any governmental authority by reason of such party having drafted or being
deemed to have drafted such provision.

 

17.11. Period of
Limitations. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years
from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that
if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

 

17.12. Additional
Acts. If for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is
required, the Company undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner
that will enable the Company to fulfill its obligations under this Agreement.

 

[Signature page follows]

 

    20 

     

    

 

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

 

	 	COMPANY:
	 	 
	 	GREENLANE HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	INDEMNITEE:
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Address:

  

[Signature page to Indemnification Agreement]

 

     

     

    

 

Schedule A 

 

	Indemnitee 	 	Date 
	Aaron LoCascio	 	April 17, 2019
	Adam Schoenfeld	 	April 17, 2019
	Sasha Kadey	 	April 17, 2019
	Jay Scheiner	 	April 17, 2019
	
        Ethan Rudin

        Douglas Fischer
	 	
        April 17, 2019

        April 17, 2019

	Neil Closner	 	April 17, 2019
	Richard Taney 	 	April 17, 2019
	Jeff Uttz	 	April 17, 2019

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