Document:

Document

Exhibit 4.1
DESCRIPTION OF THE COMPANY’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
The common stock and depositary shares, each representing a 1/100th interest in a share of 7.50% Non-Cumulative Perpetual Preferred Stock, Series B (the “Depositary Shares”), of Level One Bancorp, Inc. (the “Company,” which is also referred to herein as “we,” “our” or “us”) are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.  The following description of the material terms of the Company’s common stock and Depositary Shares is only a summary. This summary does not purport to be a complete description of the terms and conditions of the Company’s common stock and Depositary Shares in all respects and is subject to and qualified in its entirety by reference to the Company’s Articles of Incorporation (“Articles”) and the Company’s Amended and Restated Bylaws (“Bylaws”), each of which are filed or incorporated by reference as an exhibit to the Company’s Annual Report on Form 10-K of which this Exhibit is a part, as well as the Michigan Business Corporation Act (the “MBCA”), and any other documents referenced in the summary and from which the summary is derived. We urge you to read these documents for a more complete understanding of shareholder rights.
General
Our Articles authorize the issuance of up to 20,000,000 shares of common stock, no par value per share, and up to 50,000 shares of preferred stock, no par value per share. 11,500 shares of the Company’s preferred stock, no par value per share, is designated as 7.50% Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”).  Our common stock is listed on the Nasdaq Global Select Market under the symbol “LEVL.”  Our Depositary Shares are listed on the Nasdaq Global Select Market under the symbol “LEVLP.”
Common Stock
Governing Documents.  Holders of shares of our common stock have the rights set forth in our Articles, our Bylaws and the MBCA.
Dividends and Distributions.  The holders of our common stock are entitled to share equally in any dividends that our board of directors may declare from time to time out of funds legally available for dividends, subject to limitations under the MBCA and any preferential rights of holders of our then outstanding preferred stock.
Ranking.  Our common stock ranks junior with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company to all other securities and indebtedness of the Company.
Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of our common stock are entitled to share equally, on a per share basis, in all of our assets available for distribution, after payment to creditors and subject to any prior distribution rights granted to holders of any then outstanding shares of preferred stock.
No Conversion Rights.  Our common stock is not convertible into any other shares of our capital stock.
No Preemptive Rights.  Holders of our common stock do not have any preemptive rights.
Voting Rights.  The holders of our common stock are entitled to one vote per share on any matter to be voted on by the shareholders. The holders of our common stock are not entitled to cumulative voting rights with respect to the election of directors. A plurality of the shares voted shall elect all of the directors then standing for election at a meeting of shareholders at which a quorum is present.
Redemption.  We have no obligation or right to redeem our common stock.
Series B Preferred Stock
Depositary.  Continental Stock Transfer & Trust Co. (the “Depositary”) serves as depositary for the Depositary Shares and as transfer agent and registrar for the Series B Preferred Stock and the Depositary Shares. The Depositary is the sole holder of the Series B Preferred Stock. However, the holders of Depositary Shares are entitled, through the Depositary, to exercise the rights and preferences of the holder of the Series B Preferred Stock, as described below.

Dividends and Distributions.  Dividends on the Series B Preferred Stock are discretionary and are not cumulative, and will accrue and be payable only when, as and if declared by our board of directors or a duly authorized committee of our board of directors out of legally available funds, on a non-cumulative basis on the $2,500 per share liquidation preference, at a rate equal to 7.50% per annum for each quarterly dividend period from the issue date.  Dividends will be paid quarterly, in arrears on February 15, May 15, August 15 and November 15 of each year.
Dividends on the Series B Preferred Stock are non-cumulative. If for any reason our board of directors or a duly authorized committee of our board does not declare cash dividends on the Series B Preferred Stock for a dividend period (or if less than full dividends for any dividend period are declared), we will have no obligation to pay any dividends or any additional dividends, as applicable, for that dividend period, whether or not our board of directors or a duly authorized committee of our board declares dividends on the Series B Preferred Stock for any subsequent dividend period.
We are not obligated to and will not pay holders of the Series B Preferred Stock any interest or sum of money in lieu of interest on any dividend not paid on a dividend payment date. We are also not obligated to and will not pay holders of the Series B Preferred Stock any dividend in excess of the dividends on the Series B Preferred Stock that are payable as described above.  There is no sinking fund with respect to dividends.
Dividend Stopper.  If full dividends on all outstanding shares of the Series B Preferred Stock for the most recently completed dividend period have not been declared and paid or declared and set aside for payment, we will be prohibited from declaring or paying dividends (other than a dividend payable solely in junior stock) or other distributions with respect to, or redeeming, purchasing or acquiring any of, our junior stock during the next succeeding dividend period, other than:
•redemptions, purchases or other acquisitions of junior stock in connection with any benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants or in connection with a dividend reinvestment or shareholder stock purchase plan;
•any declaration of a dividend in connection with any shareholders’ rights plan, or the issuance of rights, stock or other property under any shareholders’ rights plan, or the redemption or repurchase of rights pursuant thereto; and
•conversions into or exchanges for other junior stock and cash solely in lieu of fractional shares of the junior stock.
If dividends for any dividend payment date are not paid in full on the shares of the Series B Preferred Stock and there are issued and outstanding shares of parity stock for which such dividend payment date is also a scheduled dividend payment date, then all dividends declared on shares of the Series B Preferred Stock and such parity stock on such date shall be declared pro rata so that the respective amounts of such dividends shall bear the same ratio to each other as full dividends (or equivalent) per share on the shares of the Series B Preferred Stock and all such parity stock otherwise payable on such dividend payment date (subject to their having been declared out of legally available funds by our board of directors or a duly authorized committee of our board of directors and including, in the case of any such parity stock that bears cumulative dividends, all accrued but unpaid dividends) bear to each other.
Subject to the foregoing, dividends (payable in cash, stock, or otherwise) may be declared and paid on our junior stock, which includes our common stock, from time to time out of any assets legally available for such payment, and the holder of the Series B Preferred Stock or parity stock will not be entitled to participate in any such dividend.
Ranking.  The Series B Preferred Stock will rank, with respect to the payment of dividends and distributions upon our liquidation, dissolution, or winding-up, (i) senior to our common stock and to each class or series of our capital stock we may issue in the future the terms of which do not expressly provide that it ranks on parity with or senior to the Series B Preferred Stock as to dividend and distribution rights and rights on our liquidation, dissolution or winding-up, which we refer to collectively as the “junior stock,” and (ii) on parity with, or equally to, each class or series of our capital stock we may issue in the future the terms of which expressly provide that it ranks on parity with, or equally to, the Series B Preferred Stock as to dividend and distribution rights and rights upon our liquidation, dissolution or winding-up, which we refer to collectively as “parity stock.”

We will not be entitled to issue any class or series of our capital stock, the terms of which provide that such class or series will rank senior to the Series B Preferred Stock as to payment of dividends or distribution of assets upon our liquidation, dissolution or winding-up, without the approval of the holders of at least two-thirds of the shares of our Series B Preferred Stock then outstanding and any class or series of parity stock upon which like voting rights have been conferred and are exercisable and are then outstanding, voting together as a single class, with each series or class having a number of votes proportionate to the aggregate liquidation preference of the outstanding shares of such class or series.
We may, however, from time to time, without notice to or consent from holders of the Series B Preferred Stock, re-open this series and issue additional shares of Series B Preferred Stock and a corresponding number of additional Depositary Shares. All such additional shares of Series B Preferred Stock would be deemed to form a single series with the shares of Series B Preferred Stock relating to the Depositary Shares currently outstanding. In addition, we may, from time to time, without notice to or consent from holders of the Series B Preferred Stock, create and issue parity stock and junior stock.
No Conversion Rights.  The Series B Preferred Stock will not be convertible into, or exchangeable for, shares of any other class or series of our capital stock or other securities. 
No Preemptive Rights.  The holder of the Series B Preferred Stock will have no preemptive rights.
Redemption.  The Series B Preferred Stock will not be subject to any sinking fund or any other obligation of us to redeem or repurchase the Series B Preferred Stock. The Series B Preferred Stock does not have a stated maturity date and will be perpetual unless redeemed at our option.  
The Series B Preferred Stock is redeemable by us, in whole or in part, from time to time, at our option on any dividend payment date on or after August 15, 2025, at a redemption price equal to the liquidation preference, plus any declared and unpaid dividends, without accumulation of undeclared dividends. Neither the holder of Series B Preferred Stock nor the holders of Depositary Shares have the right to require the redemption or repurchase of the Series B Preferred Stock or the Depositary Shares.
The Series B Preferred Stock is redeemable by us, in whole but not in part, at any time within 90 days following a regulatory capital treatment event at a redemption price equal to the liquidation preference, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.  A “regulatory capital treatment event” means our good-faith determination that, as a result of (i) any amendment to, or change in, the laws, rules or regulations of the United States or any political subdivision of or in the United States (including, for the avoidance of doubt, any agency or instrumentality of the United States, including the Federal Reserve and other appropriate federal bank regulatory agencies) that is enacted or becomes effective after the initial issuance of any share of the Series B Preferred Stock; (ii) any proposed change in those laws, rules or regulations that is announced after the initial issuance of any share of the Series B Preferred Stock; or (iii) any official administrative or judicial decision or administrative action or other official pronouncement interpreting or applying those laws, rules or regulations or policies with respect thereto that is announced or becomes effective after the initial issuance of the Series B Preferred Stock, there is more than an insubstantial risk that we will not be entitled to treat the full liquidation preferences of the shares of Series B Preferred Stock then outstanding as “Additional Tier 1 Capital” (or its equivalent) for purposes of the capital adequacy standards of Federal Reserve Regulation Q, 12 C.F.R. Part 217 (or, as and if applicable, the successor capital adequacy guidelines, rules or regulations of the Federal Reserve or the capital adequacy guidelines, rules or regulations of any successor appropriate federal banking agency), as then in effect and applicable, for as long as any share of Series B Preferred Stock is outstanding.
Maturity.  The Series B Preferred Stock is perpetual and does not have a maturity date. We are not required to redeem the Series B Preferred Stock. Accordingly, the Series B Preferred Stock and related Depositary Shares will remain outstanding indefinitely, unless and until we decide to redeem the Series B Preferred Stock.
Liquidation Rights.  In the event that we voluntarily or involuntarily liquidate, dissolve or wind up, the holder of the Series B Preferred Stock at the time outstanding is entitled to receive liquidating distributions in the amount of $2,500 per share of the Series B Preferred Stock (equivalent to $25 per depositary share), plus an amount equal to any declared but unpaid dividends thereon to and including the date of such liquidation without accumulation of any undeclared dividends, out of assets legally available for distribution to our shareholders, before any distribution of assets is made to the holders of our common stock or any other junior stock. After payment of the full amount of 

such liquidating distributions, the holder of the Series B Preferred Stock will not be entitled to any further participation in any distribution of assets by us, and will have no right or claim to any of our remaining assets.
In the event that our assets available for distribution to shareholders upon any liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary, are insufficient to pay in full the amounts payable with respect to all outstanding shares of the Series B Preferred Stock and the corresponding amounts payable on any parity stock, the holders of the Series B Preferred Stock and the holder of such other parity stock will share ratably in any distribution of our assets in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.
For such purposes, our merger with or into any other entity, the merger of any other entity with or into us, our conversion into another entity, or the sale of all or substantially all of our property or business, will not be deemed to constitute our liquidation, dissolution, or winding-up.
Voting Rights.  Except as indicated below, or as otherwise required by the Articles, Bylaws or the MBCA, the holder of the Series B Preferred Stock does not have any voting rights.
If and when the dividends on the Series B Preferred Stock or on any other class or series of our parity stock that has voting rights equivalent to those of the Series B Preferred Stock, have not been declared and paid in full for at least six dividend periods or their equivalent (whether or not consecutive), the authorized number of directors then constituting our board of directors will be automatically increased by two. In that case, the holder of the Series B Preferred Stock and the holders of all other classes and series of parity stock upon which like voting rights have been conferred and are exercisable and which are entitled to vote for the election of the two additional directors, voting together as a single class, with each series or class having a number of votes proportionate to the aggregate liquidation preference of the outstanding shares of such class or series, are entitled to elect the two additional members of our board of directors, which we refer to as the “Preferred Stock Directors,” at any annual or special meeting of shareholders at which directors are to be elected or any special meeting of the holders of the Series B Preferred Stock and any parity stock for which dividends have not been paid, but only if the election of any Preferred Stock Directors would not cause us to violate the corporate governance requirement of the Nasdaq Global Select Market, or any other exchange on which our securities may be listed, that listed companies must have a majority of independent directors. In addition, our board of directors shall at no time have more than two Preferred Stock Directors.
So long as any shares of the Series B Preferred Stock are outstanding, in addition to any other vote or consent of shareholders required by the Articles, Bylaws or the MBCA, or as may be required by the rules of the Nasdaq Global Select Market or any other securities exchange on which the Depositary Shares are listed, the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of the Series B Preferred Stock and any class or series of parity stock upon which like voting rights have been conferred and are exercisable and are then outstanding, voting together as a single class, with each series or class having a number of votes proportionate to the aggregate liquidation preference of the outstanding shares of such class or series, shall be necessary for effecting or validating: (i) any amendment of our Articles of Incorporation to authorize, create or designate, or increase the authorized or designated amount of, any shares of any class or series of stock ranking senior to the Series B Preferred Stock with respect to payment of dividends or distribution of assets on our liquidation, dissolution or winding up, as well as any amendment of our Articles of Incorporation, that would alter or change the voting powers, limitations, preferences or relative rights of the Series B Preferred Stock so as to affect them adversely; or (ii) (a) any merger of us with or into any entity other than a corporation (or comparable foreign entity), or (b) any merger of us with or into any corporation (or comparable foreign entity) unless either the Series B Preferred Stock remains outstanding following the transaction, or the holder of the Series B Preferred Stock is issued a class or series of preferred stock of the surviving or resulting corporation (or comparable foreign entity) or a corporation (or comparable foreign entity) controlling such corporation, having voting powers, preferences and special rights that are substantially identical to those of the Series B Preferred Stock.
Depositary Shares, Each Representing 1/100th Interest in a Share of Series B Preferred Stock
Depositary and Depositary Shares.  The Depositary serves as depositary for the Depositary Shares and as transfer agent and registrar for the Series B Preferred Stock and the Depositary Shares.  Each Depositary Share represents a 1/100th interest in a share of Series B Preferred Stock.

Dividends and Distributions.  Each dividend payable on a depositary share will be in an amount equal to 1/100th of the dividend declared and payable on the related share of the Series B Preferred Stock.  The Depositary will distribute any cash dividends or other cash distributions received in respect of the deposited Series B Preferred Stock to the record holders of Depositary Shares relating to the underlying Series B Preferred Stock in proportion to the number of Depositary Shares held by the holders. If we make a distribution other than in cash, the Depositary will distribute any securities or property received by it to the record holders of Depositary Shares entitled to those distributions, unless it determines that the distribution cannot be made proportionally among those holders or that (after consultation with us) it is not feasible to make a distribution, in which case the Depositary may, with our approval, adopt a method of distribution that it deems equitable and practicable, including the sale of the securities or property and distribute the net proceeds from the sale to the holders of the Depositary Shares in proportion to the number of Depositary Shares they hold.
Redemption.  If we redeem the Series B Preferred Stock represented by the Depositary Shares, in whole or in part, the Depositary Shares will be redeemed with the proceeds received by the Depositary resulting from the redemption of the Series B Preferred Stock held by the Depositary. The redemption price per depositary share will be equal to 1/100th of the redemption price per share payable with respect to the Series B Preferred Stock (or $25 per depositary share), plus 1/100th of any declared and unpaid dividends, without accumulation of any undeclared dividends on the related share of the Series B Preferred Stock.
If we redeem shares of the Series B Preferred Stock held by the Depositary, the Depositary will redeem, as of the same redemption date, the number of Depositary Shares representing those shares of the Series B Preferred Stock so redeemed. If fewer than all of the outstanding Depositary Shares are redeemed, the Depositary will select the shares to be redeemed pro rata or by lot, or by any other equitable method, in each case as we may determine. 
Voting Rights.  Because each depositary share represents a 1/100th interest in a share of the Series B Preferred Stock, holders of depositary receipts are entitled to 1/100th of a vote per depositary share under those limited circumstances in which holders of the Series B Preferred Stock are entitled to a vote.
When the Depositary receives notice of any meeting at which the holders of the Series B Preferred Stock are entitled to vote, the Depositary will provide the information contained in the notice to the record holders of the Depositary Shares relating to the Series B Preferred Stock. Each record holder of the Depositary Shares on the record date, which will be the same date as the record date for the Series B Preferred Stock, may instruct the Depositary to vote the amount of the Series B Preferred Stock represented by the holder’s Depositary Shares. Insofar as practicable, the Depositary will vote the amount of the Series B Preferred Stock represented by Depositary Shares in accordance with the instructions it receives. We will agree to take all reasonable actions that the Depositary determines are necessary to enable the Depositary to vote as instructed. If the Depositary does not receive specific instructions from the holders of any Depositary Shares representing proportional interests in the Series B Preferred Stock, it will not vote the amount of the Series B Preferred Stock represented by such Depositary Shares.
No Conversion Rights.  The holders of the Depositary Shares do not have any conversion rights.
No Preemptive Rights.  The holders of the Depositary Shares do not have any preemptive rights.
Preferred Stock
Upon authorization of our board of directors, we may issue shares of one or more series of our preferred stock from time to time. Our board of directors may, without any action by holders of common stock and except as may be otherwise provided in the terms of any series of preferred stock of which there are shares outstanding, adopt resolutions to designate and establish a new series of preferred stock. Upon establishing such a series of preferred stock, the board will determine the number of shares of preferred stock of that series that may be issued and the rights and preferences of that series of preferred stock. The rights of any series of preferred stock may include, among others:
•general or special voting rights;
•preferential liquidation rights;
•preferential cumulative or noncumulative dividend rights;
•redemption or put rights; and

•conversion or exchange rights.
We may issue shares of, or rights to purchase shares of, one or more series of our preferred stock that have been designated from time to time, the terms of which might:
•adversely affect voting or other rights evidenced by, or amounts otherwise payable with respect to, the common stock or other series of preferred stock;
•discourage an unsolicited proposal to acquire us; or
•facilitate a particular business combination involving us.
Any of these actions could have an anti-takeover effect and discourage a transaction that some or a majority of our shareholders might believe to be in their best interests or in which our shareholders might receive a premium for their stock over our then market price.
Anti-Takeover Considerations and Special Provisions of Our Articles, Bylaws and the MBCA
The MBCA and certain provisions of our Articles and Bylaws could have the effect of delaying or deferring the removal of incumbent directors or delaying, deferring or discouraging another party from acquiring control of us, even if such removal or acquisition would be viewed by our shareholders to be in their best interests. We believe that these provisions are beneficial because the negotiation they encourage could result in improved terms of any unsolicited proposal.
Authorized But Unissued Capital Stock.  We have authorized but unissued shares of common stock and preferred stock, and our board of directors may authorize the issuance of one or more series of preferred stock without shareholder approval. These shares could be used by our board of directors to make it more difficult or to discourage an attempt to obtain control of us through a merger, tender offer, proxy contest or otherwise.
Number of Directors; Noncumulative Voting for Directors.  Our Bylaws provide that the authorized number of directors of the Company may be fixed only by our board by resolution of a majority of the directors then in office, although such number may not be less than five nor more than twenty-five. In addition, our Articles do not allow for cumulative voting for directors, which may make it more difficult for a non-company nominee to be elected to our board of directors.
Filling of Board Vacancies; Removals.  Any vacancies in our board of directors and any directorships resulting from any increase in the number of directors may be filled by the board, acting by not less than a majority of the directors then in office, although less than a quorum.
Limitation on Right to Call a Special Meeting of Shareholders.  Our Bylaws provide that special meetings of shareholders may only be called by our board or our president or by the holders of not less than a majority of our outstanding shares of capital stock entitled to vote for the purpose for which the meeting is being called.
Action By Unanimous Written Consent of Shareholders.  Our Bylaws provide that any action required or permitted to be taken at an annual or special meeting of shareholders may be taken without a meeting, but only if all of the shareholders entitled to vote consent in writing.
Advance Notice Provisions.  Our Bylaws generally require a shareholder desiring to propose new business at a shareholder meeting to provide advance written notice to our corporate secretary, not later than 90 days nor earlier than 120 days prior to the anniversary of the preceding year's annual shareholder meeting, containing certain information about the shareholder and the business to be brought. Only business within the purposes described in the notice of the meeting may be conducted at a special meeting. This provision could delay shareholder actions that are favored by the holders of a majority of our outstanding stock until the next shareholders' meeting.
Additionally, our Bylaws provide that nominations for directors must be made in accordance with the provisions of our Bylaws, which generally require, among other things, that such nominations be provided in writing to our corporate secretary, not later than 90 days nor earlier than 120 days prior to the anniversary of the preceding year's annual shareholder meeting, and that the notice to our corporate secretary contain certain information about the shareholder and the director nominee.
Amendment of the Bylaws.  Our Bylaws provide that our Bylaws may be altered, amended or repealed by our board without prior notice to or approval by our shareholders. Our Bylaws may also be altered, amended or repealed 

by the affirmative vote of holders of a majority of the shares of our capital stock entitled to vote at any meeting of shareholders. Accordingly, our board could take action to amend our Bylaws in a manner that could have the effect of delaying, deferring or discouraging another party from acquiring control of us.
Michigan Law.  We may opt-in to the provisions of Chapter 7A of the MBCA. In general, subject to certain exceptions, Chapter 7A of the MBCA prohibits a Michigan corporation from engaging in a “business combination” with an “interested shareholder” for a period of five years following the date that such shareholder became an interested shareholder, unless: (i) prior to such date, the board of directors approved the business combination; or (ii) on or subsequent to such date, the business combination is approved by at least 90% of the votes of each class of the corporation's stock entitled to vote and by at least two-thirds of such voting stock not held by the interested shareholder or such shareholder's affiliates. The MBCA defines a “business combination” to include certain mergers, consolidations, dispositions of assets or shares and recapitalizations. An “interested shareholder” is defined by the MBCA to include a beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation. While our board to date has not elected to opt-in to these provisions, any future decision to do so could have an anti-takeover effect.
Federal Banking Law.  The ability of a third party to acquire our stock is also limited under applicable U.S. banking laws, including regulatory approval requirements. The Bank Holding Company Act of 1956, as amended, requires any “bank holding company” to obtain the approval of the Federal Reserve before acquiring, directly or indirectly, more than 5% of our outstanding common stock. Federal law also prohibits any person or company from acquiring “control” of an FDIC-insured depository institution or its holding company without prior notice to the appropriate federal bank regulator. “Control” is conclusively presumed to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or bank holding company but may arise under certain circumstances between 10% and 24.99% ownership.Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE
AGREEMENT (the “Agreement”) is dated as of [_________] [__], 2021, by and among NEXGEL, Inc., a
Delaware corporation (the “Company”), and each of the purchasers identified on the signature pages hereto
and such purchasers’ respective successors and assigns (individually, a “Purchaser” and collectively,
the “Purchasers”).

 

The parties hereto
agree as follows:

 

Article I.

Purchase and Sale of COMMON Stock

 

Section 1.01          Purchase
and Sale of Stock. Upon the following terms and subject to the conditions set forth herein, the Company shall issue and sell
to each Purchaser, and each Purchaser shall purchase from the Company, that number of shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”), as is set forth on each such Purchaser’s signature
page hereto (collectively, the “Shares”), at a price per share equal to $0.08 (the “Per
Share Purchase Price,” and such amounts in the aggregate, the “Purchase Price”). In the
event that this Agreement is amended between Initial Closing Date (as defined below) and a Subsequent Closing Date (as defined
below) to reduce the Per Share Purchase Price, then the Purchasers in the Initial Closing Date shall be entitled to receive from
the Company additional shares of Common Stock, for no additional consideration, in an amount sufficient that the pro rata portion
of the Purchase Price paid by such Purchaser hereunder for the Shares then held, when divided by the total number of Shares then
held by such Purchaser plus such additional shares of Common Stock issued will equal the reduced Purchase Price. The Company and
the Purchasers are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities
registration afforded by Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended
(the “Securities Act”).

 

Section 1.02         Closing.

 

(a)            The
Purchase of the Common Stock shall occur in two separate closings. On the initial closing date (the “Initial Closing
Date”), upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell at the initial closing (the “Initial
Closing”), and the Purchasers, severally and not jointly, agree to purchase at the Initial Closing, an aggregate
number of Shares, not to exceed, for any individual Purchaser, the aggregate number of Shares agreed to be purchased by such Purchaser,
to be determined by the mutual agreement of the Company and the respective such Purchasers. Thereafter, on a subsequent closing
date (the “Subsequent Closing Date”, and the Initial Closing Date and any Subsequent Closing Date, each
a “Closing Date”), upon the terms and subject to the conditions set forth herein, substantially concurrent
with the execution and delivery of this Agreement by the Purchasers purchasing shares of Common Stock on such Subsequent Closing
Date, the Company agrees to sell, and the Purchasers purchasing shares of Common Stock at such subsequent closing, severally and
not jointly, agree to purchase, the remainder of the Shares, not to exceed, for any individual Purchaser, the aggregate number
of shares agreed to be purchased by such Purchaser, less the number of Shares purchased by such Purchaser at the Initial Closing.
Each Purchaser purchasing shares of Common Stock on a Closing Date shall deliver to the Company such Purchaser’s Purchase
Price by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and the
Company shall irrevocably instruct the Company’s transfer agent to deliver to each Purchaser a stock certificate representing
such Purchaser’s respective shares of Common Stock. Notwithstanding anything herein to the contrary, each Closing Date shall
occur on or before December 15, 2020; provided, however, that such date may be extended by the Company (the “Termination
Date”).

 

     

     

    

 

(b)            If
a Closing is not held on or before the Termination Date, the Company shall cause all subscription documents and funds to be returned,
without interest or deduction, to each prospective Purchaser. The Company shall also cause any subscription documents or funds
received following the final Closing to be returned, without interest or deduction, to each applicable prospective Purchaser. Notwithstanding
the foregoing, the Company in its sole discretion may elect not to sell to any Person any or all of the shares of Common Stock
requested to be purchased hereunder, provided that the Company causes all corresponding subscription documents and funds received
from such person to be promptly returned.

 

Article II.

Representations and Warranties

 

Section 2.01         Representations
and Warranties of the Company. The Company hereby represents and warrants to the Purchasers, as of the date hereof, as follows:

 

(a)            Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to own and use its properties and its assets and conduct
its business as currently conducted. The Company has no subsidiary. The Company is not in violation of any of the provisions of
its organizational or charter documents, including, but not limited to the Charter Documents (as defined below). The Company is
duly qualified to conduct business and is in good standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, would not result in a direct and/or indirect (i) material adverse effect on the legality,
validity or enforceability of any of the Shares and/or this Agreement, (ii) material adverse effect on the results of operations,
assets, business, condition (financial and other) or prospects of the Company, taken as a whole, or (iii) material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under the Transaction
Documents (as defined below) (any of (i), (ii) or (iii), a “Material Adverse Effect”).

 

(b)            Capitalization
and Voting Rights. The authorized capital stock of the Company is as set forth in the SEC Reports (as defined below) and, as
of the date hereof, the Company has, 94,894,079 shares of Common Stock issued and outstanding and no shares of preferred stock,
par value $0.001 per shares, issued and outstanding. All of the issued and outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable. There are no outstanding securities of the Company which contain any preemptive,
redemption or similar provisions, nor is any holder of securities of the Company entitled to preemptive or similar rights arising
out of any agreement or understanding with the Company by virtue of any of the Transaction Documents, and there are no contracts,
commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company. The
Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement.
Except grants made pursuant to the NEXGEL, Inc. 2019 Long-Term Incentive Plan or otherwise described in the SEC Reports, there
are no outstanding options, warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or
to purchase or acquire, any shares of capital stock of the Company or contracts, commitments, understandings, or arrangements by
which the Company is or may become bound to issue any shares of capital stock of the Company, or securities or rights convertible
or exchangeable into shares of capital stock of the Company. Except as otherwise required by law, there are no restrictions upon
the voting or transfer of any of the shares of capital stock of the Company pursuant to the Company’s Charter Documents or
other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound.
All of such outstanding capital stock has been issued in compliance in all material respects with applicable federal and state
securities laws. The issuance and sale of the Shares and, upon issuance, the Shares, as contemplated hereby will not obligate the
Company to issue shares of Common Stock or other securities to any other person (other than the Purchasers) and will not result
in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security. The Company does not have outstanding
shareholder purchase rights or “poison pill” or any similar arrangement in effect giving any person the right to purchase
any equity interest in the Company upon the occurrence of certain events.

 

    - 2 -

     

    

 

(c)            Authorization;
Enforceability. The Company has the requisite corporate right, power and authority to enter into, execute and deliver this
Agreement and each other agreement, document, instrument and certificate to be executed by the Company in connection with the consummation
of the transactions contemplated hereby (collectively referred to as the “Transaction Documents”), and
to perform fully its obligations hereunder and thereunder. All necessary corporate action on the part of the Company, its directors
and shareholders necessary for the (a) authorization execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company; and (b) authorization, sale, issuance and delivery of the Shares contemplated hereby and the performance
of the Company’s obligations under this Agreement and the other Transaction Documents has been taken. This Agreement and
the other Transaction Documents have been duly executed and delivered by the Company and each constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its respective terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of public policy. The Shares are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all mortgages, pledges, liens, claims, charges, encumbrances or other restrictions (collectively,
 “Encumbrances”) imposed by the Company other than restrictions on transfer pursuant to applicable law
or otherwise provided for in the Transaction Documents.

 

(d)            No
Conflict; Governmental Consents.

 

(i)           The
execution and delivery by the Company of this Agreement and the other Transaction Documents, the issuance and sale of the Shares
and the consummation of the other transactions contemplated hereby or thereby do not and will not (i) result in the violation
of any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or
by which the Company is bound including without limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, (ii) conflict with or violate any provision of the Company’s Amended
and Restated Certificate of Incorporation (the “Articles”) or the Amended and Restated Bylaws, (and collectively
with the Articles, the “Charter Documents”) of the Company, or (iii) conflict with, or result in
a breach or violation of, any of the terms or provisions of, or constitute (with or without due notice or lapse of time or both)
a default or give to others any rights of termination, amendment, acceleration or cancellation (with or without due notice, lapse
of time or both) under any agreement, credit facility, lease, loan agreement, mortgage, security agreement, trust indenture or
other agreement or instrument to which the Company is a party or by which any of them is bound or to which any of their respective
properties or assets is subject, nor result in the creation or imposition of any Encumbrances upon any of the properties or assets
of the Company.

 

(ii)          No
vote, approval or consent of any holder of capital stock of the Company or any other third parties is required to be obtained by
the Company in connection with the authorization, execution, delivery and performance of this Agreement and the other Transaction
Documents or in connection with the authorization, issue and sale of the Shares, except as has been previously obtained.

 

    - 3 -

     

    

 

(iii)         No
consent, approval, authorization or other order of any governmental authority or any other person is required to be obtained by
the Company in connection with the authorization, execution, delivery and performance of this Agreement and the other Transaction
Documents or in connection with the authorization, issue and sale of the Shares, except such post-sale filings as may be required
to be made with the Commission, FINRA and with any state or foreign blue sky or securities regulatory authority, all of which shall
be made when required.

 

(e)            Shell
Company Status; SEC Reports; Financial Statements. The Company has never been an issuer subject to Rule 144(i) under
the Securities Act. The Company has filed all reports required to be filed by it under the Securities Act and Securities Exchange
Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof,
for the twenty-four (24) months preceding the date hereof (or such shorter period as the Company was required by law to file such
reports) (the foregoing materials, together with the Company’s Registration Statement on Form S-1 (File No. 333-229173),
originally filed with the Commission on January 9, 2019, as amended, being collectively referred to herein as the "SEC
Reports") on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles (“GAAP”) applied on a consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the footnotes thereto, and fairly present in all material respects the financial position
of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(f)             Reserved.

 

(g)            Litigation.
There is no pending or, to the Company’s knowledge, threatened legal or governmental proceedings against the Company. The
Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality which could reasonably be expected to have a Material Adverse Effect. There is no action, suit, proceeding
or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends to initiate.
Neither the Company, nor any director or officer thereof, is subject of any action involving (i) a claim of violation of or
liability under federal or state securities laws or (ii) a claim of breach of fiduciary duty. There is no pending or, to the
Company’s knowledge, contemplated investigation by the Commission involving the Company or any current or former director
or officer of the Company. For purposes of this Agreement, the term “knowledge” when used with respect to the Company
will mean the present, conscious awareness of a particular fact or matter by the Company’s chief executive officer or interim
chief financial officer.

 

(h)            Compliance.
The Company: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company), or has not received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which
it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is
not in violation of any material judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is
not or has not been in violation, in any material respect, of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters.

 

    - 4 -

     

    

 

(i)             Regulatory
Permits. The Company possess all certificates, authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not reasonably
be expected to result in a Material Adverse Effect (“Material Permits”), and the Company has not received
any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(j)             Brokers.
Except for Alere Financial Partners, A Division of Cova Capital Partners, LLC, neither the Company nor any of the Company's officers,
directors, employees or shareholders has employed or engaged any broker or finder in connection with the transactions contemplated
by this Agreement and no fee or other compensation is or will be due and owing to any broker, finder, underwriter, placement agent
or similar person in connection with the transactions contemplated by this Agreement. The Company is not party to any agreement,
arrangement or understanding whereby any person has an exclusive right to raise funds and/or place or purchase any debt or equity
securities for or on behalf of the Company.

 

(k)            No
General Solicitation. None of the Company, any of their affiliates, and any person acting on the Company’s behalf
and its direction, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) in connection with the offer or sale of the Shares.

 

(l)             Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 2.02, no
registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchaser as contemplated
hereby.

 

(y)            Bad
Actor. No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act
(a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge, any Person
listed in the first paragraph of Rule 506(d)(1) with respect to the Company as an “issuer” for purposes of
Rule 506 promulgated under the Securities Act, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv)
or (d)(3), is applicable.

 

Section 2.02         Representations
and Warranties of the Purchasers. Each of the Purchasers hereby makes the following representations and warranties to the Company
with respect solely to itself and not with respect to any other Purchaser:

 

(a)            Organization
and Standing of the Purchasers. If the Purchaser is an entity, such Purchaser is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation
or organization.

 

(b)            Authorization
and Power. Each Purchaser has the requisite power and authority to enter into and perform this Agreement and to purchase the
Shares being sold to such Purchaser hereunder. This Agreement has been duly authorized, executed and delivered by such Purchaser
and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of such Purchaser enforceable
against such Purchaser in accordance with the terms thereof, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally
the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

 

    - 5 -

     

    

 

(c)            Purchase
For Own Account. Each Purchaser is acquiring the Shares solely for its own account and not with a view to or for sale in connection
with distribution. Each Purchaser does not have a present intention to sell the Shares, nor a present arrangement (whether or not
legally binding) or intention to effect any distribution of the Shares to or through any person or entity. Each Purchaser acknowledges
that it is able to bear the financial risks associated with an investment in the Shares and that it has been given full access
to such records of the Company and to the officers of the Company and received such information as it has deemed necessary or appropriate
to conduct its due diligence investigation and has sufficient knowledge and experience in investing in companies similar to the
Company in terms of the Company’s stage of development so as to be able to evaluate the risks and merits of its investment
in the Company.

 

(d)            Status
of Purchasers. Such Purchaser is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act and such Purchaser
is not a broker-dealer.

 

(e)            Opportunities
for Additional Information. Each Purchaser acknowledges that such Purchaser has had the opportunity to ask questions of and
receive answers from, or obtain additional information from, the executive officers of the Company concerning the financial and
other affairs of the Company, and to the extent deemed necessary in light of such Purchaser’s personal knowledge of the Company’s
affairs, such Purchaser has asked such questions and received answers to the full satisfaction of such Purchaser, and such Purchaser
desires to invest in the Company. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser
or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and
completeness of the Company’s representations and warranties contained in the Transaction Documents.

 

(f)             No
General Solicitation. Each Purchaser acknowledges that the Shares were not offered to such Purchaser by means of any form of
general or public solicitation or general advertising, or publicly disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any newspaper, magazine, or similar media, or broadcast over
television or radio or (ii) any seminar or meeting to which such Purchaser was invited by any of the foregoing means of communications.

 

(g)            Rule 144.
Such Purchaser understands that the Shares must be held indefinitely unless they are registered under the Securities Act or an
exemption from registration is available. Such Purchaser acknowledges that such Purchaser is familiar with Rule 144 of the
rules and regulations of the Commission, as amended, promulgated pursuant to the Securities Act (“Rule 144”),
and that such person has been advised that Rule 144 permits resales only under certain circumstances. Such Purchaser understands
that to the extent that Rule 144 is not available, such Purchaser will be unable to sell any Shares without either registration
under the Securities Act or the existence of another exemption from such registration requirement.

 

(h)            General.
Such Purchaser understands that the Shares are being offered and sold in reliance on a transactional exemption from the registration
requirement of federal and state securities laws and the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein in order to determine the applicability
of such exemptions and the suitability of such Purchaser to acquire the Shares.

 

    - 6 -

     

    

 

(i)             Independent
Investment. Except as may be disclosed in any filings with the Commission by the Purchasers under Section 13 and/or Section 16
of the Exchange Act, no Purchaser has agreed to act with any other Purchaser for the purpose of acquiring, holding, voting or disposing
of the Shares purchased hereunder for purposes of Section 13(d) under the Exchange Act, and each Purchaser is acting
independently with respect to its investment in the Shares.

 

Article III.

OTHER AGREEMENTS OF THE PARTIES

 

Section 3.01         Transfer
Restrictions.

 

(a)            The
Purchasers covenant that the Shares will only be disposed of pursuant to an effective registration statement under, and in compliance
with the requirements of, the Securities Act or pursuant to an available exemption from the registration requirements of the Securities
Act, and in compliance with any applicable state securities laws. In connection with any transfer of Shares other than pursuant
to an effective registration statement or to the Company, or pursuant to Rule 144 at such time that the Company is not required
to be in compliance with Rule 144(c) and any other limitations or requirements set forth in Rule 144, the Company
may require the transferor to provide the Company with an opinion of counsel selected by the transferor, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration
under the Securities Act.

 

(b)            The
Purchasers agree to the imprinting of the following legend on any certificate evidencing any of the Shares (in addition to any
legend required by applicable state securities or “blue sky” laws):

 

THESE SECURITIES REPRESENTED
BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION
OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

Section 3.02         Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares to the Purchasers.

 

Section 3.03         Securities
Laws Disclosure; Publicity. The Company shall, at or before 5:30 p.m., New York time, on the fourth business day following
execution of this Agreement, file a Current Report on Form 8-K with the Commission describing the terms of the transactions
contemplated by the Transaction Documents and including as exhibits to such Current Report on Form 8-K the Transaction Documents,
in the form required by the Exchange Act. Thereafter, the Company shall timely file any filings and notices required by the Commission
or applicable state law with respect to the transactions contemplated hereby and provide copies thereof to the Purchasers upon
request.

 

Section 3.04         Use
of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder for working capital purposes.

 

    - 7 -

     

    

 

Section 3.05         Equal
Treatment of Purchasers. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the
Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall
not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting
of the Shares or otherwise.

 

Section 3.06         Rights
to Future Stock Issuances.

 

(a)            Each
Purchaser has the right of first refusal to purchase such Purchaser’s Pro Rata Share (as defined below) of all (or any part)
of any New Securities (as defined in Section 3.06(b) below) that the Company may from time to time issue after the date
of this Agreement, provided, however, such Purchaser shall have no right to purchase any such New Securities if such
Purchaser cannot demonstrate to the Company’s reasonable satisfaction that such Purchaser is at the time of the proposed
issuance of such New Securities an “accredited investor” as such term is defined in Regulation D under the Securities
Act. A Purchaser’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of
(a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the shares of Series Seed
Preferred Stock owned by such Purchaser, to (b) the Fully-Diluted Share Number. For the purposes of the Agreement, the “Fully-Diluted
Share Number” shall mean that number of shares of the Company’s capital stock equal to the sum
of (i) all shares of the Company’s capital stock (on an as-converted basis) issued and outstanding, assuming exercise
or conversion of all options, warrants and other convertible securities and (ii) all shares of the Company’s capital
stock reserved and available for future grant under any equity incentive or similar plan.

 

(b)            “New
Securities” shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become,
convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term “New
Securities” does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding
shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any
options, warrants or rights to purchase any securities of the Company outstanding as of the Agreement Date and any securities issuable
upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock
dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter
to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant
to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements
that are approved by the Board; (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to this
Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable
primarily for other than equity financing purposes and approved by the Board of Directors; and (g) shares of Common Stock
issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

(c)            In
the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Purchaser a written notice
of its intention to issue New Securities (the “Notice”), describing the type of New Securities and the
price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 4.04.
Each Purchaser shall have five (5) days from the date such Notice is effective, as determined pursuant to Section 4.04
based upon the manner or method of notice, to agree in writing to purchase such Purchaser’s Pro Rata Share of such New Securities
for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased (not to exceed such Purchaser’s Pro Rata Share).

 

    - 8 -

     

    

 

(d)            In
the event that the Purchasers fail to exercise in full the right of first refusal within such five (5) day period, then the
Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Purchasers’
rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers
thereof than specified in the Company’s Notice to the Purchasers. In the event that the Company has not issued and sold the
New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities
without again first offering such New Securities to the Purchasers pursuant to this Section 3.06.

 

(e)            The
covenants set forth in this Section 3.06 shall terminate and be of no further force or effect immediately before the
Company’s securities begin trading on a National Securities Exchange. For the purposes of this Agreement, “National
Securities Exchange” shall mean an exchange registered with the Commission under Section 6(a) of the Exchange
Act of 1934 or the Nasdaq Stock Market or any successor thereto.

 

Section 3.07         Form D;
Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D.
The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for,
or to qualify the Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws
of the states of the United States, and shall provide evidence of such actions upon request of any Purchaser.

 

Article IV.

Miscellaneous

 

Section 4.01         Fees
and Expenses. Except as otherwise set forth in this Agreement and the other Transaction Documents, each party shall pay the
fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all stamp
or other similar taxes and duties levied in connection with issuance of the Shares pursuant hereto.

 

Section 4.02         Specific
Enforcement, Consent to Jurisdiction.

 

(a)            The
Company and the Purchasers acknowledge and agree that irreparable damage would occur in the event that any of the provisions of
this Agreement or the other Transaction Documents were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent or cure breaches
of the provisions of this Agreement and to enforce specifically the terms and provisions hereof or thereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.

 

(b)            Each
of the Company and the Purchasers (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting
in the Southern District of New York and the courts of the State of New York located in New York County for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents or the transactions
contemplated hereby or thereby and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Purchasers consents
to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing in this Section 4.02 shall affect or limit any right to serve process in any other manner permitted
by law.

 

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Section 4.03          Entire
Agreement; Amendment. This Agreement (including all exhibits and schedules hereto) and the Transaction Documents contain the
entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth
herein or in the Transaction Documents, neither the Company nor any of the Purchasers makes any representations, warranty, covenant
or undertaking with respect to such matters and they supersede all prior understandings and agreements with respect to said subject
matter, all of which are merged herein. No provision of this Agreement may be waived or amended other than by a written instrument
signed by the Company and the Purchasers holding a majority of the Shares then outstanding and held by Purchasers.

 

Section 4.04          Notices.
Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and
shall be effective (a) upon hand delivery by telex (with correct answer back received), telecopy, e-mail or facsimile at the
address or number designated below (if delivered on a business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a business day during normal business hours where
such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

(a)            If
to the Company:

 

NEXGEL, Inc.

2150 Cabot Boulevard, West 

Suite B 

Langhorne, PA 19067

Attention: Chief Executive Officer

Fax No.: ([ ]) [ ]

 

(b)            If
to any Purchaser at the address of such Purchaser set forth on the signature pages hereto.

 

Any party hereto may
from time to time change its address for notices by giving at least ten (10) days written notice of such changed address to
the other party hereto.

 

Section 4.05          Waivers.
No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

 

Section 4.06          Headings.
The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.

 

Section 4.07          Successors
and Assigns; Restrictions on Transfer. This Agreement shall be binding upon and inure to the benefit of the parties and their
successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of the Purchasers.

 

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Section 4.08          No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section 4.09          Governing
Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another
jurisdiction. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement
to be drafted. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all rights to a
trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 4.10         Survival.
The representations and warranties of the Company and the Purchasers shall survive the execution and delivery hereof and the Closing
hereunder for the applicable statute of limitations period.

 

Section 4.11         Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have
been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if
such facsimile signature were the original thereof.

 

Section 4.12         Severability.
The provisions of this Agreement and the other Transaction Documents are severable and, in the event that any court of competent
jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement or the
other Transaction Documents shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement or the other Transaction
Documents and such provision shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part
of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum
extent possible.

 

Section 4.13         Further
Assurances. From and after the date of this Agreement, upon the request of any Purchaser or the Company, each of the Company
and the Purchasers shall execute and deliver such instrument, documents and other writings as may be reasonably necessary or desirable
to confirm and carry out and to effectuate fully the intent and purposes of this Agreement and the other Transaction Documents.

 

Section 4.14         Like
Treatment of Purchasers. No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification
of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the Purchasers then
holding Shares. Further, the Company shall not make any payments or issue any securities to the Purchasers in amounts which are
disproportionate to the respective numbers of outstanding Shares held by any Purchasers at any applicable time. For clarification
purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each
Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or voting of the Shares or otherwise.

 

[SIGNATURE PAGES FOLLOWS]

 

    - 11 -

     

    

 

Company Signature Page

 

IN WITNESS WHEREOF,
the Company has caused this Agreement to be duly executed by an authorized signatory as of the date first above written.

 

	 	NEXGEL, INC.
	 	 
	 	By:	                   
	 	Name: Adam Levy
	 	Title: Chief Executive Officer

 

     

     

    

 

Purchaser Signature Page

 

By its execution and
delivery of this signature page, the undersigned Purchaser hereby joins in and agrees to be bound by the terms and conditions of
the Stock Purchase Agreement dated as of November __, 2020 (the “Purchase Agreement”) by and among NEXGEL, Inc.
and the Purchasers (as defined therein), as to the number of shares of Common Stock set forth below, and authorizes this signature
page to be attached to the Purchase Agreement or counterparts thereof.

 

	 	Name of Purchaser:
	 	 
	 	 
	 	By:	 
	 	Name:
	 	Title:
	 	 
	 	Address:	 
	 	 
	 	 
	 	 
	 	 

 

	 	Telephone No.:	 
	 	 
	 	Facsimile No.:	 
	 	 
	 	Email Address:	 
	 	 
	 	Number of Shares:	 
	 	 
	 	Aggregate Purchase Price: $.08 cents per share
	 	 
	 	Tax ID No.	 

 

Delivery Instructions (if different than above):

 

c/o: ____________________________________________________________

 

Address: ________________________________________________________

 

______________________________________________________________

 

Telephone No.: ___________________________________________________

 

Facsimile No. : ___________________________________________________

 

Other Special Instructions: ___________________________________________

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