Exhibit 10.20

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of
November 2, 2015 (the “Effective Date”) by and between Innovate
Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and
Christopher P. Prior, Ph.D. (the “Executive”), an individual residing in
Delaware County, Pennsylvania.

 

WITNESSETH:

 

WHEREAS, the Company wishes to employ the Executive, and the Executive desires
to accept employment with the Company, upon the terms and conditions of this
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein, and of other good and valuable consideration, including the employment
of the Executive by the Company and the compensation to be received by the
Executive from the Company from time to time, and specifically the compensation
to be received by the Executive pursuant to Section 4 hereof, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:

 

1.            Employment. As of the Effective Date, the Company hereby employs
the Executive and the Executive hereby accepts employment as the Chief Executive
Officer (“CEO”) of the Company upon the terms and conditions of this Agreement.
The Executive and shall report to the Board of Directors of the Company (the
“Board”).

 

2.            Duties. The Executive shall faithfully perform all duties of the
Company related to the position or positions held by the Executive, including
but not limited to all duties set forth in this Agreement and/or in the Bylaws
of the Company related to the position or positions held by the Executive and
all additional duties that are prescribed from time to time by the Board or
other designated officers of the Company. The Executive shall devote the
Executive’s full time and attention to the performance of the Executive’s duties
and responsibilities on behalf of the Company and in furtherance of its best
interests; provided, however, that the Executive, subject to the Executive’s
obligations hereunder, shall also be permitted to make personal investments,
perform reasonable volunteer services and, with the prior consent of the
Company, serve on outside boards of directors for non-profit corporations. The
Executive shall comply with all Company policies, standards, rules and
regulations (the “Company Policies”) and all applicable government laws, rules
and regulations that are now or hereafter in effect. The Executive acknowledges
receipt of copies of all written Company Policies that are in effect as of the
date of this Agreement.

 

3.            Term. Unless earlier terminated as provided herein, the initial
term of this Agreement shall commence on the Effective Date and shall continue
for three years from the Minimum Financial Milestone Event (as defined below)
(the “Term”). Thereafter, this Agreement shall automatically renew on a
year-to-year basis on the same terms and conditions as set forth herein unless:
(a) earlier terminated or amended as provided herein or (b) either party gives
written notice of non-renewal at least 60 days prior to the end of the Term or
any renewal term thereafter. The initial term and all renewals thereof are
referred to as the “Term.”

 

   

 

 

4.            Compensation. During the Term, as compensation for the services
rendered by the Executive under this Agreement, the Executive shall be entitled
to receive the following (all payments are subject to applicable withholdings):

 

(a)          Base Salary. Upon the occurrence of the Minimum Financial Milestone
Event (as defined below), the Executive shall be paid an annual salary in the
amount of $240,000, which shall be payable in accordance with the then-current
payroll schedule of the Company (the “Base Salary”), less all applicable taxes
and withholdings; provided, however, that the Executive shall be paid minimum
wage in accordance with applicable state law until such time as the Minimum
Financial Milestone Event has occurred. From and after the date of the Minimum
Financial Milestone Event, the Executive shall be entitled to payment of the
Base Salary in accordance with the then-current payroll schedule of the Company.
Upon the occurrence of the Second Financial Milestone Event (as defined below),
the Executive's Base Salary shall be increased to $300,000, which shall be paid
in accordance with the then-current payroll schedule of the Company commencing
on the first regularly scheduled payroll date of the Company after the Second
Minimum Financial Milestone Event has occurred. The Executive's salary may be
increased from time to time by the Board. Notwithstanding anything to the
contrary, the Base Salary may be reduced if the Board approves and implements an
equal percentage reduction in the base salaries of all of the Company’s
executive officers, but in no event will such reduction be greater than 15% of
the Base Salary. A reduction in the Executive’s Base Salary in accordance with
the immediately preceding sentence shall not constitute a substantial reduction
in salary as described at paragraph 5(b)(i)(A) of this Agreement.

 

For the purposes of this Agreement, the “Minimum Financial Milestone Event”
shall mean the sale by the Company of its Equity Securities in a bona fide
equity financing following the Effective Date in which the Company receives
gross proceeds of not less than $5,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. “Equity
Securities” means the Company’s common stock or preferred stock issued to one or
more third parties for bona fide equity financing purposes. The “Second
Financial Milestone Event” shall mean the sale or sales by the Company of its
Equity Securities in a bona fide equity financing (or series of bona fide equity
financings, including the Minimum Financial Milestone Event) following the
Effective Date of this Agreement in which the Company receives aggregate gross
proceeds of at least $30,000,000, including proceeds received in connection with
any transaction in which the Company’s securities (or the securities of any
successor to the Company) become publicly tradeable. For purposes of clarity,
the amount of the Minimum Financial Milestone Event shall be included in
calculating the Second Milestone Event.

 

(b)           Bonuses.

 

(i)          Upon the occurrence of the Minimum Financial Milestone Event (as
defined above) provided that the conditions set forth below have been satisfied,
the Executive shall be paid a one-time lump sum cash bonus in the amount of
$60,000, less applicable withholdings, which shall be paid within 30 days of the
occurrence of the Minimum Financial Milestone Event.

 

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(ii)         Upon the occurrence of the Second Minimum Financial Milestone
Event, provided that the conditions set forth below have been satisfied, the
Executive shall be paid a one-time lump sum cash bonus in the amount of
$175,000, less all applicable withholdings, which shall be paid to the Executive
within 30 days of the occurrence of the Second Minimum Financial Milestone
Event. In the event a Second Minimum Financial Event is the initial fundraising,
the Executive shall be entitled to payment of both bonuses specified under
subparts (i) above this subpart (ii), and both bonuses shall be paid to the
Executive, less applicable withholdings, within 30 days of the occurrence of the
Second Minimum Financial Milestone Event.

 

For the purposes of subparts (i) and (ii) above, the Executive shall only be
paid the bonuses specified therein if: (A) the Executive is employed by the
Company on the effective date of the occurrence of the Minimum Financial
Milestone Event and/or Second Minimum Financial Milestone Event, as appropriate,
or has been terminated without Cause prior to such date. For purposes of
clarity, if the Executive is not employed by the Company upon the applicable
milestone or has been terminated for Cause (as defined herein) prior to the
occurrence of the applicable milestone event, the Executive shall have no right
to the payment of the bonus specified under subpart (i) or subpart (ii) hereof.

 

(iii)         The Executive shall be eligible to participate in all bonus or
similar incentive plans adopted by the Board. The amount awarded, if any, to the
Executive under any bonus or incentive plan shall be in the discretion of the
Board or any committee administering such plan, based on its assessment of the
Executive’s and the Company’s performance during the relevant period. If a Bonus
is awarded, unless otherwise specifically provided by the Board or committee
administering such plan, it shall be paid within 30 days of December 31st in the
year following the year in which the Bonus was awarded.

 

(c)          Equity. Following the completion of the Minimum Financial Milestone
Event, the Executive shall be eligible for an annual grant of restricted stock
(the “Equity Grant”) for each year of service during the Term, which grant shall
be made at the then-current fair market value of such restricted stock on the
date of grant, subject to (i) the Executive’s achievement of the agreed-upon
milestones set forth on Exhibit A in the applicable calendar year, which
milestones may be modified on an annual basis commencing in the year 2016; (ii)
the approval of the grant by the Board; and (iii) the Executive’s continued
employment by the Company until such time as the Equity Grant is made. If an
Equity Grant is made by the Board, it shall be made within 45 days of December
31st of the applicable calendar year. The terms and conditions of the Equity
Grant shall be governed by a Restricted Stock Purchase Agreement in a form
mutually acceptable to the Executive and the Company and shall be governed by
the Company’s 2015 Stock Incentive Plan, which shall be approved and adopted by
the Company before the Equity Grant is made. It is understood that each Equity
Grant shall be subject to a Right of Repurchase in favor of the Company, which
Right of Repurchase shall be subject to the Company’s standard vesting schedule
unless otherwise agreed whereby the Company’s Right of Repurchase shall lapse
with respect to 25% of the restricted stock on the one year anniversary of the
date of grant and with respect to an additional 1/48 each month on the
corresponding day of the month thereafter, until all of the restricted stock has
been released from restrictions on the fourth anniversary of the date of grant,
subject to Executive continuing perform services through each such date. Each
Equity Grant shall provide that the Company’s Right of Repurchase shall lapse
100% upon a Change in Control, as such term is defined in the Restricted Stock
Purchase Agreement.

 

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(d)         Benefits. The Executive shall be entitled to receive those benefits
provided from time to time to other executive employees of the Company, in
accordance with the terms and conditions of the applicable plan documents;
provided that the Executive meets the eligibility requirements thereof. All such
benefits are subject to amendment or termination from time to time by the
Company without the consent of the Executive or any other employee of the
Company.

 

(e)         Paid Time Off. The Executive shall be entitled to four weeks of paid
time off (“PTO”) (prorated for partial calendar years) to be taken at such times
as may be approved by the Board. PTO earned in one calendar year may not be used
in any subsequent calendar year. Upon the termination of the Executive’s
employment with the Company, the Executive shall be paid for any accrued and
used PTO (less standard employment related withholdings and dedcutions).

 

(f)          Business Expenses. The Company shall pay, or reimburse the
Executive for, all reasonable expenses incurred by the Executive directly
related to conduct of the business of the Company; provided that, the Executive
complies with the Company’s policies for the reimbursement or advancement of
business expenses that are now or hereafter in effect.

 

5.            Termination. This Agreement and the Executive’s employment by the
Company shall or may be terminated, as the case may be, as follows:

 

(a)          Termination upon Expiration of the Term. This Agreement and the
Executive’s employment by the Company shall terminate upon the expiration of the
Term in the event notice of non-renewal is provided according to the terms of
Section 3.

 

(b)          Termination by the Executive. The Executive may terminate this
Agreement and his employment by the Company:

 

(i)          for “Good Reason” (as defined herein). For purposes of this
Agreement, “Good Reason” shall mean, the existence, without the consent of the
Executive, of any of the following events: (A) the Executive’s duties and
responsibilities or salary are substantially reduced or diminished; (B) the
Company materially breaches its obligations under this Agreement, including the
failure of the Company to pay the Executive any Base Salary that becomes due and
payable within 30 days after the Employee has given the Company written notice
thereof; or (C) the Executive’s place of employment is relocated by more than 50
miles of Philadelphia, Pennsylvania, without the consent of the Executive. In
addition to any requirements set forth above, in order for any of the above
events to constitute “Good Reason”, the Executive must (X) inform the Company of
the existence of the event within 90 days of the initial existence of the event,
after which date the Company shall have no less than 30 days to cure the event
which otherwise would constitute “Good Reason” hereunder and (Y) the Executive
must terminate employment with the Company for such “Good Reason” no later than
two years after the initial existence of the event which prompted the
Executive’s termination.

 

(ii)         Other than for Good Reason 30 days after notice to the Company.

 

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(c)          Termination by the Company. The Company may terminate this
Agreement and the Executive’s employment by the Company upon notice to the
Executive (or personal representative):

 

(i)          at any time and for any reason;

 

(ii)         upon the death of the Executive, in which case this Agreement shall
terminate immediately; provided that, such termination shall not prejudice any
benefits payable to the Executive’s spouse or beneficiaries which are fully
vested as of the date of death;

 

(iii)        if the Executive is “permanently disabled” (as defined herein), in
which case this Agreement shall terminate immediately; provided that, such
termination shall not prejudice any benefits payable to the Executive, the
Executive’s spouse or beneficiaries which are fully vested as of the date of the
termination of this Agreement. For purposes of this Agreement, the Executive
shall be considered “permanently disabled” when a qualified medical doctor
mutually acceptable to the Company and the Executive or the Executive’s personal
representative shall have certified in writing that: (A) the Executive is
unable, because of a medically determinable physical or mental disability, to
perform substantially all of the Executive’s duties, with or without a
reasonable accommodation, for more than 180 calendar days measured from the last
full day of work; or (B) by reason of mental or physical disability, it is
unlikely that the Executive will be able, within 180 calendar days, to resume
substantially all business duties and responsibilities in which the Executive
was previously engaged and otherwise discharge the Executive’s duties under this
Agreement;

 

(iv)        upon the liquidation, dissolution or discontinuance of business by
the Company in any manner or the filing of any petition by or against the
Company under any federal or state bankruptcy or insolvency laws, which petition
shall not be dismissed within 60 days after filing; provided that, such
termination shall not prejudice the Executive’s rights as a stockholder or a
creditor of the Company; or

 

(v)         "for cause" (as defined herein). “For cause” shall be determined by
the Board by a majority vote without the participation of the Executive in such
vote and shall mean:

 

(A)         Any material breach of the terms of this Agreement by the Executive,
or the failure of the Executive to diligently and properly perform the
Executive’s duties for the Company or the Executive’s failure to achieve the
objectives specified by the Board;

 

(B)         The Executive’s misappropriation or unauthorized use of the
Company’s tangible or intangible property, or breach of the Proprietary
Information Agreement (as defined herein) or any other similar agreement
regarding confidentiality, intellectual property rights, non-competition or
non-solicitation;

 

(C)         Any material failure to comply with the Company Policies or any
other policies and/or directives of the Board;

 

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(D)         The Executive’s use of illegal drugs or any illegal substance, or
the Executive’s use of alcohol in any manner that materially interferes with the
performance of the Executive’s duties under this Agreement;

 

(E)         Any dishonest or illegal action (including, without limitation,
embezzlement) or any other action whether or not dishonest or illegal by the
Executive which is materially detrimental to the interest and well-being of the
Company, including, without limitation, harm to its reputation;

 

(F)         The Executive’s failure to fully disclose any material conflict of
interest that the Executive may have with the Company in a transaction between
the Company and any third party which is materially detrimental to the interest
and well-being of the Company; or

 

(G)         Any adverse action or omission by the Executive which would be
required to be disclosed pursuant to public securities laws or which would limit
the ability of the Company or any entity affiliated with the Company to sell
securities under any Federal or state law or which would disqualify the Company
or any affiliated entity from any exemption otherwise available to it.

 

(d)          Obligations of the Company Upon Termination.

 

(i)           Upon the termination of this Agreement: (A) by the Executive
pursuant to paragraph 5(b)(ii); or (B) by the Company pursuant to paragraph
5(c)(ii), (iii), (iv), or (v), the Company shall have no further obligations
hereunder other than the payment of all compensation and other benefits payable
to the Executive through the date of such termination which shall be paid on or
before the Company’s next regularly scheduled payday unless such amount is not
then-calculable, in which case payment shall be made on the first regularly
scheduled payday after the amount is calculable.

 

(ii)          Upon termination of this Agreement: (A) upon the expiration of the
Term, if the Company does not renew the Term for a reason unrelated to Cause;
(B) by the Executive pursuant to paragraph 5(b)(i); or (C) by the Company
pursuant to paragraph 5(c)(i) and provided that the Executive first executes and
does not revoke a release and settlement agreement in the form acceptable to the
Company within the time period then-specified by the Company but in any event no
later than sixty (60) days after the date of termination (the “Release”): (1)
the Company shall pay the Executive an amount equal to 12 months of Executive’s
then-current Base Salary (less all applicable deductions) payable in
installments in accordance with the then-current generally applicable payroll
schedule of the Company commencing on the first regularly scheduled pay date of
the Company processed after Executive has executed, delivered to the Company and
not revoked the Release; (2) provided that the Company still offers a health
insurance plan, either allow the Executive to continue to participate in the
Company’s health insurance plan at the level in effect immediately prior to
termination (if permitted under the provisions of such plan), or provided that
the Executive properly elects and maintains continued health insurance coverage
under COBRA or its state law equivalent and provided further that such benefits
continue to be offered under the Company sponsored plan, the Company shall
reimburse the Executive in an amount equal to the cost of the premium for such
continued health insurance coverage at the same average level and on the same
terms and conditions which applied immediately prior to the date of the
Executive’s termination for the shorter of (a) 12 months from the date of
termination or (b) until the Executive obtains reasonably comparable coverage.

 

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(e)          Resignation as Officer and Director. Upon termination of this
Agreement and the Executive’s employment hereunder for any reason by either
party, the Executive shall be deemed to have resigned from all offices and
positions the Executive may hold with the Company at such time including without
limitation Board membership and/or positions as an officer of the Company.

 

(f)          Payment in Lieu of Notice Period. Upon the termination of this
Agreement: (A) pursuant to the expiration of the Term based on a non-renewal
notice, if applicable, or (B) by the Executive pursuant to paragraph 5(b)(i) or
5(b)(ii), the Company may, at its sole election, pay the Executive an amount
equal to Executive’s then-current Base Salary for all or any portion of the
applicable notice period required by paragraph 3(b) or paragraph 5(b)(i) or
5(b)(ii) in lieu of all or any portion of such notice period; provided, however,
any such election by the Company shall not be deemed to be a termination by the
Company that invokes the obligations set forth in Section 5(d)(ii) of this
Agreement. Notwithstanding the above, if the Executive requests that Executive’s
final day of employment occur prior to the expiration of any applicable notice
period and the Company consents, pay in lieu of notice shall not be required.

 

6.           Proprietary Information Agreement. The terms of the Proprietary
Information, Inventions, Non-Competition and Non-Solicitation Agreement by and
between the Company and the Executive, entered into simultaneously herewith (the
“Proprietary Information Agreement”) and any other similar agreement regarding
confidentiality, intellectual property rights, non-competition or
non-solicitation between the Company and the Executive, are hereby incorporated
by reference and are a material part of this Agreement.

 

7.           Representations and Warranties.

 

(a)          The Executive represents and warrants to the Company that the
Executive’s performance of this Agreement and as an employee of the Company does
not and will not breach any noncompetition agreement or any agreement to keep in
confidence proprietary information acquired by the Executive in confidence or in
trust prior to the Executive's employment by the Company. The Executive
represents and warrants to the Company that the Executive has not entered into,
and agrees not to enter into, any agreement that conflicts with or violates this
Agreement.

 

(b)          The Executive represents and warrants to the Company that the
Executive has not brought and shall not bring with the Executive to the Company,
or use in the performance of the Executive's responsibilities for the Company,
any materials or documents of a former employer which are not generally
available to the public or which did not belong to the Executive prior to the
Executive’s employment with the Company, unless the Executive has obtained
written authorization from the former employer or other owner for their
possession and use and provided the Company with a copy thereof.

 

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8.            Indemnification.

 

(a)          By the Employee. The Executive shall indemnify and hold harmless
the Company, its directors, officers, stockholders, agents, and employees
against all claims, costs, expenses, liabilities, and lost profits, including
amounts paid in settlement, incurred by any of them as a result of the breach by
the Executive of any provision of Section 2, 6 and/or 7 of this Agreement.

 

(b)          By the Company. The Company will indemnify and hold harmless the
Executive from any labilities and expenses arriving from his actions as an
officer, director or employee of the Company to the fullest extent permitted by
law, excepting any unauthorized acts, intentional or illegal conduct with
breaches the terms of this or any other agreement or Company policy, including
but not limited to the Proprietary Information Agreement.

 

9.            Notices. All notices, requests, consents, approvals, and other
communications to, upon, and between the parties shall be in writing and shall
be deemed to have been given, delivered, made, and received when: (a) personally
delivered; (b) deposited for next day delivery by Federal Express, or other
similar overnight courier services; (c) transmitted via telefacsimile or other
similar device to the attention of the Company President with receipt
acknowledged; or (d) three days after being sent or mailed by certified mail,
postage prepaid and return receipt requested, addressed to the Company at 8601
Six Forks Road, Suite 400, Raleigh, NC 27615, and to the Executive at the
address set forth by the signature page below.

 

10.          Effect. This Agreement shall be binding on and inure to the
respective benefit of the Company and its successors and assigns and the
Executive and his personal representatives.

 

11.          Entire Agreement. This Agreement and the Proprietary Information
Agreement and any other similar agreement regarding confidentiality,
intellectual property rights, non-competition or non-solicitation constitute the
entire agreement between the parties with respect to the matters set forth
herein and supersede all prior agreements and understandings between the parties
with respect to the same.

 

12.          Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision.

 

13.          Amendment and Waiver. No provision of this Agreement, including the
provisions of this Section, may be amended, modified, deleted, or waived in any
manner except by a written agreement executed by the parties.

 

14.          Section 409A Matters. This Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
and the Treasury Regulations and other applicable guidance thereunder (“Section
409A”). To the extent that there is any ambiguity as to whether this Agreement
(or any of its provisions) contravenes one or more requirements of Section 409A,
such provision shall be interpreted and applied in a matter that does not result
in a Section 409A violation. Without limiting the generality of the above:

 

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(a)           For clarity, the severance benefits specified in this Agreement
(the “Severance Benefits”) are only payable upon a “separation from service” as
defined in Section 409A. The Severance Benefits shall be deemed to be series of
separate payments, with each installment being treated as a separate payment.
The time and form of payment of any compensation may not be deferred or
accelerated to the extent it would result in an impermissible acceleration or
deferral under Section 409A.

 

(b)          To the extent this Agreement contains payments which are subject to
Section 409A (as opposed to exempt from Section 409A), the Executive’s rights to
such payments are not subject to anticipation, alienation, sale, transfer,
pledge, encumbrance, attachment or garnishment and, where applicable, may only
be transferred by will or the laws of descent and distribution.

 

(c)          To the extent the Severance Benefits are intended to be exempt from
Section 409A as a result of an “involuntary separation from service” under
Section 409A, if all conditions necessary to establish the Executive’s
entitlement to such Severance Benefits have been satisfied, all Severance
Benefits shall be paid or provided in full no later than December 31st of the
second calendar year following the calendar year in which the Executive’s
employment terminated unless another time period is applicable.

 

(d)          If the Employee is a “specified employee” (as defined in Section
409A) on the termination date and a delayed payment is required by Section 409A
to avoid a prohibited distribution under Section 409A, then no Severance
Benefits that constitute “non-qualified deferred compensation” under Section
409A shall be paid until the earlier of (i) the first day of the 7th month
following the date of Employee’s “separation from service” as defined in Section
409A, or (ii) the date of Employee’s death. Upon the expiration of the
applicable deferral period, all payments deferred under this clause shall be
paid in a lump sum and any remaining severance benefits shall be paid per the
schedule specified in this Agreement.

 

(e)          The Company makes no representation that this Agreement will be
exempt from or compliant with Section 409A and makes no affirmative undertaking
to preclude Section 409A from applying, but does reserve the right to
unilaterally amend this Agreement as may be necessary or advisable to permit the
Agreement to be in documentary and operational compliance with Section 409A
which determination will be made in the sole discretion of the Company.

 

15.          Governing Law. This Agreement will be governed by and construed
according to the laws of the State of North Carolina without regard to conflict
of law principles.

 

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16.          Consent to Jurisdiction and Venue. Each of the parties agrees that
any suit, action, or proceeding arising out of this Agreement may be instituted
against it in the state or federal courts located in Wake County, North
Carolina. Each of the parties hereby waives any objection that it may have to
the venue of any such suit, action, or proceeding, and each of the parties
hereby irrevocably consents to the personal jurisdiction of any such court in
any such suit, action, or proceeding.

 

17.          Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original, and all of which shall
be deemed a single agreement.

 

18.          Headings. The headings herein are for convenience only and shall
not affect the interpretation of this Agreement.

 

[The remainder of this page is intentionally left blank.]

 

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

 

  COMPANY:       Innovate Biopharmaceuticals, InC.         By: /s/ Jay P. Madan
    Jay P. Madan, President         EXECUTIVE:         /s/ Christopher P. Prior,
Ph.D.   Christopher P. Prior, Ph.D.       Address:

 

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EXHIBIT A

 

2016 Milestones for Equity Grant

 

The following pertains to the Equity Grant set forth in Section 4(a) of the
Executive Employment Agreement:

 

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FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Amendment”) is
entered into as of March 15, 2016 (the “Effective Date”) by and between Innovate
Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and
Christopher P. Prior (the “Executive;” and, together with the Company, the
“Parties”), who agree to be bound by all of the terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive and the Company entered into an Executive Employment
Agreement on or about October 28, 2015 (the “Employment Agreement”), setting
forth the terms and conditions of Executive’s employment as the Chief Executive
Officer of the Company;

 

WHEREAS, the Executive and the Company desire to amend the Employment Agreement
at this time as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Executive and the Company hereby amend the
Employment Agreement as follows, effective as of the date hereof:

 

1.            Section 4(a) of the Employment Agreement is hereby amended and
restated in its entirety as follows:

 

“(a)          Base Salary. Upon the occurrence of the Minimum Financial
Milestone Event (as defined below), the Executive shall be paid an annual salary
in the amount of $240,000, which shall be payable in accordance with the
then-current payroll schedule of the Company (the “Base Salary”), less all
applicable taxes and withholdings; provided, however, that the Executive shall
be paid minimum wage in accordance with applicable state law until such time as
the Minimum Financial Milestone Event has occurred. From and after the date of
the Minimum Financial Milestone Event, the Executive shall be entitled to
payment of the Base Salary in accordance with the then-current payroll schedule
of the Company. Upon the occurrence of the Second Financial Milestone Event (as
defined below), the Executive's Base Salary shall be increased to $260,000 which
shall be paid in accordance with the then-current payroll schedule of the
Company commencing on the first regularly scheduled payroll date of the Company
after the Second Minimum Financial Milestone Event has occurred. Upon the
occurrence of the Third Financial Milestone Event (as defined below), the
Executive's Base Salary shall be increased to $300,000, which shall be paid in
accordance with the then-current payroll schedule of the Company commencing on
the first regularly scheduled payroll date of the Company after the Second
Minimum Financial Milestone Event has occurred. The Executive's salary may be
increased from time to time by the Board. Notwithstanding anything to the
contrary, the Base Salary may be reduced if the Board approves and implements an
equal percentage reduction in the base salaries of all of the Company’s
executive officers, but in no event will such reduction be greater than 15% of
the Base Salary. A reduction in the Executive’s Base Salary in accordance with
the immediately preceding sentence shall not constitute a substantial reduction
in salary as described at paragraph 5(b)(i)(A) of this Agreement.

 

   

 

 

For the purposes of this Agreement, the “Minimum Financial Milestone Event”
shall mean the sale by the Company of its Equity Securities in a bona fide
equity financing following the Effective Date in which the Company receives
gross proceeds of not less than $5,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. “Equity
Securities” means the Company’s common stock or preferred stock issued to one or
more third parties for bona fide equity financing purposes. The “Second
Financial Milestone Event” shall mean the sale or sales by the Company of its
Equity Securities following the Effective Date in a bona fide equity financing
(or series of bona fide equity financings, including the Minimum Financial
Milestone Event) in which the Company receives aggregate gross proceeds of at
least $10,000,000, including proceeds received in connection with any
transaction in which the Company’s securities (or the securities of any
successor to the Company) become publicly tradeable. The “Third Financial
Milestone Event” shall mean the sale or sales by the Company of its Equity
Securities following the Effective Date in a bona fide equity financing (or
series of bona fide equity financings, including the Minimum Financial Milestone
Event and the Second Financial Milestone Event) in which the Company receives
aggregate gross proceeds of at least $30,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. For
purposes of clarity, the amount of the Minimum Financial Milestone Event shall
be included in calculating the Second Milestone Event and the amount of the
Minimum Financial Milestone Event and the Second Financial Milestone Event shall
be included in calculating the Third Financial Milestone Event.”

 

2.            Section 4(b) of the Employment Agreement is hereby amended and
restated in its entirety as follows:

 

“(b)         Bonuses.

 

(i)          Upon the occurrence of the Minimum Financial Milestone Event (as
defined above) provided that the conditions set forth below have been satisfied,
the Executive shall be paid a one-time lump sum cash bonus in the amount of
$60,000, less applicable withholdings, which shall be paid within 30 days of the
occurrence of the Minimum Financial Milestone Event.

 

(ii)         Upon the occurrence of the Second Financial Milestone Event,
provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $90,000, less all
applicable withholdings, which shall be paid to the Executive within 30 days of
the occurrence of the Second Financial Milestone Event. In the event a Second
Financial Event is the initial fundraising, the Executive shall be entitled to
payment of both bonuses specified under subpart (i) above, and both bonuses
shall be paid to the Executive, less applicable withholdings, within 30 days of
the occurrence of the Second Financial Milestone Event.

 

   

 

 

(iii)        Upon the occurrence of the Third Financial Milestone Event,
provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $175,000, less all
applicable withholdings, which shall be paid to the Executive within 30 days of
the occurrence of the Third Financial Milestone Event. In the event the Third
Financial Milestone Event is the initial fundraising, the Executive shall be
entitled to a payment of each bonus specified under subpart (i) and (ii) above
this subpart (iii), and all such bonuses shall be paid to the Executive, less
applicable withholdings, within 30 days of the occurrence of the Third Financial
Milestone Event.

 

For the purposes of subparts (i), (ii) and (iii) above, the Executive shall only
be paid the bonuses specified therein if: (A) the Executive is employed by the
Company on the effective date of the occurrence of the Minimum Financial
Milestone Event the Second Financial Milestone Event, and/or the Third Financial
Milestone Event, as appropriate, or has been terminated without Cause prior to
such date. For purposes of clarity, if the Executive is not employed by the
Company upon the applicable milestone or has been terminated for Cause (as
defined herein) prior to the occurrence of the applicable milestone event, the
Executive shall have no right to the payment of the bonus specified under
subparts (i), (ii) or (iii) hereof.”

 

3.           This Amendment is hereby incorporated into and forms a part of the
Employment Agreement.

 

4.           Except as modified herein, all other terms and conditions of the
Employment Agreement shall continue in full force and effect.

 

5.           This Amendment shall be binding upon the Parties hereto and upon
their respective heirs, legal representatives, successors and permitted assigns
and shall be governed by and construed in accordance with the laws of the State
of North Carolina.

 

[The remainder of this page is intentionally left blank.]

 

   

 

 

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

 

  COMPANY:       Innovate Biopharmaceuticals, InC.         By: /s/ Jay P. Madan,
President     Jay P. Madan, President         EXECUTIVE:         By: /s/
Christopher P. Prior     Christopher P. Prior         Address:

 

   

 

 

SECOND AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Second Amendment”)
is entered into as of March 1, 2017, with an effective date of July 1, 2016 (the
“Effective Date”) by and between Innovate Biopharmaceuticals, Inc., a Delaware
corporation (the “Company”), and Christopher P. Prior (the “Executive;” and,
together with the Company, the “Parties”), who agree to be bound by all of the
terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive and the Company entered into an Executive Employment
Agreement on or about October 28, 2015 (the “Employment Agreement”), setting
forth the terms and conditions of Executive’s employment as the Chief Executive
Officer of the Company;

 

WHEREAS, the Executive and the Company entered into a First Amendment to
Executive Employment Agreement on or about March 15, 2016 (the “First
Amendment”); and

 

WHEREAS, the Executive and the Company desire to amend the Employment Agreement,
as amended by the First Amendment, as set forth in this Second Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Executive and the Company hereby amend the
Employment Agreement as follows, effective as of the Effective Date set forth
above:

 

1.            Section 4(a) of the Employment Agreement entitled “Base Salary” is
hereby amended to add the following paragraphs at the end of Section 4(a)
relative to Executive’s Base Salary:

 

“Commencing on July 1, 2016, Executive’s Base Salary shall be increased so that
Executive is paid $36,000 per year ($3,000 per month) (to clarify which will be
$ 18,000 for period of July 1, 2016 to Dec 31, 2016) (the “Salary Increase”),
less all applicable taxes and withholdings. Payment of the Salary Increase shall
continue until such time as the Minimum Financial Milestone Event has occurred.

 

Additionally, in the months of July, August and September 2016, the Executive
shall be paid a discretionary monthly bonus in addition to the Salary Increase
in the amount of $700 per month (to clarify, that the total 2016 Discretionary
Bonus would be $ 2,100) (the “2016 Discretionary Bonus”). The 2016 Discretionary
Bonus shall be paid to the Executive on a monthly basis in each of the months of
July, August and September 2016 in accordance with the Company’s standard
payroll procedure and shall be less all applicable taxes and withholdings. There
shall be no further payment of the 2016 Discretionary Bonus from and after
September 30, 2016.”

 

2.            This Second Amendment is hereby incorporated into and forms a part
of the Employment Agreement.

 

   

 

 

3.            Except as modified herein, all other terms and conditions of the
Employment Agreement as amended by the First Amendment, shall continue in full
force and effect.

 

4.            This Second Amendment shall be binding upon the Parties hereto and
upon their respective heirs, legal representatives, successors and permitted
assigns and shall be governed by and construed in accordance with the laws of
the State of North Carolina.

 

[The remainder of this page is intentionally left blank.]

 

   

 

 

IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the
day and year first above written.

 

  COMPANY:       Innovate Biopharmaceuticals, InC.         By: /s/ Jay P. Madan
    Jay P. Madan, President         EXECUTIVE:         By: /s/ Christopher P.
Prior, Ph.D.     Christopher P. Prior, Ph.D.         Address:

 

   

 

 

THIRD AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS THIRD AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Third Amendment”)
is entered into as of March 1, 2017 (the “Effective Date”) by and between
Innovate Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and
Christopher P. Prior (the “Executive;” and, together with the Company, the
“Parties”), who agree to be bound by all of the terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive and the Company entered into an Executive Employment
Agreement on or about October 28, 2015 (the “Employment Agreement”), setting
forth the terms and conditions of Executive’s employment as the Chief Executive
Officer of the Company;

 

WHEREAS, the Executive and the Company entered into a First Amendment to
Executive Employment Agreement on or about March 15, 2016 (the “First
Amendment”);

 

WHEREAS, the Executive and the Company entered into a Second Amendment to
Executive Employment Agreement simultaneously herewith with an effective date of
July 1, 2016 (the “Second Amendment”); and

 

WHEREAS, the Executive and the Company desire to amend the Employment Agreement,
as amended by the First Amendment and Second Amendment, as set forth in this
Third Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Executive and the Company hereby amend the
Employment Agreement as follows, effective as of the Effective Date set forth
above:

 

1.            Section 4(a) of the Employment Agreement is hereby amended and
restated in its entirety as follows:

 

“(a)          Base Salary. Upon the occurrence of the Minimum Financial
Milestone Event (as defined below), the Executive shall be paid an annual salary
in the amount of $240,000, which shall be payable in accordance with the
then-current payroll schedule of the Company (the “Base Salary”), less all
applicable taxes and withholdings; provided, however, that the Executive shall
be paid minimum wage in accordance with applicable state law until such time as
the Minimum Financial Milestone Event has occurred. From and after the date of
the Minimum Financial Milestone Event, the Executive shall be entitled to
payment of the Base Salary in accordance with the then-current payroll schedule
of the Company. Upon the occurrence of the Second Financial Milestone Event (as
defined below), the Executive's Base Salary shall be increased to $260,000 which
shall be paid in accordance with the then-current payroll schedule of the
Company commencing on the first regularly scheduled payroll date of the Company
after the Second Minimum Financial Milestone Event has occurred. Upon the
occurrence of the Third Financial Milestone Event (as defined below), the
Executive's Base Salary shall be increased to $300,000, which shall be paid in
accordance with the then-current payroll schedule of the Company commencing on
the first regularly scheduled payroll date of the Company after the Third
Minimum Financial Milestone Event has occurred. Upon the occurrence of the
Fourth Financial Milestone Event (as defined below), the Executive's Base Salary
shall be increased to $425,000, which shall be paid in accordance with the
then-current payroll schedule of the Company commencing on the first regularly
scheduled payroll date of the Company after the Fourth Minimum Financial
Milestone Event has occurred. The Executive's salary may be increased from time
to time by the Board. Notwithstanding anything to the contrary, the Base Salary
may be reduced if the Board approves and implements an equal percentage
reduction in the base salaries of all of the Company’s executive officers, but
in no event will such reduction be greater than 15% of the Base Salary. A
reduction in the Executive’s Base Salary in accordance with the immediately
preceding sentence shall not constitute a substantial reduction in salary as
described at paragraph 5(b)(i)(A) of this Agreement.

 

   

 

 

For the purposes of this Agreement, the “Minimum Financial Milestone Event”
shall mean the sale by the Company of its Equity Securities in a bona fide
equity financing following the Effective Date in which the Company receives
gross proceeds of not less than $5,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. “Equity
Securities” means the Company’s common stock or preferred stock issued to one or
more third parties for bona fide equity financing purposes. The “Second
Financial Milestone Event” shall mean the sale or sales by the Company of its
Equity Securities following the Effective Date in a bona fide equity financing
(or series of bona fide equity financings, including the Minimum Financial
Milestone Event) in which the Company receives aggregate gross proceeds of at
least $10,000,000, including proceeds received in connection with any
transaction in which the Company’s securities (or the securities of any
successor to the Company) become publicly tradeable. The “Third Financial
Milestone Event” shall mean the sale or sales by the Company of its Equity
Securities following the Effective Date in a bona fide equity financing (or
series of bona fide equity financings, including the Minimum Financial Milestone
Event and the Second Financial Milestone Event) in which the Company receives
aggregate gross proceeds of at least $30,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. The
“Fourth Financial Milestone Event” shall mean the sale or sales by the Company
of its Equity Securities following the Effective Date in a bona fide equity
financing (or series of bona fide equity financings, including the Minimum
Financial Milestone Event, the Second Financial Milestone Event and the Third
Financial Milestone Event, as applicable) in which the Company receives
aggregate gross proceeds of at least $45,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. For
purposes of clarity, the amount of the Minimum Financial Milestone Event shall
be included in calculating the Second Milestone Event; the amount of the Minimum
Financial Milestone Event and the Second Financial Milestone Event shall be
included in calculating the Third Financial Milestone Event; and the amount of
the Minimum Financial Milestone Event, the Second Financial Milestone Event and
the Third Financial Milestone shall be included in calculating the Fourth
Financial Milestone Event."

 

   

 

 

2.            Section 4(b) of the Employment Agreement is hereby amended and
restated in its entirety as follows:

 

“(b)         Bonuses.

 

(i)          Upon the occurrence of the Minimum Financial Milestone Event (as
defined above) provided that the conditions set forth below have been satisfied,
the Executive shall be paid a one-time lump sum cash bonus in the amount of
$60,000, less applicable withholdings, which shall be paid within 30 days of the
occurrence of the Minimum Financial Milestone Event.

 

(ii)         Upon the occurrence of the Second Financial Milestone Event,
provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $125,000, less all
applicable withholdings, which shall be paid to the Executive within 30 days of
the occurrence of the Second Financial Milestone Event. In the event a Second
Financial Event is the initial fundraising, the Executive shall be entitled to
payment of both bonuses specified under subpart (i) above, and both bonuses
shall be paid to the Executive, less applicable withholdings, within 30 days of
the occurrence of the Second Financial Milestone Event.

 

(iii)        Upon the occurrence of the Third Financial Milestone Event,
provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $175,000, less all
applicable withholdings, which shall be paid to the Executive within 30 days of
the occurrence of the Third Financial Milestone Event. In the event the Third
Financial Milestone Event is the initial fundraising, the Executive shall be
entitled to a payment of each bonus specified under subpart (i) and (ii) above
this subpart (iii), and all such bonuses shall be paid to the Executive, less
applicable withholdings, within 30 days of the occurrence of the Third Financial
Milestone Event.

 

(iv)        Upon the occurrence of the Fourth Financial Milestone Event,
provided that the conditions set forth below have been satisfied, the Executive
shall be paid a one-time lump sum cash bonus in the amount of $175,000, less all
applicable withholdings, which shall be paid to the Executive within 30 days of
the occurrence of the Forth Financial Milestone Event. In the event the Fourth
Financial Milestone Event is the initial fundraising, the Executive shall be
entitled to a payment of each bonus specified under subparts (i), (ii) and (iii)
above, and all such bonuses shall be paid to the Executive, less applicable
withholdings, within 30 days of the occurrence of the Fourth Financial Milestone
Event.

 

   

 

 

For the purposes of the bonuses specified under subparts (i) – (iv) above, the
Executive shall only be entitled to the bonuses specified therein if the
Executive is employed by the Company on the effective date of the occurrence of
the Minimum Financial Milestone Event the Second Financial Milestone Event, the
Third Financial Milestone Event and/or the Fourth Financial Milestone Event, as
appropriate. For purposes of clarity, unless the Executive is employed by the
Company on the date of such milestone event, the Executive shall have no right
to the payment of the bonus specified under subparts (i), (ii), (iii) or (iv)
hereof.”

 

3.           This Third Amendment is hereby incorporated into and forms a part
of the Employment Agreement.

 

4.           Except as modified herein, all other terms and conditions of the
Employment Agreement shall continue in full force and effect.

 

5.           This Third Amendment shall be binding upon the Parties hereto and
upon their respective heirs, legal representatives, successors and permitted
assigns and shall be governed by and construed in accordance with the laws of
the State of North Carolina.

 

[The remainder of this page is intentionally left blank]

 

   

 

 

IN WITNESS WHEREOF, the parties have executed this Third Amendment as of the day
and year first above written.

 

  COMPANY:       Innovate Biopharmaceuticals, InC.         By: /s/ Jay P. Madan
    Jay P. Madan, President         EXECUTIVE:         By: /s/ Christopher P.
Prior, Ph.D.     Christopher P. Prior, Ph.D.         Address:

 

   

 

 

FOURTH AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS FOURTH AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (the “Fourth Amendment”)
is entered into as of August 31, 2017, with an effective date of July 1, 2016
(the “Effective Date”) by and between Innovate Biopharmaceuticals, Inc., a
Delaware corporation (the “Company”), and Christopher P. Prior (the “Executive;”
and, together with the Company, the “Parties”), who agree to be bound by all of
the terms and conditions hereof.

 

WITNESSETH:

 

WHEREAS, the Executive and the Company entered into an Executive Employment
Agreement on or about October 28, 2015 (the “Employment Agreement”), setting
forth the terms and conditions of Executive’s employment as the Chief Executive
Officer of the Company;

 

WHEREAS, the Executive and the Company entered into a First Amendment to
Executive Employment Agreement on or about March 15, 2016 (the “First
Amendment”);

 

WHEREAS, the Executive and the Company entered into a Second Amendment to
Executive Employment Agreement on or about March 1, 2017 (the “Second
Amendment”);

 

WHEREAS, the Executive and the Company entered into a Third Amendment to
Executive Employment Agreement on or about March 1, 2017 (the “Third
Amendment”); and

 

WHEREAS, the Executive and the Company desire to amend the Employment Agreement,
as amended, as set forth in this Fourth Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Executive and the Company hereby amend the
Employment Agreement as follows, effective as of the Effective Date set forth
above:

 

1.            The second paragraph of Section 4(a)(i) of the Employment
Agreement is hereby amended and restated in its entirety as follows:

 

   

 

 

“For the purposes of this Agreement, the “Minimum Financial Milestone Event”
shall mean the sale by the Company of its Equity Securities in a bona fide
equity financing following the Effective Date in which the Company receives
gross proceeds of not less than $5,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. “Equity
Securities” means the Company’s common stock or preferred stock, or any other
securities convertible into the Company’s common stock or preferred stock (e.g.,
convertible promissory notes), issued to one or more third parties for bona fide
equity financing purposes. The “Second Financial Milestone Event” shall mean the
sale or sales by the Company of its Equity Securities following the Effective
Date in a bona fide equity financing (or series of bona fide equity financings,
including the Minimum Financial Milestone Event) in which the Company receives
aggregate gross proceeds of at least $10,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. The
Second Financial Milestone Event will also include any proceeds received from
sale of assets, out-licensing and/or partnering agreements. The “Third Financial
Milestone Event” shall mean the sale or sales by the Company of its Equity
Securities following the Effective Date in a bona fide equity financing (or
series of bona fide equity financings, including the Minimum Financial Milestone
Event and the Second Financial Milestone Event) in which the Company receives
aggregate gross proceeds of at least $25,000,000, including proceeds received in
connection with any transaction in which the Company’s securities (or the
securities of any successor to the Company) become publicly tradeable. The Third
Financial Milestone Event will also include any proceeds received from sale of
assets, out-licensing and/or partnering agreements. The “Fourth Financial
Milestone Event” shall mean the sale or sales by the Company of its Equity
Securities following the Effective Date in a bona fide equity financing (or
series of bona fide equity financings, including the Minimum Financial Milestone
Event, the Second Financial Milestone Event and the Third Financial Milestone
Event, as applicable) in which the Company receives aggregate gross proceeds of
at least $45,000,000, including proceeds received in connection with any
transaction in which the Company’s securities (or the securities of any
successor to the Company) become publicly tradeable. The Fourth Financial
Milestone Event will also include any proceeds received from sale of assets,
out-licensing and/or partnering agreements. For purposes of clarity, the amount
of the Minimum Financial Milestone Event shall be included in calculating the
Second Financial Milestone Event; the amount of the Minimum Financial Milestone
Event and the Second Financial Milestone Event shall be included in calculating
the Third Financial Milestone Event; and the amount of the Minimum Financial
Milestone Event, the Second Financial Milestone Event and the Third Financial
Milestone shall be included in calculating the Fourth Financial Milestone
Event."

 

2.            This Fourth Amendment is hereby incorporated into and forms a part
of the Employment Agreement.

 

3.            Except as modified herein, all other terms and conditions of the
Employment Agreement, as amended, shall continue in full force and effect.

 

4.            This Fourth Amendment shall be binding upon the Parties hereto and
upon their respective heirs, legal representatives, successors and permitted
assigns and shall be governed by and construed in accordance with the laws of
the State of North Carolina.

 

[The remainder of this page is intentionally left blank.]

 

   

 

 

IN WITNESS WHEREOF, the parties have executed this Fourth Amendment as of the
day and year first above written.

 

  COMPANY:       Innovate Biopharmaceuticals, InC.         By: /s/ Jay P. Madan
    Jay P. Madan, President         EXECUTIVE:         By: /s/ Christopher P.
Prior, Ph.D.     Christopher P. Prior, Ph.D.         Address: